Absentee Owner - An owner who does not personally manage or reside at the owned property.

Acceleration Clause - A provision in a mortgage that gives the lender the right to demand payment of the entire loan balance if a monthly payment is missed.

Acceptance - A party�s consent to enter into a contract and be bound by the terms of the offer.

Additional Principal Payment - A payment by a borrower of more than the scheduled principal amount due, in order to reduce the remaining balance of the loan.

Adjustable Rate Mortgage - An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Adjusted Basis - The original cost of a property, plus the value of any capital expenditures for improvements to the property, minus any depreciation taken.

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.

Amortization - A loan repayment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal and interest.

Annual Percentage Rate (APR) - To make it easier for consumers to compare mortgage loan interest rates, the federal government developed a standard format called an "Annual Percentage Rate" or APR to provide an effective interest rate for comparison shopping purposes. Some of the costs that you pay at closing are factored into the APR for ease of comparison. Your actual monthly payments are based on the periodic interest rate, not the APR.

Annuity - A specified income paid yearly or at other regular intervals, often on a guaranteed dollar basis.

Application - The process of applying for a mortgage. The term "application" generally refers to a form that is used to collect financial information from a borrower by a lender.

Appraisal - An analysis performed by a qualified individual to determine the estimated value of a home.

Appreciation - An increase in the value of a property due to changes in market conditions and other factors. The opposite of depreciation.

APR - To make it easier for consumers to compare mortgage loan interest rates the federal government developed a standard format, called an "Annual Percentage Rate" or APR, to provide an effective interest rate for comparison shopping purposes. Some of the costs that you pay at closing are factored into the APR for ease of comparison. Your actual monthly payments are based on the periodic interest rate, not the APR.

ARM - An ARM (adjustable rate mortgage) is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Assessed Value - The valuation placed on property by a public tax assessor for purposes of taxation.

Asset - 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).

Assignment - The transfer of a mortgage from one person to another.

Assumable Mortgage - A loan that does not have to be paid in full if the home is sold. Instead, the new owner can take over payments on the existing loan and pay the seller the difference between the sales price and the balance on the loan.

Attorney Opinion - Commonly referred to as a "title opinion," this fee is related to the title insurance required by the lender. It is a document issued by an attorney listing any liens or encumbrances that could affect the property that are a matter of public record. The attorney opinion fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders.

Attorney-in-fact - One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.