ACRE
43,560 square feet. A measurement of area.

ACTUAL AGE  
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE

ADJUSTMENT DATE 
The date the interest rate changes on an adjustable rate mortgage.

ADDENDUM   
A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.

ADJUSTABLE-RATE MORTGAGE (ARM)  
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.

ADJUSTED BASIS   
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.

ADJUSTED SALES PRICE   
An opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.

AGENT   
A person who has been appointed to act on behalf of another for a particular transaction.

AMORTIZATION   
The repayment of a loan through regular periodic payment.

AMORTIZATION SCHEDULE   
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.

AMORTIZATION TERM   
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.

ANNUAL PERCENTAGE RATE (APR)   
The rate of annual interest charged on a loan.

ANNUITY   
A sum of money paid at regular intervals, often annually.

APPLICATION   
A form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.

APPRAISAL   
A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.

APPRAISAL REPORT   
The end result of the appraisal process, usually consists of one major, standardized form such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the opinion of value of the subject property and support that opinion with corroborating information.

APPRAISER   
An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.

APPRECIATION   
The natural rise in property value due to market forces.

ASSESSED VALUE   
The value of a property according to jurisdictional tax assessment.

ASSESSMENT   
The function of assigning a value to a property for the purpose of levying taxes.

ASSESSMENT RATIO   
The comparative relationship of a property's assessed value to its market value.

ASSESSOR   
The jurisdictional official who performs the assessment and assigns the value of a property.

ASSET   
Any item of value which a person owns.

ASSIGNMENT   
Transfer of ownership of a mortgage - usually when the loan is sold to another company.

BALLOON MORTGAGE   
A mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment.

BALLOON PAYMENT   
The final large payment at the end of a balloon mortgage term.

BANKRUPTCY   
When a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.

BRIDGE FINANCING   
An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.

CAP   
Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.

CLEAR TITLE   
Ownership of property that is not encumbered by any counter-claim or lien.

CLOSING   
A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).

CLOSING COSTS   
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.

CLOSING STATEMENT   
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

COLLATERAL   
An asset which is placed at risk to secure the repayment of a loan.

COLLECTION   
The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.

CONSTRUCTION LOAN   
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.

CREDIT   
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.

CREDIT HISTORY   
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

CREDIT REPORT   
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.

DATE OF APPRAISAL   
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEED   
A document indicating the ownership of a property.

DEED OF TRUST   
A document which transfers title in a property to a trustee, who's obligations and powers are stipulated. Often used in mortgage transactions.

DEPOSIT   
Cash given along with an offer to purchase property, Also called EARNEST MONEY.

DOWN PAYMENT   
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.

EARNEST MONEY DEPOSIT   
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.

EQUITY   
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP   
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ESCROW   
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.

ESCROW ACCOUNT   
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that goes into the escrow account each month.

FAIR MARKET VALUE   
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE   
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.

FEE APPRAISER   
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FHA MORTGAGE   
A mortgage that is insured by the Federal Housing Administration (FHA).

FIRST MORTGAGE   
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)   
A mortgage which has a fixed rate of interest over the life of the loan.

FORECLOSURE   
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

HOME EQUITY CONVERSION MORTGAGE (HECM)   
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically don't have to be repaid until the borrower is no longer occupying the home.

HOME INSPECTOR   
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER'S INSURANCE   
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

INTEREST RATE   
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

JUDGMENT   
An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payees property as collateral.

LEGAL DESCRIPTION   
The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

LINE OF CREDIT   
An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LOAN    
Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

LOAN OFFICER   
A person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION   
How a lender refers to the process of writing new loans.

LOAN SERVICING   
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV)   
The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN    
An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

MORTGAGE   
A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGEE   
The entity that lends money in a real estate transaction.

MORTGAGE INSURANCE   
A policy that fulfills that obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

MORTGAGE INSURANCE PREMIUM (MIP)   
An fee that is often included in mortgage payments that pays for mortgage insurance coverage.

NOTE   
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE   
The interest rate stated on a mortgage note.

ORIGINATION FEE   
Refers to the total number of points paid by a borrower at closing.

POINTS
Sometimes called "discount points." A point is one percent of the amount of the mortgage loan. For example, if a loan is for $25,000, one point is $250. Points are charged by a lender to raise the yield on his loan at a time when money is tight, interest rates are high, and there is a legal limit to the interest rate that can be charged on a mortgage. Buyers are prohibited from paying points on HUD or Veterans' Administration guaranteed loans (sellers can pay, however). On a conventional mortgage, points may be paid by either buyer or seller or split between them.

PRE-APPROVAL   
The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREPAYMENT   
Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY   
A fee that may be charged to a borrower who pays off a loan before it is due.

PRIME RATE   
The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRIME RATE   
The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL   
The amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)   
The most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI)   
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

QUITCLAIM DEED   
A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RATE LOCK   
A guarantee from a lender of a specific interest rate for a period of time.

RECORDING FEES
Fees charged by the Register of Deeds for entering the deed and the mortgage into the public record.

SURVEY   
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

TAX SERVICE FEE
A fee charged by the Lender, to hire an outside agency to verify that Property Taxes have been paid each year. This is a one time fee.

TITLE   
A specific document which serves as proof of ownership.

TITLE INSURANCE
Provides a record of liens or other encumbrance against the propert. The Seller generally pay to have the title insurance updated and the Buyers pay for the Lender's title insurance. The fees are usually paid at closing.

TITLE COMPANY   
An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.

TITLE SEARCH   
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.

UNDERWRITING FEE
A fee, charged by the Lender, for reviewing the loan file for approval.