Glossary [ INDEX: A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | Y | Z ] absolute fee simple title (fee simple) A title that is unqualified; the best title one can obtain; conveys the highest bundle of rights. abstract A condensed history of the title to a property, consisting of a summary of the original grant and all subsequent conveyances and encumbrances relating to the particular parcel of real estate. acceleration The clause in a mortgage or trust deed that stipulates the entire debt is due immediately, if the mortgagor defaults under the terms of the contract. acknowledgment A notarization on a legal document attesting to the validity of the signatures affixed hereto. acquisition cost Under FHA, the purchase price or appraised value plus the estimated closing costs. actual notice In a real estate transaction, the verbal or written communication of facts pertinent to the transaction, i.e., the physical condition of the property. add-on rate Method of computing interest whereby interest is charged on the entire principal amount for the specified term, regardless of any periodic repayments of principal that are made. adjustable-rate mortgage (ARM) A variable-interest-rate loan. adjusted book basis Purchase price of a property plus any capital improvements minus accrued depreciation, if any, to the date of the sale. administered price system FNMA securities purchasing procedure where required yields are adjusted daily to reflect financial market factors. all-inclusive encumbrance See wraparound encumbrance. allodial system Land ownership free and clear of any rent or service due the government. ALTA policy American Land Title Association title insurance policy; the most comprehensive form. amortization The systematic repayment of a loan through periodic installments of principal and interest over the entire term of the loan agreement. annual percentage rate (APR) The effective interest rate. annuity A series of income payments or receipts over a period of years. appraisal An estimate of the value of a property based upon comparison of real estate prices and the market for real estate. assessed value A property's adjusted actual market value to establish property taxes. assets All things of value, encumbered or not, owned by a person, corporation or other entity. assignment The transfer of an interest in a bond, mortgage, lease or other instrument, in writing, by the assignor to the assignee. assumed Buying a property and taking over or assuming the responsibility for the existing mortgage. auction Selling property to the highest bidder. avulsion A sudden separation of land caused by flooding, earthquake or other physical disruption; affects the fixity of real estate. [ Back to Index ] baby-boomers Name given babies born after World War II, now a significant bubble in our population. balanced trust See combination trust. balloon payment The final payment of a partially amortized loan that is considerably larger than the required periodic payments. banker's rule Using a 360-day year for prorating. bankrupt No longer able to pay debts. basis points There are 100 basis points in one percent; thus, 50 basis points equal one-half percent.

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