Real Estate
Glossary
This glossary has been provided to help Colorado Springs
homebuyers understand the unique language
of the real estate business.
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acceleration clause
A provision in a mortgage that gives the Broker the right to
demand payment of the entire principal balance if a monthly
payment is missed.
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 that permits the Broker to adjust its interest rate
periodically on the basis of changes in a specified index.
adjusted basis
The original cost of a property plus the value of any capital
expenditures for improvements to the property minus any depreciation
taken.
adjustment date
The date on which the interest rate changes for an adjustable-rate
mortgage (ARM).
adjustment period
The period that elapses between the adjustment dates for an
adjustable-rate mortgage (ARM).
administrator
A person appointed by a probate court to administer the estate
of a person who died intestate.
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.
amenity
A feature of real property that enhances its attractiveness
and increases the occupant’s or user’s satisfaction although
the feature is not essential to the property’s use. Natural
amenities include a pleasant or desirable location near water,
scenic views of the surrounding area, etc. Human-made amenities
include swimming pools, tennis courts, community buildings,
and other recreational facilities.
amortization
The gradual repayment of a mortgage loan by installments.
amortization schedule
A timetable for payment of a mortgage loan. An amortization
schedule shows the amount of each payment applied to interest
and principal
and shows the remaining balance after each payment is made.
amortization term
The amount of time required to amortize the mortgage loan.
The amortization term is expressed as a number of months. For
example,
for a 30-year fixed-rate mortgage, the amortization term is
360 months.
amortize
To repay a mortgage with regular payments that cover both principal
and interest.
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)
The cost of a mortgage stated as a yearly rate; includes such
items as interest, mortgage insurance, and loan origination
fee (points).
annuity
An amount paid yearly or at other regular intervals, often
on a guaranteed dollar basis.
application
A form used to apply for a mortgage loan and to record pertinent
information concerning a prospective mortgagor and the proposed
security.
appraisal
A written analysis of the estimated value of a property prepared
by a qualified appraiser. Contrast with home inspection.
appraised value
An opinion of a property's fair market value, based on an appraiser's
knowledge, experience, and analysis of the property.
appraiser
A person qualified by education, training, and experience to
estimate the value of real property and personal property.
appreciation
An increase in the value of a property due to changes in market
conditions or other causes. The opposite of depreciation.
assessed value
The valuation placed on property by a public tax assessor for
purposes of taxation.
assessment
The process of placing a value on property for the strict purpose
of taxation. May also refer to a levy against property for
a special purpose, such as a sewer assessment.
assessment rolls
The public record of taxable property.
assessor
A public official who establishes the value of a property for
taxation purposes.
asset
Anything of monetary value that is owned by a person. Assets
include real property, personal property, and enforceable claims
against others (including bank accounts, stocks, mutual funds,
and so on).
assignment
The transfer of a mortgage from one person to another.
assumable mortgage
A mortgage that can be taken over ("assumed") by
the buyer when a home is sold.
assumption
The transfer of the seller’s existing mortgage to the
buyer. See assumable mortgage.
assumption clause
A provision in an assumable mortgage that allows a buyer to
assume responsibility for the mortgage from the seller. The
loan does
not need to be paid in full by the original borrower upon sale
or transfer of the property.
assumption fee
The fee paid to a Broker (usually by the purchaser of real
property) resulting from the assumption of an existing mortgage.
attorney-in-fact
One who holds a power of attorney from another to execute documents
on behalf of the grantor of the power.
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