 Posted: Mon Jun 20, 2005 9:59 pm Subject: Debt Glossary for alphabet "A" |
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Hi,
I have enlisted all the major terminologies related to debt under alphabet A below -
1 year adjustable (ARM): A loan with a fixed rate for the first 1 year after which the rate changes once each year for the remaining life of the loan. Because the interest rate can change after the first 1 year, the monthly payment may also change.
The same is applicable in case of 10, 2, 3, 5 and 7 year of adjustable (ARM).
A-Credit: The ideal credit rating for a consumer. Having a good credit score lowers the prices which the lenders usually offer you. Usually a FICO score above 720 fetches you the best deal.
Acceleration Clause: This clause allows the lender to speed up the rate of your loan. In such cases the lender can also demand immediate payment of the entire balance of the loan you owe. This happens if you fail to satisfy the legal obligations in the contract.
Accrued Interest: When you fail to pay your interests within a given period, the interest increases and adds to the debt amount you owe.
Adjustment Interval: This is the span of time in between the alteration in the interest rate or monthly payment on an ARM loan.
Affordability: This is a general evaluation of the amount of money you can afford while purchasing a home. The affordability factor gives the consumer a probable price which can be allotted against their affordability factor. It also mentions about the mortgage required to pay that amount.
Agreement of Sale: A contract signed by buyer and seller mentioning the terms and conditions during the sale of a property.
Alternative Documentation: This is a document related to a loan file which is dependent on information such as pay-stubs, W-2 forms, and bank stubs. This is done without depending on verifications sent to third parties for confirmation of statements made on the application.
Amortization: This deals with the periodic repayment of a loan considering payments of both principal amount and interest rates calculated to payoff the loan at the end of a fixed period of time. The loan balance lessens by the amount of the scheduled payment, or with the deposit of any extra payment. The scheduled payment minus the interest amount equals amortization.
Amount Financed: This figure is used to calculate your apr. It represents your loan amount minus any prepaid finance charges and assumes you will keep the loan to maturity and make only the required monthly payments.
Annual Fee: A credit card issuer may charge you a fee each year for your account.
Annual Percentage Rate (APR): There are two interest rates applied to your loan: the Actual Interest Rate and the Annual Percentage Rate. The Actual Rate is the annual interest rate you pay on your loan (sometimes referred to as the "note rate"), and is the rate used to calculate your monthly payments. The amount of interest you pay, as determined by your Actual Rate, is only one of the costs associated with your loan; there may be others. The Annual Percentage Rate (APR) includes both your interest and any additional costs or prepaid finance charges you might pay such as prepaid interest, private mortgage insurance, closing fees, points, etc. Your APR represents the total cost of credit on a yearly basis after all charges are taken into consideration. It will usually be slightly higher than your Actual Rate because it includes these additional items and assumes you will keep the loan to maturity.
Application: An initial statement of personal and financial information required to apply for a loan.
Application Fee: Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.
Appraisal: A written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming. An appraisal of an auto is usually not necessary because auto dealers, sellers and buyers all have quick access to the market value of autos.
Appraisal Fee: The charge for estimating the value of property.
Asset: Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). A lender is very interested in the amount and value of any assets you may have because assets can be used as collateral against a loan. Along with other factors such a borrower's credit rating, assets are also used to help determine the amount of the loan.
Assignment: The transfer of ownership, rights, or interests in property by one person, the assignor, to another, the assignee.
Assignment Recording Fee: In many instances, after closing the lender transfers your loan to a specialized loan "service" who handles the collection of your monthly payments. The Assignment Fee covers the cost of recording this transfer at the local recording office.
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.
Regards
Roxette
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roxette
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Joined: 18 Mar 2005
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