Dictionary

Abstract - The notes made by a title examiner based on his examination of the land records. These notes are a concise summary of the transactions affecting the property. The title agency produces a BINDER from the information in the abstract.

Acceleration clause - A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as the sale of the property, or a delinquency in the repayment of the note.

Accretion - The buildup of land from natural forces such as wind or water.

Acknowledgement - As a verb, the confirmation by a party executing a legal document that this is his signature and voluntary act. This confirmation is made to an authorized officer of the Court or notary public who signs a statement also called an acknowledgment.

Acre - 43,560 square feet of land.

Addendum - A form/document added to a contract or agreement also known as a Rider.

Adjustable rate mortgage (arm) - A mortgage loan which bears interest at a rate subject to change during the term of the loan.

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.

Administrator - A person appointed by the Court to settle the estate of a person who dies without a will. The feminine form is Administratrix. Compare, EXECUTOR.

Adverse possession - A claim made against land titled to another person based on open, notorious and hostile possession and use of the land to the exclusion of the titled owner.

Agency - A relationship in which the agent is given the authority to act on behalf of another person (Principal).

Agreement - A meeting of minds.

Air rights - The right to the air space above the real property.

Alta owner's policy - A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy to include unrecorded mechanic's liens; unrecorded physical easements; facts a physical survey would show ; water and mineral rights; and rights of parties in possession, such as tenants and buyers rights under unrecorded instruments.

Amendment - A change to the correct or alteration to the original document/agreement without changing its principal essence.

Amortization - The periodic principal pay down of a loan.

Amortized loan - A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity.

Annual percentage rate - Is 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 point and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan.

Appraisal - An estimate of the value of property, made by a qualified professional called an "appraiser." Most states require licenses. Various lenders have their own lists of approved appraisers.

Approved attorney - An attorney authorized by a title insurance company to handle closings and render title opinions.

Appurtenance - Anything attached to the land or used with it passing to the new owner.

Assessment - A local tax levied against a property for a specific purpose, such as a sewer or street lights.

Assign - To transfer interest.

Assignee - One who receives an assignment or transfer of rights. An assignment of a contract transfers the right to buy property.

Assignor - The one who assigns to another person.

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 - Seizure of property through Court process to repay a debt.

Attorney in fact - A type of agency relationship where one person holds a POWER OF ATTORNEY allowing him to execute legal documents on behalf of another. Decisions made by the attorney in fact are binding on the principal.