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Accelerated
depreciation
A
method of depreciation used for accounting
or income tax purposes that allows greater
deductions in the earlier years of the ownership
of a property.
Acceleration
Clause
A provision in a legal agreement / contract
stating that the entire outstanding balance
of a loan becomes payable immediately if a
certain event transpires (e.g., missing a
payment.)
Acceptance
An offeree's agrees to enter into a contract
and be bound by the terms of the offer.
Acre
A unit of land measure equaling 43,560 square
feet or a tract about 4,840 square yards.
For visuality purposes, an acre can be compared
to the size of a football field - not counting
the two end zones. One square mile is equal
to 640 acres.
Addendum
Something added or attached
to a contract. It is sometimes called a rider.
More than one are called addenda.
Additional
Principal Payment
A borrower's payment of more than the scheduled
principal amount due in order to reduce the
remaining balance on a loan.
Adjustable-Rate
Mortgage (ARM)
A mortgage loan that bears
interest at a rate that is subject to change
and therefore adjustable during the term of
the loan. Interest rates may move up or down
as conditions in the market changes. Most
ARMs have caps on how much the interest rate
may increase.
Adjusted Basis
The original cost of a property that reflects
any deductions taken on or improvements to
the asset or security, used to compute the
gain or loss when sold.
Adjustment
Date
After an initial period where an ARM’s
interest rate remains the same, the rate changes
on the adjustment date to reflect the current
market rate. It will continue to adjust either
monthly, semi-annually or annually over the
life of the loan. For example, the first adjustment
date for a 10/1 ARM is after 10 years.
Adjustment
Interval
How often the loan's rate can be changed.
Adjustment Period
The period that elapses between the adjustment
dates for an adjustable-rate mortgage (ARM).
Administrator
A person appointed by a probate court to administer
the estate of a person who has died.
Affordability Analysis
A thorough examination of an individual's
ability to afford a house, taking into consideration
income, assets, liabilities, available funds,
mortgage type, home price, the area where
you want to purchase a home, and the expected
closing costs.
Affordable
housing
A
term applied to the efforts of the public
and private sector to help low and moderate
income people purchase homes through programs
that offer lower down payments, loan with
more lenient qualifying rules, and interest
below market interest rates.
Amenity
A feature of real property that enhances its
attractiveness and increases the occupant's
or user's satisfaction although the feature
is not essential to the property's use. Natural
amenities include a pleasant or desirable
location near water, scenic views of the surrounding
area, etc. (e.g., swimming pools, tennis courts,
boat docks, club houses, community buildings,
and other recreational facilities).
Amortization
The gradual repayment of a mortgage loan by
installments over a specified period of time
which must be sufficient to cover both the
principal and the interest.
Amortization
Schedule
A table showing the periodic principal and
interest payments and the remaining balance
after each payment is made for the life of
a loan.
Amortization
Term
The amount of time required to amortize the
mortgage loan. The amortization term is expressed
as a number of months. For example, for a
30-year fixed-rate mortgage, the amortization
term is 360 months.
Amortize
To reduce debt by by making payments against
the principal balance in installments or regular
payments.
Amortized
Loan
A mortgage
where the principal and interest amounts are
repaid according to a plan through a series
of equal payments in monthly or other periodic
installments without any special balloon payment
prior to maturity. Also known as a
Level payment loan.
Annual
Mortgage Statement
A report sent to the the borrower of a mortgage
loan each year. The report shows how much
was paid in taxes and interest during the
year, as well as the remaining mortgage loan
balance at the end of the year.
Annual Percentage
Rate (APR)
The cost of a mortgage stated as a yearly
rate; includes such items as interest, mortgage
insurance, and loan origination fee (points).
The APR interest rate is different from the
note rate. It is commonly used to compare
loan programs from different lenders. The
Federal Truth in Lending law requires mortgage
companies to disclose the APR when they advertise
a rate. Typically the APR is found next to
the rate.
Annuity
An amount paid yearly or at other regular
intervals, at equal or nearly equal payments
such as the installment rent payments due
to a landlord under a lease or the installment
payments due to a lender over a period of
time or paid at times in a lump sum future
payment.
Application
The lender's form filled out by the potential
borrower of funds. Lenders use the information
to evaluate if they can grant the loan and
if so, how much they can lend.
Appraisal
A written report prepared by a qualified appraiser
estimating the value of a property. Appraisals
are performed for lenders more so than buyers.
The purpose is to justify the sales price
so that the lender feels they are making a
solid investment since the property is collateral
for the loan. In an appraisal, importance
is given to recent home sales in proximity
to the appraised home such as properties on
that street and in the neighborhood.
Appraised Value
An educated opinion of a property's fair market
value, which is based on the appraiser's analysis
of the property, knowledge and experience.
Appraiser
A person qualified by education, training,
and experience to estimate the value of real
property and personal property.
Appreciation
An increase in the value of a property due
to changes in market conditions or other causes.
The opposite of depreciation.
Arbor
A walk-through garden structure that supports
flowers and plants. It generally complements
a home's landscaping.
ARM
See Adjustable Rate Mortgage.
Assessed Value
The valuation placed on property by a public
tax assessor for purposes of taxation.
Assessment
The process of placing a value on property
for the strict purpose of taxation. May also
refer to a levy against property for a special
purpose, such as a sewer assessment.
Assessment Rolls
The public record of taxable property. Also
called Tax Roll.
Assessor
A public official who establishes the value
of a property for taxation purposes.
Asset
Anything of monetary value that is owned by
a person and has a value. Assets include real
property, personal property, and enforceable
claims against others (including bank accounts,
stocks, mutual funds, etc...).
Assignment
The transfer of a mortgage from one person
to another.
Assumable Mortgage
A mortgage that can be taken over ("assumed")
by the buyer when a home is sold.
Assumption
The transfer of the seller's existing mortgage
to the buyer. See assumable mortgage.
Assumption Clause
A provision in an assumable mortgage that
allows a buyer to assume responsibility for
the mortgage from the seller. The loan does
not need to be paid in full by the original
borrower upon sale or transfer of the property.
Assumption Fee
The fee paid to a lender (usually by the purchaser
of real property) resulting from the assumption
of an existing mortgage.
Attest
The
official act of establishing authenticity
or to affirm that a statement or document
is true, genuine or accurate.
Attorney-In-Fact
One who has been authorized by a principal
under a power of attorney (a written instrument)
to perform a acts or to execute documents
on behalf of the grantor of the power.
Auction
A
public sale of property to the highest bidder.
Auction
with reserve
An offer by a seller to sell property but
holds the right to establish a minimum opening
bid or to accept or reject bids.
Audit
An inspection of the books, records and procedures
used by a business or individual. Inspection
is done by a CPA or other qualified person.
The
definitions of Real Estate Definitions found
on 10Realty.com are for general information
only. All information is subject to change
and should be independently verified. 10Realty.com
makes no representations or warranties of
any nature with regard to the information
found on the pages therein. 10Realty.com assumes
no responsibility for any liabilities or losses
claimed or incurred as a result of using this
information. (Real Estate Terms, Investment
Terms, Banking Terms explained, definitions,
legal definitions, legal terms and definitions)
