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# A B C D E F G
H I J K L M N O P Q
R S T U V W X Y Z
401(k)/403(b)
An employer-sponsored investment plan that allows individuals to set aside
tax-deferred income for retirement or emergency purposes. 401(k) plans are
provided by employers that are private corporations. 403(b) plans are provided
by employers that are not for profit organizations. Often times, you can
use these funds towards the down payment of your home.
Acceleration clause
A provision in a mortgage that gives the lender the right to demand payment of
the entire principal balance if a monthly payment is missed.
Acceptance
An offeree’s consent to enter into a contract and be bound by the terms of the
offer.
Additional principal payment
A payment by a borrower of more than the scheduled principal amount due in order
to reduce the remaining balance on the loan.
Adjustable-rate mortgage (ARM)
A mortgage that changes interest rate periodically based upon the changes in a
specified index.
Adjusted basis
The original cost of a property plus the value of any capital expenditures for
improvements to the property minus any depreciation taken.
Administrator
A person appointed by a probate court to administer the estate of a person who
died in testate.
Agent
An individual who represents a
seller, a buyer or both in the purchase or sale of real estate.
Amortization schedule
A timetable for payment of a mortgage loan. An amortization schedule shows the
amount of each payment applied to interest and principal and shows the remaining
balance after each payment is made.
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 repay a mortgage with regular payments that cover both principal and
interest.
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).
Application
A form, commonly referred to as a 1003 form, used to apply for a mortgage and to
provide information regarding a prospective mortgagor and the proposed security.
Appraised value
An opinion of a property's fair market value, based on an appraiser's knowledge,
experience, and analysis of the property.
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.
Assessed value
The valuation placed on property by a public tax assessor for purposes of
taxation, and not necessarily the same as appraised value.
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.
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. Assets include real
property, personal property, and enforceable claims against others (including
bank accounts, stocks, mutual funds, and so on).
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.
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.
Attorney-in-fact
One who holds a power of attorney from another to execute documents on behalf of
the grantor of the power.
balance sheet
A financial statement that shows assets, liabilities, and net worth as of a
specific date.
balloon mortgage
A mortgage that has level monthly payments that will amortize it over a stated
term but that provides for a lump sum payment to be due at the end of an earlier
specified term.
balloon payment
The final lump sum payment that is made at the maturity date of a balloon
mortgage.
bankrupt
A person, firm, or corporation that, through a court proceeding, is relieved
from the payment of all debts after the surrender of all assets to a
court-appointed trustee.
bankruptcy
A proceeding in a federal court in which a debtor who owes more than his or her
assets can relieve the debts by transferring his or her assets to a trustee.
before-tax income
Income before taxes are deducted.
beneficiary
The person designated to receive the income from a trust, estate, or a deed of
trust.
bequeath
To transfer personal property through a will.
binder
A preliminary agreement, secured by the payment of an earnest money deposit,
under which a buyer offers to purchase real estate.
biweekly payment mortgage
A mortgage that requires payments to reduce the debt every two weeks (instead of
the standard monthly payment schedule). The 26 (or possibly 27) biweekly
payments are each equal to one-half of the monthly payment that would be
required if the loan were a standard 30-year fixed-rate mortgage, and they are
usually drafted from the borrower's bank account. The result for the borrower is
a substantial savings in interest.
blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the share
loans on individual units within the project.
bona fide
In good faith, without fraud.
bond
An interest-bearing certificate of debt with a maturity date. An obligation of a
government or business corporation. A real estate bond is a written obligation
usually secured by a mortgage or a deed of trust.
breach
A violation of any legal obligation.
bridge loan
A form of second trust that is collateralized by the borrower's present home
(which is usually for sale) in a manner that allows the proceeds to be used for
closing on a new house before the present home is sold. Also known as
"swing loan."
broker
A person who, for a commission or a fee, brings parties together and assists in
negotiating contracts between them.
building code
Local regulations that control design, construction, and materials used in
construction. Building codes are based on safety and health standards.
buydown mortgage
A temporary buydown is a mortgage on which an initial lump sum payment is made
by any party to reduce a borrower's monthly payments during the first few years
of a mortgage. A permanent buydown reduces the interest rate over the entire
life of a mortgage.
Buyer's Agent
A Real Estate Agent that has made an agreement to represent the
buyer exclusively, rather than the seller.
# A B C D E F G
H I J K L M N O P Q
R S T U V W X Y Z
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