Real Estate Terms
on a link below for an alphabetized list of Real Estate
and Mortgage Terms.
A clause in your mortgage which allows the lender to
demand payment of the outstanding loan balance for various
reasons. The most common reasons for accelerating a
loan are if the borrower defaults on the loan or transfers
title to another individual without informing the lender.
Adjustable-rate mortgage (ARM)
A mortgage in which the interest changes periodically,
according to corresponding fluctuations in an index.
All ARMs are tied to indexes.
The date the interest rate changes on an adjustable-rate
The loan payment consists of a portion which will be
applied to pay the accruing interest on a loan, with
the remainder being applied to the principal. Over time,
the interest portion decreases as the loan balance decreases,
and the amount applied to principal increases so that
the loan is paid off (amortized) in the specified time.
A table which shows how much of each payment will be
applied toward principal and how much toward interest
over the life of the loan. It also shows the gradual
decrease of the loan balance until it reaches zero.
Annual percentage rate (APR)
This is not the note rate on your loan. It is a value
created according to a government formula intended to
reflect the true annual cost of borrowing, expressed
as a percentage. It works sort of like this, but not
exactly, so only use this as a guideline: deduct the
closing costs from your loan amount, then using your
actual loan payment, calculate what the interest rate
would be on this amount instead of your actual loan
amount. You will come up with a number close to the
APR. Because you are using the same payment on a smaller
amount, the APR is always higher than the actual not
rate on your loan.
The form used to apply for a mortgage loan, containing
information about a borrower’s income, savings,
assets, debts, and more.
A written justification of the price paid for a property,
primarily based on an analysis of comparable sales of
similar homes nearby.
An opinion of a property's fair market value, based
on an appraiser's knowledge, experience, and analysis
of the property. Since an appraisal is based primarily
on comparable sales, and the most recent sale is the
one on the property in question, the appraisal usually
comes out at the purchase price.
An individual qualified by education, training, and
experience to estimate the value of real property and
personal property. Although some appraisers work directly
for mortgage lenders, most are independent.
The increase in the value of a property due to changes
in market conditions, inflation, or other causes.
The valuation placed on property by a public tax assessor
for purposes of taxation.
The placing of a value on property for the purpose of
A public official who establishes the value of a property
for taxation purposes.
Items of value owned by an individual. Assets that can
be quickly converted into cash are considered "liquid
assets." These include bank accounts, stocks, bonds,
mutual funds, and so on. Other assets include real estate,
personal property, and debts owed to an individual by
When ownership of your mortgage is transferred from
one company or individual to another, it is called an
A mortgage that can be assumed by the buyer when a home
is sold. Usually, the borrower must "qualify"
in order to assume the loan.
The term applied when a buyer assumes the seller’s