Mortgage Loan Glossary - 'A'

Use the alphabet letters below to navigate to the words in this glossary.


- A -


An area of land that is equivalent to 43,560 square feet or 4,840 square yards.
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Adjustable Mortgage Loan (AML)

Any mortgage that does not have a fixed interest rate and payments for the term of the loan. The interest rate changes periodically according to corresponding fluctuations in an index. (AMLs include Adjustable Rate Mortgages (ARM), Buy-downs, Growing Equity Mortgage (GEMS), Graduated Payment ARMs (GPARMs), and other mortgage types.) See also Adjustable Rate Mortgage.
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Adjustable Rate Mortgage (ARM)

With an Adjustable Rate Mortgage (ARM), you may experience a lower, fixed interest rate for a set period of time. ARM loan interest rates adjust according to the movement in an index. Rates typically adjust annually. When the interest rate changes the monthly payment also changes. Changes in payments are due to the fact that the interest rate on an ARM is not fixed for the entire mortgage term.

There are a variety of ARM loans. Hybrid ARMs have an initial fixed rate period in which the rate does not move with the movement of an index. Often the fixed-rate period will allow you to experience a lower, fixed interest rate. At the end of the fixed-rate period, the rate adjusts based on movement of the index for the remainder of the mortgage term.

Some ARMs have a reduced or discounted initial interest rate (start rate) for an initial period of time. This rate is not based upon the current index plus the margin (the "fully indexed rate"). While the rate is discounted, your interest rate and monthly payment will be lower than the index rate. Once the discounted period is over, the rate will adjust to the index rate plus the margin subject to the adjustment caps or limitations.

Citi has a choice of ARMs with a variety of initial fixed rate periods. We also offer an interest only ARM in which the monthly payment for a period of time only consists of the interest on your loan plus any applicable taxes and insurance. If only the interest payments are made, then at the end of the interest only period you will:

  • Owe the original amount borrowed.
  • Have a higher monthly payment even if the interest rate stays the same.
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Adjustment Date

Please see Change Date.
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Paying off debt in regular installments over a period of time.
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Amortization Schedule

A chart showing the repayment of a mortgage over the life of the loan, indicating the amount of each payment applied to interest and principal, and also the remaining balance after each payment is made.
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Annual Percentage Rate (APR)

An annual percentage rate (APR) shows the total cost of a mortgage (including closing costs, interest, fees, lender points) over its full term, expressed as a yearly rate.

APR is a good way to compare mortgages as it reflects the true cost of the loan.
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Anticipated Settlement Date

The estimated date to close the mortgage loan.
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A written report by a qualified appraiser estimating the value of a property.
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Appraised Value

An opinion of a property's fair market value, based on an appraiser's inspection and analysis of the property.
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A person qualified by education, training and experience to estimate the value of real property.
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An increase in the value of a property due to changes in market conditions or improvements to the property. Appreciation increases equity. The three main factors that affect the future value of a home are its location, condition, and the selling price of similar properties in the area.
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Assessed Value

The value of a property as determined by a public tax assessor for the purpose of taxation. Each county and state has its own formula to calculate property real estate taxes, but in general, the assessed value is multiplied by the local tax rate. The assessed value is not always equal to the fair market value.
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Assumable Mortgage

A mortgage that a buyer can assume or take over from the seller of the property. Sellers remain liable to the lender unless the lender agrees to release them.
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Automatic Draft/Electronic Draft

A scheduled electronic withdrawal made from a bank account.
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