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| Acceleration Clause-
A condition within a mortgage agreement that may require the remaining balance of a loan to become due immediately should a borrower neglect to fulfill payment obligations or breach any additional conditions stated in the mortgage.
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| Adjustable-Rate Mortgage (ARM)-
A loan with an interest rate that periodically changes in accordance with a current index, such as Federal Interest Rates, over the maturity of the loan. Typically, this type of mortgage cannot jump more than two percentage points per year, or six points over the origination rate. |
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| After Repair Value (ARV)-
The potential value of a property after necessary and cosmetic repairs have been made.
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| Alternative Financing-
Mortgage instruments enabling the buyer to qualify at a lower-than-market rate. This classification includes adjustable rate mortgages, buy-down mortgages, and graduated payment mortgages |
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| Amortization-
A payment plan with allows a borrower to make monthly payments throughout the specified duration of the loan in order to reduce debt gradually. Payments made must cover both principal and accrued interest.
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| Annual Percentage Rate (APR)-
The yearly interest rate place upon a loan that reflect the true annual cost of borrowing. This value is created in accordance with a government formula and is legally required to be disclosed |
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| Appreciation-
An increase in the value of a property that reflects changes in market conditions.
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| Assessment-
A value placed on a property for taxation purposes.
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| Assign-
The signing of documents that transfer ownership of a property or right to a property to another party.
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| Assumable Mortgage-
A pre-existing loan that a prospective buyer can take over, instead of applying for a new mortgage. This type of financing saves the buyer thousands of dollars in loan origination fees and closing costs. Although popular, be aware assuming a traditional mortgage is in violation of the “due-on-sale” clause in the seller’s conventional loan. While many lenders do not pursue violators (they must be aware of the assumption, and most are not), the option to foreclose on the property or demand a new loan be originated is a possibility.
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