David Saks' Glossary of Real Estate & Mortgage Terms : The A's

David Saks'

Glossary of Real Estate and Mortgage Terms

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   Abstract

A summary; an abridgment. Before the use of photostatic copying public records were kept by abstracts of recorded documents.

Abstract of Title

A compilation of the recorded documents relating to a parcel of land, from which an attorney may give an option as to the condition of title. Still in use in some states, but giving way to the use of title insurance.

Acre

A measure, usually of land, equal to 160 sq. rods (43,560 sq. ft.) in any shape.

Action to Quiet Title

A court action to establish ownership to real property. Although technically not an action to remove a cloud on a title, the two actions are usually referred to as "Quiet Title" actions.

Adjustable Rate Mortgage(ARM)

A mortgage where the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. You may also see ARM's referred to as AML's or VRM's.

Agency

An Agency relationship is one in which one person is empowered to act on behalf of another, subject to the control and consent of the person being represented.

Agent

The person who is acting on behalf of the principal or client.

Agreement of Sale

In some states it is synonymous with a purchase agreement (Purchase Agreement). In other states, it is synonymous with a land contract (Land Contract).

Alienation Clause

A clause calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property.

Amortize

To reduce a debt by regular payments of both principal and interest, as opposed to interest only payment.

Annual Percentage Rate(APR)

A measure of the cost of credit, expressed as a yearly rate. It includes interest as well as other charges. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans, including mortgage plans.

Appraised Value

An option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.

Arrears

Payment made after its due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance.

Assumability

When a home is sold, the seller may be able to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require credit review of the new borrower and may charge a fee for the assumption. Some mortgages contain a due-on-sale clause, which means that the mortgage may not be transferable to the new buyer. Instead, the lender may make you pay the entire balance that is due when you sell the home. Assumability can help you attract buyers if you sell your home.

Assumption of Mortgage

  Agreement by a buyer to assume the liability under an    existing  note secured by a mortgage or deed of trust.