Acceleration Clause -- a provision in a mortgage note that gives a lender the right to demand repayment of the entire balance of the loan under certain conditions, such as the failure to make timely payments or a transfer of the property.

Adjustable-Rate Mortgage (ARM) -- a mortgage that permits the lender to periodically adjust the interest rate on the basis of changes in a specified index.

Affordability Analysis -- an estimation of a borrower's ability to afford the purchase of a home and/or the payment on a loan. An affordability analysis may consider income, liabilities, the type of mortgage, the loan amount, purchase price, the expected closing costs, and other factors.

Amortization -- the gradual reduction of the mortgage debt through regularly scheduled payments over the term of the loan.

Amortization Schedule -- a timetable for payment of a mortgage loan. An amortization schedule shows: the amount of each payment; the amount to be applied to principal and interest; and the remaining principal balance after each payment is made.

Amortize -- to repay a mortgage with regular payments that cover both principal and interest.

Annual Percentage Rate (APR) -- the measure of the cost of credit stated as a yearly rate; includes such items as the stated interest rate, plus certain charges.

Appraisal -- a written estimate or opinion of a property's value prepared by a qualified appraiser.

Appreciation -- an increase in the value of an item (e.g., the increase in the market value of real estate).

Assessed Value -- typically the value placed on property for the purpose of taxation.

Assessor -- a public official who establishes the value of a property for taxation purposes.

Asset -- anything of monetary value that is owned by a person or company. Assets include real property, personal property, stocks, mutual funds, etc.

Assignment of Mortgage -- a document evidencing the transfer of ownership of a mortgage from one person to another.

Assumption Fee -- aA fee a lender charges a buyer who will assume the seller's existing mortgage.

Balloon Mortgage -- a mortgage in which the borrower's monthly payments are amortized over a longer period than the actual term of the mortgage. As a result, at the end of the loan term, the borrower must pay off the remaining balance with a single lump sum payment or refinance the loan.

Boundary -- the dividing line between two adjacent properties. Also see zoning laws and permits.

Bridge Loan -- a short-term loan secured by the borrower's current home (which is usually for sale) that allows the proceeds to be used for building or closing on a new house before the current home is sold. Also known as a "swing loan."

Broker -- an individual or firm that acts as an agent between providers and users of products or services, such as a mortgage broker or real estate broker. See also "Mortgage Broker"

Building Code -- local regulations that set forth the standards and requirements for the construction, maintenance and occupancy of buildings. The codes are designed to provide for the safety, health and welfare of the public.

Breach of contract -- the failure to perform provisions of a contract without a legal excuse.

Cancellation clause -- a clause that details the conditions under which each party may terminate the agreement.

Chain of Title -- the history of all of the documents that have transferred title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

Closing - the process of completing a financial transaction. For mortgage loans, the process of signing mortgage documents, disbursing funds, and, if applicable, transferring ownership of the property. In some jurisdictions, closing is referred to as "escrow," a process by which a buyer and seller deliver legal documents to a third party who completes the transaction in accordance with their instructions.

Clear Title -- ownership that is free of liens, defects, or other legal encumbrances.

Closing Agent -- the person or entity that coordinates the various closing activities, including the preparation and recordation of closing documents and the disbursement of funds. (May be referred to as an escrow agent or settlement agent in some jurisdictions.) Typically the closing is conducted by title companies, escrow companies or attorneys.

Closing Costs - the fees charged in connection with a mortgage loan transaction. Money paid by a buyer (and/or seller or other third party, if applicable) to effect the closing of a mortgage loan, generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney's fee, and prepaid items, such as escrow deposits for taxes and insurance.

Cloud on title -- an invalid encumbrance on real property.

Collateral -- an asset that is pledged as security for a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan agreement.

Commission -- the fee charged for services performed, usually based on a percentage of the price of the items sold (such as the fee a real estate agent earns on the sale of a house).

Commitment Letter -- a binding offer by a lender to loan money at a future date subject to the borrower's compliance with stated conditions.

Common Areas -- those portions of a building, land, or improvements and amenities owned by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Condominium -- a real estate project in which each unit owner holds title to an individual unit in a building, and an undivided interest in the common areas.

Contingency -- a condition that must be met before a contract is legally binding. For example, home purchasers often include a home inspection contingency; the sales contract is not binding unless and until the purchaser has the home inspected.

Cooperative (Co-op) Project -- a project in which a corporation holds title to a residential property and sells shares to individual buyers, who then receive a proprietary lease as their title.

Community property -- property accumulated through the joint efforts of husband and wife. It is a classification of property peculiar to certain states.

Conveyance -- the transfer of title of property.