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Terminology: A

August 24, 2017 - 6:41 AM EST

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Terminology: A

Absolute Net
Lease that requires the tenant to pay all costs associated with the operation, repair and maintenance of the building. This includes the actual rent, real estate taxes, repair and maintenance, and utilities. Absolute Net is also referred to as net-net-net (NNN) or triple net.
Abstract of title
A condensed history or summary of all transactions affecting a particular parcel of real estate, including the original grant, all conveyances and encumbrances affecting the property, and the abstractor's certification of the history's accuracy.
Acceleration clause
A clause in a mortgage that gives the lender the right to require payment of the entire principal balance if the borrower defaults on an installment payment or other covenant.
Acceptance
An offeree's consent to enter into, and be bound by the terms of, a contract.
Access
The right to enter and exit a parcel of land from a public way, including the right to enter and exit via land belonging to others.
Acknowledgment
The confirmation by which a party executing a legal document confirms his signature and voluntary agreement with the terms of the document, made before an authorized officer of the Court or notary public.
Acre
43,560 square feet of land.
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 with interest rates that may fluctuate based on market conditions; the lender is permitted to adjust the mortgage's interest rate periodically, though most ARM's are limited in the amount that the interest rates can vary.
Adjusted Basis
The total of the original cost of a property and the value of any capital expenditures for improvements done to it, minus any depreciation taken.
Adjustment Date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
Adjustment Period
The period of time between the adjustment dates for an adjustable-rate mortgage (ARM).
Administrator
A person appointed by a probate court to administer the estate of an individual who has died without a will.
Adverse Possession
A claim made against the land titled to another person, by virtue of open and hostile possession and use of the land to the exclusion of the titled owner.
Affidavit of Title
A sworn statement that is made in writing under oath by a seller of real property, and certified by a notary public, in which the seller identifies himself or herself, indicates marital status, certifies that no defects have occurred in the title since the examination of the title on the date of the contract, and confirms that he or she is in possession of the property (if applicable).
Affordability Analysis
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.
Agency
The relationship between two or more persons wherein the agent is authorized to act on behalf of another person (or principal) in certain transactions.
Agent
A person or company that acts on behalf of another to transact business, generally in exchange for payment. In real estate, it is a person or company with a real estate license working under the authority of a real estate broker.
Alienation
The act of transferring property to another, either voluntarily (via a sale), or involuntarily (via adverse possession).
Alienation clause
The clause in a mortgage or deed of trust which asserts the lender's option to require that the balance of the secured debt becomes immediately due and payable if the property is sold by the borrower, preventing the borrower from assigning the debt without the lender's approval.
ALTA
American Land Title Association, the national association of title insurance companies, abstractors and attorneys specializing in real property law, headquartered in Washington, D.C.
Amenity
A natural or manmade feature of real property that enhances its value and attractiveness, though it is not essential to the property's use.
Amortization
The process of payment of a debt or mortgage loan over time by installments.
Amortization Schedule
A timetable for repayment of a debt or mortgage loan, showing the amount of each payment, what portion is applied to interest and principal, and the remaining balance.
Amortization Term
The amount of time required to repay the mortgage loan, expressed in number of months.
Amortize
To pay off a loan or mortgage with periodic payments that cover both principal and interest.
Amortized Loan
A loan in which both the principal and interest are payable in monthly or other periodic installments over the term of the loan, with no balloon payment prior to maturity.
Annual Mortgagor Statement
An annual report sent to the borrower (mortgagor) each year, showing the amount paid in taxes and interest during the year, as well as the remaining mortgage loan balance.
Annual Percentage Rate (APR)
The overall cost of a mortgage, including interest, mortgage insurance, and loan origination fee (points), stated as a yearly percentage, thus allowing buyers to compare different types of mortgages based on the associated annual finance charges; the APR must be disclosed to borrowers by lenders, per the Truth-in-Lending Act.
Annuity
The return, including interest, from an investment of capital, paid in a series of regular payments.
Appraisal
A written estimate of the value of an asset or property prepared by a qualified, independent party, through which the asset or property value is determined.
Appraised Value
The estimate of a property's fair market value, based on an appraiser's analysis of the property.
Appraiser
An individual educated to estimate the value of real property and personal property.
Appreciation
An increase in the worth of a property due to changes in economic conditions or other causes; the opposite of depreciation.
Appurtenance
Anything attached to, or used with, a parcel of land that will go to the new owner on conveyance of the land.
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ARM
Adjustable-rate Mortgage. Also see "Variable Rate Mortgage".
Assessment
A tax, charge or levy against a property made by the government, based on its value, and levied for a specific purpose, such as to finance sidewalks, a sewer, etc.
Assessment Rolls
The public record of taxable property.
Assessor
A public official who evaluates the value of a property for taxation purposes.
Asset
Anything of monetary value owned by an individual, including real property, personal property, and enforceable claims against others (bank accounts, stocks, mutual funds, etc.).
Assign
To transfer interest.
Assignee
One who receives an assignment or transfer of rights.
Assignor
One who makes an assignment or transfer of rights to another.
Assumable Mortgage
A mortgage that allows a new owner to take over its obligations.
Assumption
The process of transferring the seller's existing mortgage and liability for payments to the buyer when purchasing a property, which usually saves the buyer money, since assuming a new mortgage incurs additional closing costs and possibly higher interest charges.
Assumption Clause
The provision in an assumable mortgage that allows a buyer to take responsibility for that mortgage from the seller.
Assumption Fee
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.
Attachment
Seizure of property through Court process to force payment of a debt.
Attorney-in-fact
One who holds a power of attorney from another to execute legal documents on behalf of the grantor of the power.
Automated Underwriting
After you complete your loan application with a lender, it is sent to "underwriting" for review. In short, underwriting is the process used to analyze how you have managed credit obligations in the past, whether you have the ability to repay the mortgage loan you are applying for (i.e., your income and assets), and whether the price you are willing to pay for the home is supported by the price of the property.
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