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Law Office of William F. Scofield
William F. Scofield, LLC Attorney at Law
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Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z all
 
Abstract of Title
A public record showing a condensed title history of the property.
 
Acceleration Clause
A provision that requires that the entire loan balance (principal and interest) becomes due if the borrower defaults on the loan or transfers title to another party.
 
Adjustable Rate Mortgage(ARM)
A mortgage with an interest rate that changes periodically, according to a preselected "index", such as Treasury Bills. Monthly payments can go up or down when the rate is adjusted.
 
Adjustment Date
The date that an ARMís interest rate is changed.
 
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).
 
Amortization
The process of paying off the debt or mortgage at the end of a fixed period, usually by equal monthly payments (which monthly payments include both principal and interest and including accrued interest on the outstanding balance). Monthly payments are mostly interest at first (because the debt is higher), and almost entirely principal in later years, when the loan balance is smaller.
 
Amortization Schedule
A table which shows the distribution of monthly paymentsóhow much will be applied toward principal and how much toward interest over the life of the loan.
 
Annual Percentage Rate (APR)
A figure which attempts to reflect the total cost of a loan, expressed as a yearly rate. Because the APR takes the total cost of credit into account, it can never be lower, and is almost higher than the stated note rate or advertised rate. Within reason, the APR allows you to compare different types of mortgages based on the total cost.
 
Application Form (1003)
The standard form used to apply for a mortgage. The form gives the lender information about you regarding your income, savings, assets, debts, and more.
 
Appraisal
A written justification of the value of a property based upon a factual analysis, based on the prices paid for similar properties in the area. The valuation of the property is made by a qualified professional called an Appraiser.
 
Appraised Value
An opinion of the fair value of a property, generally by a qualified and/or licensed professional an appraiser.
 
Appraiser
A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.
 
Appreciation
The increase in the value of a property over time, usually due to changes in market conditions, inflation, or improvements.
 
APR
See Annual Percentage Rate (APR)
 
ARM
See Adjustable Rate Mortgage(ARM)
 
Armís Length Transaction
Legal terminology meaning that there existed no special relationship between the parties involved in any matter that would taint the result.
 
Assessed Value
The valuation placed on property for the purpose fixing the amount property taxes.
 
Assessment
The process of setting the value of a property for tax purposes.
 
Assessor
A government official who is responsible for determining the value of a property for the purpose of taxation.
 
Asset
Personal and Real property: items of value, which can be quickly converted into cash. These items includeóbut are not limited toóbank accounts, stocks, bonds, mutual funds, real estate, personal property, etc.
 
Assignment
Transfer of ownership from one individual or company to another. Lenders often assign mortgages, which they make to Fannie Mae, or other entities, which specialize in buying mortgages.
 
Assignment of Mortgage
The transfer of a mortgage from one lender to another. Mortgages are often sold after the closing by the lender you worked with at closing and other lenders. In connection with the sale, the mortgage is assigned by your old lender to your new lender. Often, the sale of a customerís mortgage is anticipated before the loan even closes. The sale and assignment of the mortgage in no way effects the interest rate or other terms which the borrower agreed to at closing. You may, however, send your mortgage payments to a new address and have new contact information. Another reason for the assignment of the mortgage is for the purpose of saving the borrower the cost of mortgage tax. This practice of assigning mortgages to minimize mortgage recording tax is most common in New York State, which has a particularly large mortgage tax. In New York, and some other states, when a home is purchased or refinanced, the state will impose mortgage tax based upon a percentage of the loan amount. When refinancing, mortgage tax may only have to be paid on the difference of the outstanding loan balance on the old loan and the new loan amount, if higher. An assignment of mortgage is also known as a Consolidation Extension Modification (CEM) or Modification Extension Consolidation Agreement (MECA). The assigning lender (your old lender) usually charges a legal fee and document preparation fee to assign the mortgage. Not all lenders are willing to take other lendersí mortgages by assignment. If your old mortgage is relatively large (say, over $150,000) , this fee for the assignment is usually lower than paying the full mortgage recording tax on the entire amount of the refinance.
 
Assumable Mortgage
A mortgage which can be assumed by the buyer when a home is sold. Not commonly available in recent years.
 
Assumption
The process of assuming a mortgage. The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing costs and new, possibly higher, market-rate interest charge will apply. However, for the seller to be released from liability on the mortgage, the lenderís consent will be needed. Currently, very few mortgages permit assumptions.
 
These definitions are provided for informational purposes only. William Scofield, LLC shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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