Bear Island Land Co., Inc.

~Your Recreational Real Estate Professionals~

Dictionary of Terms

~A~

 

Acceleration Clause
Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire outstanding balance of the loan should you default on your loan.
Acceptance
An offeree’s consent to enter into a contract and be bound by the terms of the offer.
Additional Principal Payment
A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.
Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes known as the renegotiable rate mortgage, the variable rate mortgagee or the Canadian rollover mortgage.
Affordability Analysis
A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that you might expect to pay.
Adjustment Interval
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.
Agency
A legal relationship resulting from an agreement or contract, either expressed or implied, written or oral, whereby one person, called the agent, is employed by another, called the principal, to do certain acts in dealing with a third party.
Amenities
In real estate, amenities refer to such circumstances, in regard to location outlook, or access to a park, lake, highway, view or the like which enhance the pleasantness or desirability of real estate and which contribute to the pleasure and enjoyment of the occupants.
Amortization
Loan repayment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.
Amortization Table
Mathematical table that shows how a mortgage or other loan is gradually repaid by applying the appropriate amounts of the loan payment to principal and interest. In the beginning of the repayment period, only a small portion is applied to reducing the loan principal. As the loan approaches maturity, the portion of the payment applied to principal rises.
Annual Mortgagor Statement
A report sent to the mortgagor each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.
Annual Percentage Rate (APR)
An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other costs. For example, if a borrower pays $500 in closing costs to obtain a $10,000 loan, the APR is higher than the simple interest rate because the borrower is repaying a $10,000 loan but only receiving net proceeds of $9,500. The federal Truth-in-Lending Act requires lenders to disclose the APR.
Appraisal
In real estate, an estimate of the quality or value of property, made by a qualified professional called an "appraiser"
Appurtenance
That which belongs to something else; something adapted to the use of the real property to which it is connected or belongs, and which was intended to be a permanent addition to the land, and which passes as an incident to said land, as a house, barn, garage, right of
Assessed Valuation
The estimate of value by a unit of government for taxation purposes.
Assignee
The party to whom a legal right has been assigned or transferred.
Assignment
A transfer to another of a legal right.
Assignor
The party who assigns or transfers a legal right.
Assumption
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 charges will apply.
Attachment
A type of encumbrance, permitted only under special circumstances, which is placed against the real estate of a defendant in a pending lawsuit for money damages.

 

RETURN TO PREVIOUS PAGE

 

Ely, Minnesota's most experienced Realtors, serving Buyers and Sellers in the Ely, MN area since 1995.