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.
An offerees consent to enter into a contract and be bound by the
terms of the offer.
A payment by a borrower of more than the scheduled principal amount due
in order to reduce the remaining balance on the loan.
A mortgage that permits the lender to adjust its interest rate periodically
on the basis of changes in a specified index. When mortgage interest rates are high, adjustable mortgage loans become very popular as a mean of keeping a mortgage payment low. Adjustable mortgage loans can start with a discounted rate as low as 1%. Generally these loans are base upon a common index such as the Treasury bill (1Yr, 3 Yr, 5 Yr ) or the 11th District Cost of Funds (California / West Coast). Then the loan will have a "margin" which is the bankers margin over the cost of funds. An adjustable rate mortgage margin can range from 2% to 4 or 5% in many cases. The average margin for an adjustable mortgage loan based on the T-bill is 2.75. It is 2.25 for the 11 th district cost of funds. When you add the index to the margin you will be able to calculate the true cost of an adjustable rate mortgage. They true cost will be accruing against the account after the introductory rate expires, even if the payment only adjusts 1-2% (as per the yearly or 6 month caps). The adjustable rate mortgage ceiling is generally 6% above the fully indexed rate (index plus margin plus 6 - which can be surprisingly higher than might be expected.
The original cost of a property plus the value
of any capital expenditures for improvements to the property
minus any depreciation taken.
The date on which the interest rate changes
for an adjustable-rate mortgage (ARM).
The period that elapses between the adjustment
dates for an adjustable-rate mortgage (ARM).
A person appointed by a probate court to administer
the estate of a person who died intestate.
A detailed analysis of your ability to afford
the purchase of a home. An affordability analysis takes
into consideration your income, liabilities, and available
funds, along with the type of mortgage you plan to use,
the area where you want to purchase a home, and the closing
costs that you might expect to pay.
A feature of real property that enhances its
attractiveness and increases the occupants or users
satisfaction although the feature is not essential to
the propertys use. Natural amenities include a
pleasant or desirable location near water, scenic views
of the surrounding area, etc. Human-made amenities include
swimming pools, tennis courts, community buildings, and
other recreational facilities.
The gradual repayment of a mortgage loan by installments.
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.
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.
To repay a mortgage with regular payments that
cover both principal and interest.
A report sent to the mortgagor 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.
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).
An amount paid yearly or at other regular intervals, often on a guaranteed
A form used to apply for a mortgage loan and to record pertinent information
concerning a prospective mortgagor and the proposed security.
A written analysis of the estimated value of a property prepared by a
qualified appraiser. Contrast with home inspection.
An opinion of a property's fair market value, based
on an appraiser's knowledge, experience, and analysis
of the property.
A person qualified by education, training, and experience
to estimate the value of real property and personal property.
An increase in the value of a property due to changes
in market conditions or other causes. The opposite of
The valuation placed on property by a public tax
assessor for purposes of taxation.
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
The public record of taxable property.
A public official who establishes the value of a
property for taxation purposes.
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).
The transfer of a mortgage from one person to another.
A mortgage that can be taken over ("assumed")
by the buyer when a home is sold.
The transfer of the sellers existing
mortgage to the buyer. See assumable mortgage.
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 fee paid to a lender (usually by the purchaser of real property)
resulting from the assumption of an existing mortgage.
One who holds a power of attorney from another to execute documents on
behalf of the grantor of the power.