Acceleration clause
A provision in a loan agreement that allows a lender the right to declare the unpaid balance of a loan due if a borrower misses a payment or commits some other contractual breach.
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Adjustable-rate mortgage (ARM)
A mortgage loan with an interest rate that is tied to an economic index and fluctuates with the market.
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Adjustment period
The timeframe between changes in the interest rate on an ARM (see above). For example, an ARM that changes its rate once per year has a one-year adjustment.
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Agreement of sale
A written signed agreement in which a buyer agrees to buy a specific property and a seller agrees to sell based on certain conditions, including the price and terms of the transaction.
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Amortization
The process of paying the principal and interest on a loan through regularly scheduled installments, instead of interest only payments.
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Annual percentage rate (APR)
The sum of all finance charges on a loan (interest, loan fees, points) expressed as a yearly rate on the balance of the loan.
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Application
A document required by lenders prior to loan approval that details a potential borrower's personal financial situation, including income, debt and other financial obligations.
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Application fee
A fee charged by lenders to process a loan application.
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Appreciation
An increase in the value of a home or other asset due to changes in market conditions or other causes.
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Assessment
A determination of a property's value for the purpose of taxation.
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Assignment
The written transfer of an asset or mortgage from one person to another.
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