Mortgage Definitions (# - A)

7/23 and 5/25 Mortgages
Mortgages with a one time rate adjustment after seven years and five years respectively.

3/1, 5/1, 7/, and 10/1 ARMs
Adjustable rate mortgages in which rate is fixed for three year, five year, seven year and 10-year peridods, respectively, but may adjust annually after that.

Acceleration
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the ortgagor (borrower), or by using the right vested in the Due on Sale Clause.

Adjustable Rate Mortgage (ARM)
A mortgage in which the interst rate is adjustaed periodically based on a pre-selected index. Also sometimes known as a renegotiable rate mortgage, variable rate mortgage or Canadian rollover mortgage.

Adjusted Basis
The cost of a property plus the calue of any capital expenditures for improvements to the property minus any depreciation taken,

Adjustment date
The date that the interest rate changes on a an adjustable rate mortgage. (ARM)

Adjustment Intercal
On an adjustable rate mortgage, the time between changes in the interest rate and/ or monthly payment, typically one, three or five years depending on the index.

Adjustment Period
The period elapsing between adjustment dates for an adjustable rate mortgage(ARM)

Affordability Analysis
An analysis of a buyer's ability to afford the purchase of a home. Reviews income, liabilites and available funds, and condsiders the type of mortgage you paln to use, the area where you want to purchase a home and closing costs that are likely.

Amortization
Loan payment divided into equal periodic payments calculated to pay off the debt at the end of a fixed period, including accured interst on the outstanding balance

Amortization Term
The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for 30- year fixed rate mortgage.

Annual Percentage Rate (APR)
The measurement of the full cost of a loan including interest and loan fees expressed as a yearly percentage rate. Because all lenders aplly the same rules in calculating the annual percentage rate, it provides consumers with a good basis for comparing the cost of different loans.

Appraisal
An estimate of the value of property made by a qualified professional called an "appraiser"

Appraised Value
An opinion of a property's fair market value, based on an appraiser's knowledge experience, and analysis of the property.

Assessment
A local tax levied against a property for a specific purpose, such as a sewer or street lights.

Assignment
The transfer of a mortgage form one person to another.

Assumability
An assumable mortgage can be transferred from the seller to the new buyer. Generally requires a credit review of the new borrower and lenders may charge a fee for the assumption. If a mortgage contains a due on sale clause, it may not be assumed by a new buyer.

Assumption
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage for the seller. Assuming a loan can uaually save the buyer money since this is an existin gmortgage debt, unlike a new mortgage where closing cost and new, probably higher, market rate interst charges will apply.

Assumption Fee
The fee paid to a lender(usually by the purchaser of real property) when an assumption takes place