Glossary of Terms

Click on a letter below to see the definitions for terms begining with that letter.

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A

Affiliated Business Arrangement Disclosure - When a settlement service provider refers business (related to a real estate settlement service involving a federally related mortgage loan) to another settlement service provider with whom it has either an affiliate relationship or a direct or beneficial ownership interest (of more than 1%), the referring provider must give the consumer, at or prior to the time of the referral, an Affiliated Business Arrangement Disclosure detailing the business arrangement between the two providers and an estimate of the second provider's charges. The referring party may not require the consumer to use the particular provider being referred, except when a lender refers a borrower to an attorney, credit reporting agency, or real estate appraiser who represents the lender's interest in the transaction.

Annual Percentage Rate (APR) - The total yearly (annual) cost of a loan. These costs include loan origination fees or points and the cost associated with securing a loan. Additional costs include appraisal and credit report fees as well as processing and document fees.

Apartment Style Housing - A form of multi-family housing where building entrances, stairways, halls, and other common elements are shared among several units. Garden apartments, stacked flats, and mid-rise and high-rise buildings are common examples.

Application Fee - The cost for reviewing and processing an application.

Appraisal - A professional's estimate and opinion of the market value of a property. An appraisal involves an analysis of local market data and the characteristics of a property to establish a professional opinion of its current market value.

Arrears - Debts that are overdue. Failure to have fulfilled contracted -financial obligations. See Repayment Plan.

Asbestos - A mineral fiber formerly used in building construction products as a fire retardant, insulation and strength. Many types of building products and insulation materials made before the 1970s contain asbestos. These products include pipe and furnace insulation materials; asbestos and cement shingles, siding, and roofing; millboard; resilient floor tiles, the backing on vinyl sheet flooring, and floor tile adhesives; soundproofing or decorative material; patching and joint compound; fireproof gloves and stove-top pads; and automobile brake pads and linings, clutch facings, and gaskets. The most dangerous asbestos fibers are too small to be visible. They can become airborne when asbestos-containing materials are disturbed or during improper removal. Once they are inhaled, the fibers can remain and accumulate in the lungs. Breathing high levels of asbestos fibers can lead to an increased risk of lung cancer, mesothelioma (a cancer of the chest and abdominal linings), and asbestosis (irreversible lung scarring that can be fatal). The risk of lung cancer and mesothelioma increases with the number of fibers inhaled. The Environmental Protection Agency recommends that when dealing with materials containing asbestos, whether it is to test, repair, or remove, you hire an asbestos professional to do the work for you. Improper handling of asbestos material can create more of a hazard than if it is left undisturbed.

Assumption - The transfer of the seller's existing mortgage to the buyer, typically requiring the buyer to purchase the seller's equity and obligations.

Attached - A one-family dwelling connected to two or more dwellings by common walls or floors. Attached houses can be side-by-side, such as "rowhouses," over-under, or back-to-back. Attached houses may be sold as fee simple or condominium properties.