Glossary

ACCELERATION CLAUSE: This provision is used in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. This usually happens when the borrower defaults on the loan or re-finances their existing financing.

ACCESSORY BUILDING: Often, this is a building separate from the main structure on a property used for a specific purpose, such as a workshop, storage shed or garage.

ACCRETION: The natural growth of a piece of land resulting from erosion of matter caused by the forces of nature.

ACRE: This is 43,560 square feet of measurement of an area.

ACTUAL AGE: This is considered the amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE.

ADJUSTMENT DATE: The actual date in which the interest rate changes on an adjustable rate mortgage.

AD VAL OREM TAX: The taxes assessed by the governing agency based on the value of the land and improvements.

ADDENDUM: This can be a supplement to any document and or contract that contains additional information pertinent to the subject. Appraisers and real estate agents use an addendum to further explain items for which there was inadequate space on the standard appraisal form or document.

ADJUSTABLE-RATE MORTGAGE (ARM): A mortgage where the interest rate varies based on a particular index, normally the prime lending rate, Treasury Bills, Libor Index, etc.

ADJUSTED BASIS: The value of an asset (property or otherwise) that includes the original price along with the addition of the value of any improvement, and less any applicable depreciation of such item.

ADJUSTED SALES PRICE: Using the estimate of a property's sales price and making adjustments to account for differences between it and another comparable property or properties.

AESTHETIC VALUE: This is an addition of value a property enjoys based on subjective criteria such as look, appeal or improvement.

AFFIRMATION:  This is a signed declaration that a certain set of facts are truthful.

AFFORDABILITY ANALYSIS: Most of the time a lender will use calculations to determine an individual's likelihood of being able to meet the financial obligations of a mortgage for a particular property, by taking into account the down payment, closing costs, credit history and on-going mortgage payments.

AGENT: This is a person or entity, usually a real estate agent, who has been appointed to act on behalf and represent another party for a particular transaction.

AMENITY: An amenity is a feature of a property that increases its value or desirability. Some items may include natural amenities such as location or views of oceans or mountains, or man-made amenities like swimming pools, parks or other recreation areas or facilities.

AMORTIZATION: A loan which is repaid through regular periodic payment, usually on a monthly basis.

AMORTIZATION SCHEDULE: This is a scheduled breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution(s) and interest fees.

AMORTIZATION TERM: The amount of time which an amortized loan is repaid. Most mortgages are commonly amortized over 15 or 30 years.

AMPERAGE: It is a measure of electric current describing the magnitude.

ANNUAL PERCENTAGE RATE (APR): It is the rate of annual interest charged on a loan and must be disclosed to the consumer upon purchase.

ANNUITY: Usually A sum of money paid at regular intervals on an annual basis.

APPLICATION: This is a form used to apply for a mortgage loan. This is a detailed form which indicates a potential borrower's income, debt, savings and other information used to determine their credit worthiness.

APPRAISAL: A validated and carefully documented opinion of value. The process is most commonly derived by using recent sales of comparable properties by a licensed, professional appraiser.

APPRAISAL REPORT: The purpose of the report is to convey the estimated value of the subject property and support that estimate with corroborating information. The end result of the appraisal process usually consists of one major, standardized form such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information.

APPRAISED VALUE: The estimated fair market value of a property prepared and detailed by a licensed, certified appraiser following accepted appraisal principals.

APPRAISER: The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property. An appraiser is an educated, certified professional with extensive knowledge of real estate markets, values and practices.

APPRECIATION: A natural rise in property value due to market forces (supply and demand).

ARMS LENGTH TRANSACTION:  This is any transaction in which the two parties are unconnected and have no overt common interests. This type of transaction often reflects the true market value of a property.

ASSESSED VALUE: This is the value of a property according to tax assessment established by a County.

ASSESSMENT: The levying of taxes by assigning a value to a property.

ASSESSMENT RATIO: A comparative relationship of a property's assessed value to its fair market value.

ASSESSOR:  Is the County who performs the assessment and assigns the value of real estate property for tax purposes.

ASSET: This can be any item of value, whether real estate or personal which a person owns.

ASSIGNMENT: When the transfer of ownership of a mortgage usually when the loan is sold to another company, pension plan and or financial institution.

ASSUMABLE MORTGAGE: When a mortgage can be taken over by the buyer when a home is sold.

ASSUMPTION: A buyer takes over, or "assumes" the sellers existing mortgage. The lender usually charges points for this, along with full documentation from the buyer.

ATTACHED HOUSING (OHANA):  Any number of houses or other dwellings which are physically attached to one another, but are occupied by a number of family members and/or different people.