| Term |
Definition |
| 1 year
adjustable (ARM) |
A loan with a
fixed rate for the first 1 year that has a rate that changes
once each year for the remaining life of the loan. Because
the interest rate can change after the first 1 year, the
monthly payment may also change. |
| 10 year
adjustable (ARM) |
A loan with a
fixed rate for the first 10 years that has a rate that
changes once each year for the remaining life of the loan.
Because the interest rate can change after the first 10
years, the monthly payment may also change. |
| 2 year
adjustable (ARM) |
A loan with a
fixed rate for the first 2 years that has a rate that
changes once each year for the remaining life of the loan.
Because the interest rate can change after the first 2
years, the monthly payment may also change. |
| 3 year
adjustable (ARM) |
A loan with a
fixed rate for the first 3 years that has a rate that
changes once each year for the remaining life of the loan.
Because the interest rate can change after the first 3
years, the monthly payment may also change. |
| 5 year
adjustable (ARM) |
A loan with a
fixed rate for the first 5 years that has a rate that
changes once each year for the remaining life of the loan.
Because the interest rate can change after the first 5
years, the monthly payment may also change. |
| 7 year
adjustable (ARM) |
A loan with a
fixed rate for the first 7 years that has a rate that
changes once each year for the remaining life of the loan.
Because the interest rate can change after the first 7
years, the monthly payment may also change. |
| 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. |
|
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.
|
|
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. |
| 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 downpayment 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 downpayment 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. The loan is repaid through regular, monthly
payments of principal and interest paid for a predetermined
amount of time. |
| 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.
|
| 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. An appraisal of an auto is usually not
necessary because auto dealers, sellers and buyers all have
quick access to the market value of autos. |
| Appraisal
Fee |
The charge
for estimating the value of property. |
| Appraiser
network |
Group of
licensed/certified individuals or entities contracted to
perform property value assessments. |
|
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. |
| 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 a borrower's credit rating, assets are also
used to help determine the amount of the loan. |
| 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. |
