Abstract (of title)
A written summary of the title history of a particular piece of real estate.

Acceleration Clause
A provision of a mortgage or note which provides that the entire outstanding balance will become due and payable in the event of default.

Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically, based on the movement of a financial index.

Amortization
Repayment of loan by installment payments. As the payments are made, the debt is reduced so that at the end of fixed period or term, no money will be owed.

Annual Percentage Rate (APR)
The APR is the cost of consumer credit as a percentage spread out over the term of the loan. It includes any charges payable directly or indirectly by the consumer and imposed directly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction. Charges that are included in the APR calculation should be indicated as Prepaid Finance Charges* on the Good Faith Estimate. Please note that certain items such as Mortgage Insurance Premiums effect the APR calculation directly.

Application Fee
That part of the closing costs pre-paid to the lender at time of application to cover initial expenses.

Appraisal
A report made by a qualified person as to the value of a property as of a given date.

Assessed Value
The value placed on a piece of real estate by the taxing authority for the purpose of taxation. Also called an assessment.

Assumption of Mortgage
The purchaser takes over mortgage payments for the balance of the loan, assuming primary liability. Unless specifically released by the lender, the seller remains secondarily liable.