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Glossary

Abstract of Title

documents recording the ownership of property throughout time.

Acceleration

the right of the lender to demand payment on the outstanding balance of a loan.

Acceptance

the written approval of the buyer’s offer by the seller.

Additional Principal Payment

money paid to the lender in addition to the established payment amount used directly against the loan principal to shorten the length of the loan.

Adjustable-Rate Mortgage (ARM)

a mortgage loan that does not have a fixed interest rate. During the life of the loan the interest rate will change based on the index rate. Also referred to as adjustable mortgage loans (AMLs) or variable-rate mortgages (VRMs).

Adjustment Date

the actual date that the interest rate is changed for an ARM.

Adjustment Index

the published market index used to calculate the interest rate of an ARM at the time of origination or adjustment.

ARM

Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap.

“A” Loan or “A” Paper

a credit rating where the FICO score is 660 or above. There have been no late mortgage payments within a 12-month period. This is the best credit rating to have when entering into a new loan.