Abstract (of Title) - A summary of the public records relating to the title to a particular piece of land. If there are any title defects they must be cleared before a buyer can purchase clear, marketable, and insurable title.

Acceleration Clause - Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire balance of the loan should you default on you loan. 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.

Accrued Interest - Interest that has accumulated from one payment-due date to the next. Also, the total amount of interest paid on a loan over time

Acquisition Fee - A fee charged by a dealer to begin a lease. Also known as a bank fee if the lessor is a bank, or an initiation fee. Acquisition fees start at about $300 and are seldom negotiable.

Adjustable Rate Mortgage (ARM) - A mortgage in which the interest rate is adjusted periodically based on an index. Also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage. All ARMs are tied to indexes.

Adjustment Interval - On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, usually one, three or five years. The date the interest rate changes on an adjustable-rate mortgage.

Affiliate - An entity related to a Seller that is subject to common operating control and that is operated as part of the same system or enterprise. The Seller typically owns less than a majority of the voting stock or the Seller and the entity are subsidiaries of a third party.

Affordable Gold 5 - Mortgage with less than or equal to 95 percent LTV, when at least 5 percent of the down payment comes from the borrower's personal cash.

Affordable Gold 97 - Mortgage with greater than 95 percent loan-to-value (LTV) ratio but less than or equal to 97 percent LTV, when at least 3 percent of the down payment comes from the borrower's personal cash.

Affordable Product Type - Choice of loan determined under the Affordable Gold program. Indicates whether to submit the loan under the Affordable Gold program and, if so, which type of program.

Affordable Seconds - Subsidized secondary financing or other financial assistance provided under an established, documented secondary financing or financial assistance program that has formal procedures in place to provide applicant qualification, loan processing, and loan program administration on an ongoing basis.

Agreement of Sale - Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms spelled out in writing and signed by both parties.

Amortization - The gradual reduction of a debt by periodic payments of interest and principal that are large enough to pay off a loan at maturity. 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.

Amortization Schedule - 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.

Amount Financed - The part of a homes cost that a lender finances towards the purchase.

Annual Fee - A credit card issuer may charge you a fee each year for your account.

Annual Percentage Rate (APR) - The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage of the loan amount. Unlike an interest rate, however, it includes other charges or fees to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR in large, bold print. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the cost of loans. The APR is always higher than the actual not rate on your loan.

Application - The form used to apply for a mortgage loan, containing information about a borrower's income, savings, assets, debts, and more. This is usally a free process done by a Loan officer.

Appraisal - A written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming.

Appraisal Fee - The charge for estimating the value of property.

Appraised Value - 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.

Appraiser Network - Group of licensed/certified individuals or entities contracted to perform property value assessments.

Appreciation - The increase in the value of a property due to changes in market conditions, inflation, or other causes.

Assessment Fees - In condominium living, additional fees charged to unit owners to pay for any maintenance and repair that exceeds the budget of monthly condo fees. These fees are determined by the condominium association and can be levied at any time.

Assessment Report - Report that appraisers use to record property values, marketability analyses and any pertinent comments regarding the subject property. Assessment reports are classified as appraisal reports or inspection reports.

Assessment Upgrade - Approved recommendation from an appraiser that you must use a more comprehensive type of assessment. An example of an upgrade recommendation includes any adverse/atypical findings or other atypical property or neighborhood condition observed by the appraiser. You must also upgrade an assessment when its value does not support the loan transaction; the appraiser is unable to view the subject property from the public street; the assessment is 'subject to' completion; or repair or property rights are leasehold.

Assessor - A public official who establishes the value of a property for taxation purposes.

Asset - Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). A lender is very interested in the amount and value of any assets you may have because assets can be used as collateral against a loan. Along with other factors such a borrower's credit rating, assets are also used to help determine the amount of the loan.

Assignment - When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

Assumable Mortgage - An assumable mortgage is a mortgage that allows you to take over a mortgage on a home you are buying or allows a buyer to take over your mortgage if you are selling your house. The advantage of this is that you assume a mortgage that has a lower interest rate than current rates, and you avoid high closing costs.

Assumption - The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt.

Automated Underwriting - Automated underwriting is used to offer instant decisioning regarding your loan request. Automated underwriting is similar to instant offer service. You are usually required to provide additional information to the lender to close your loan.