Abstract of Title: A summary of recorded transactions concerning a property. (An attorney or title insurance company examines an abstract of title for any title defects which must be cleared before a buyer can purchase clear, marketable and insurable title.)

Acceleration Clause: Condition in a mortgage that gives the lender the right to require immediate repayment of the loan balance if regular mortgage payments are not made, or for breach of other conditions of the mortgage.

Acceptance: A buyer's or seller's agreement to enter into a contract and be bound by the terms of the offer.

Accrued Interest: Interest which has been incurred but not paid.

Additional Principal Payment: A payment made by a borrower of more than the scheduled principal amount due, in order to reduce the outstanding balance on the loan, to save on interest over the life of the loan and/or pay off the loan early.

Adjustable Rate Mortgage (ARM): A home loan that permits the lender to adjust its interest rate periodically during the life of the loan. The interest rate will correspond with the rise and fall as the US Financial Market.

Adjustment Interval or Adjustment Period: The length of time between rate adjustments on an Adjustable Rate Mortgage (ARM).

Agreement of Sale: Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.

Alternative Documentation: A substitute method of providing the documentation necessary to approve a loan. For example, bank statements may be substituted if it is not possible to provide written verification of the bank balance directly from the borrower’s bank.

Amenity: A feature of real property that enhances its attractiveness and increases the occupant's or user's satisfaction, although the feature is not essential to the property's use. Natural amenities include a pleasant or desirable location near water, scenic views, etc. Man-made amenities include swimming pools, tennis courts, community buildings, and other recreational facilities.

Amortization: The process of paying off a mortgage in regular increments.

Amortization Schedule: A timetable for payment of a home loan. An amortization schedule shows the amount of each payment applied to interest and principal and the remaining balance after each payment is made.

Amortization term (period): The amount of time it takes to pay off the loan. The amortization term is expressed as a number of months. For example, for a 30 year fixed rate loan, the amortization term is 360 months.

Annual Percentage Rate (APR): A calculation that expresses the total cost of a mortgage loan as a yearly rate (according to a federally mandated procedure). The APR calculation takes into account monthly interest payments, mortgage insurance, points, and certain fees paid at origination. It generally results in a rate slightly higher than the stated interest rate on the loan.

Application: An initial statement of personal and financial information required to approve a loan provided by the borrower and necessary to intitiate the approval process for a loan.

Application Fee: Fee charged by lender at loan closing to cover initial the costs of processing a loan application,

Appraisal: A written estimate of a property’s current market value, based on recent sales information for similar properties, the condition of the property and the neighborhood’s impact on future property value.

Appraisal Fee: A fee charged by a licensed, certified appraiser to provide an appraisal.

Appreciation: An increase in the value of a property due to changes in market conditions or other causes. Inflation, increased demand, home improvement, and sweat equity are all causes of appreciation. The opposite of depreciation.

Assessment: A local tax levied against a property for a specific purpose, such as road or sidewalk construction or sewer or street light installation.

Assessor: A public official who establishes the value of a property for taxation purposes.

Assignment: The transfer of property rights by one person, the assignor, to another, the assignee.

Assumability: A loan feature that allows the loan to be transferred from the seller to the purchaser of a home with the same terms and conditions, subject to lender approval.

Assumption: The buyer's acceptance of liability for the seller's existing home loan.

Assumption clause: A provision in an assumable loan that allows a buyer to assume responsibility for the home loan from the seller. The loan does not need to be paid in full by the original borrower (seller) upon sale or transfer of the property.

Assumption fee: The fee paid to a lender (usually by the buyer) for the lender's agreement to start collecting payment from the buyer instead of the original borrower (seller).