When you start shopping for a new home, you may encounter some words and terms with which you are unfamiliar. The following glossary will help you to be a better informed shopper.
Adjustable Rate Mortgage (ARM) – A loan whose interest rate is adjusted according to movements in the financial market.
Amortization – A payment plan by which a borrower reduces a debt gradually through monthly payments of principal and interest.
Annual Percentage Rate (APR) – The annual cost off credit over the life of a loan, including interest, service charges, points, loan fees, mortgage insurance, and other items.
Appraisal – An evaluation to determine what a piece of property would sell for in the marketplace.
Appreciation – The increase in the value of a property.
Assessment – A tax levied on a property or a value placed on the worth of property by a taxing authority.
Assumption – A transaction allowing the buyer of a home to assume responsibility for an existing loan on the home instead of getting a new loan.