As a 1st Time Home Buyer, it could be really easy to get overwhelmed by all the terminology that realtors and mortgage brokers use. In many cases, you probably never heard of APR, Interest rates or appraised value. 

So to help you feel more comfortable when talking to an agent or your bank representative, I have listed below the most common used terms when buying a home, applying for a loan or scheduling your first showing appointment.

Terms that starts with the letter “A”:

Accelerated cost recovery system

A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.

Accelerated depreciation

A bookkeeping method that depreciates property faster in the early years of ownership.

Acceleration clause

A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.

Acceptance

The seller’s written approval of a buyer’s offer.

Access

Any means by which a person can enter a property.

Accessibility

The degree to which a building or site allows access to people with disabilities.

Accretion

The gradual addition to the shore or bank of a waterway by deposits of sand or silt.

Acknowledgment

A written declaration affirming that a person acted voluntarily.

Acre

A measurement of land equal to 43,560 square feet.

Acre foot

The volume of material needed to cover an acre of land one foot deep.

Active solar system

A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.

Actual age

The number of years a structure has been standing.

Add-on interest

The interest a borrower pays on the principal for the duration of the loan.

Addendum

An addition or change to a contract.

Additional principal payment

Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.

Adjustable-rate mortgage (ARM)

A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.

Adjusted cost basis

The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.

Adjustment period

The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Administrator

A person given authority to manage and distribute the estate of someone who died without leaving a will.

Administrator’s deed

A legal document that an administrator of an estate uses to transfer property.

Adverse possession

The acquisition of title to property through possession without the owner’s consent for a certain period of time.

Adverse use

The access and use of property without the owner’s consent.

Aeolian soil

Soil that is composed of materials deposited by the wind.

Affiant

A person who makes a sworn statement.

Affirmation

A substitution for an oath granted to people based on religious reasons.

Agency

The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.

Agency closing

The process by which a lender uses a title company or other firm as an agent to complete a loan.

Agent

A person licensed by the state to conduct real estate transactions.

Agreed boundary

A compromise boundary to which property owners agree in order to resolve a dispute.

Agreement of sale

A document the buyer initiates and the seller approves that details the price and terms of the transaction.

Alcove

A recessed section of a room, such as a breakfast nook.

Alienation clause

A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.

Alkali

Mineral salt found in soil.

Alkaline soil

Soil that contains a higher concentration of mineral salt than natural acid.

Alley

A lane behind a row of buildings or between two rows of buildings.

Allowances

Budgets offered by builders of new homes for the purchase of carpeting and fixtures.

Alternative mortgage

Any home loan that does not conform to a standard fixed-rate mortgage.

Aluminum siding

A metal covering that provides an alternative to paint for owners of wood homes.

Aluminum-clad windows

Wooden windows with aluminum covering the exterior.

Amenities

Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.

American Society of Home Inspectors

The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744.

Americans with Disabilities Act

A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.

Amortization

The process of paying the principal and interest on a loan through regularly scheduled installments.

Amortization tables

Mathematical tables that lenders use to calculate a borrower’s monthly payment.

Amperage

The strength of an electrical current.

Anchor bolt

A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual

Something that happens once a year.

Annual Percentage Rate (APR)

The cost of the loan expressed as a yearly rate on the balance of the loan.

Annual mortgagor statement

A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.

Annuity

The payment of a fixed sum to an investor at regular intervals.

Anticipatory breach

A communication that informs a party that the obligations of the original contract will not be fulfilled.

Application

A document that details a potential borrower’s income, debt and other obligations to determine credit worthiness.

Application fee

The fee that a lender charges to process a loan application.

Appraisal

An opinion of the value of a property at a given point in time.

Appraisal fee

The fee that an appraiser charges to estimate the market value of the property.

Appraisal report

A detailed written report on the value of a property based on recent sales of comparable sites in the area.

Appraised value

An opinion of the current market value of a property.

Appreciation

An increase in the value of a home or other property.

Arbitration

A method of resolving a dispute in which a third party renders a decision.

Arbor

An area shaded by trees, shrubs or vines on a latticework structure.

Arch

A curved structure that supports weight over an area, such as a doorway.

Architect

A licensed professional who designs homes, buildings and other structures.

Architectural fees

The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget.

As-is condition

The purchase or sale of a property in its existing condition.

Asbestos

A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.

Asking price

A seller’s initial price for a property.

Assessed value

A tax assessor’s determination of the value of a home in order to calculate a tax base.

Assessment

The estimated value of a piece of real estate or a levy placed on property in addition to taxes.

Assets

Items of value, which include cash, real estate, securities and investments.

Assignor

A person who transfers rights and interests of a property.

Assumable mortgage

A mortgage that can be transferred to another borrower.

Assumption clause

A provision that allows a buyer to take responsibility for the mortgage from a seller.

Assumption fee

A fee the lender charges to process new records for a buyer who assumes an existing loan.

Average price

The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.

 

We have a lot to cover, so hang in there. “B” is coming soon.

Good luck!