Glossary
A
Search by alphabetic
- Acceleration Clause
- A term in a mortgage agreement that requires the borrower to pay off the loan immediately under certain conditions.
- Accounts Receivable Financing
- Accounts receivable financing, also known as “factoring,” is a practice in which a business sells its invoices to a third-party financial company to collect upon.
- Accrued Interest
- The amount of mortgage interest that has been earned but not yet paid.
- Adjustable Rate Mortgage (ARM)
- A mortgage with an interest rate that can change during the term of the loan. The timing and calculation of adjustments (also called resets) are determined by the loan program, and these details are disclosed in the mortgage documents.
- Adjustment Interval
- The time between interest rate adjustments of an adjustable rate mortgage (ARM).
- Amortization
- Amortization is the gradual reduction of a debt by regular scheduled payments of interest and principal.
- Amount Owed on Trade
- If your current car is not paid off, the dealership will look at the amount you currently owe on the car.
- Annual Fee
- A credit card issuer may charge you a fee each year for your account.
- Annual Income
- This is the combined annual income for you and your co-borrower.
- Annual Percentage Rate
- The cost of credit, including the interest and fees, expressed as an interest rate. APR was created to make it easier for consumers to compare loans with different rates and costs, and by law it must be disclosed in all advertising.
- Appraisal
- A written estimate of the value of real or personal property prepared by a qualified appraiser. Mortgage lenders almost always require a property appraisal before approving a home loan.
- Appreciation
- Added value to real estate or other assets that is the result of increasing prices.
- Asking Price
- The price requested by a seller when a home or property is listed for sale. This amount is often open to negotiation.
- Assumable Mortgage
- A mortgage that may be “taken over” by a qualified third party. Most assumable mortgages are government-backed products like VA, FHA and USDA home loans.
- Assumption Approval Clause
- A clause informing borrowers that they cannot assume a home loan without agency approval.
- Assumption Indemnity Clause
- A clause informing buyers that they must agree to assume all of the obligations of the original borrower under the terms of the instruments creating and securing the loan.
- Auto Refinance
- An auto refinance is the process of applying for a new auto loan to pay off your existing auto loan, hopefully with a better interest rate and better terms.