Top: Business: Finance and Insurance: Mortgages: Terminology: A




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Amenity

a feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, Woods, water) or man-made (like a swimming pool or garden).


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Amortization

repayment of a mortgage loan through monthly installments of principal and interest; the monthly payment amount is based on a schedule that will allow you to own your home at the end of a specific time period (for example, 15 or 30 years)


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Annual Percentage Rate

(APR): calculated by using a standard formula, the APR shows the cost of a loan; expressed as a yearly interest rate, it includes the interest, points, mortgage insurance, and other fees associated with the loan.


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Application

: the first step in the official loan approval process; this form is used to record important information about the potential borrower necessary to the underwriting process.


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Appraisal

: a document that gives an estimate of a property's fair market value; an appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property.


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Appraiser

: a qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.


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ARM

: Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the Change in monthly -payment amount, however, is usually subject to a Cap.


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Assessor

: a government official who is responsible for determining the value of a property for the purpose of taxation.


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Assumable mortgage

: a mortgage that can be transferred from a seller to a buyer; once the loan is assumed by the buyer the seller is no longer responsible for repaying it; there may be a fee and/or a credit package involved in the transfer of an assumable mortgage.



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