Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
Abstract of title
A written history of all the transactions that bear on the title to a specific piece of land. An abstract of title covers the time from when the property was first sold to the present. Used by the title company to produce a title binder.
An area of land that is 43,560 square feet.
Adjustable Rate Mortgage, or ARM
Mortgage in which the rate of interest is adjusted based on a standard rate index. Most ARMs have caps on how much the interest rate may increase.
Alternative mortgage products
7/23 and 5/25 mortgages with a one-time rate adjustment after seven years and five years, respectively. Also known as a hybrid mortgage or two-step mortgage.
A timetable for the gradual repayment of a mortgage loan. An amortization schedule indicates the amount of each payment applied to interest and principal, and also the remaining balance after each payment is made.
The amount of time required to amortize (repay) a mortgage loan. The amortization term is usually expressed in months. A 30-year fixed-rate mortgage, for example, has an amortization term of 360 months.
Annual Percentage Rate (APR)
A standardized method of calculating the cost of a mortgage, stated as a yearly rate which includes such items as interest, mortgage insurance, and certain points or credit costs.
A written report by a qualified appraiser estimating the value of a property.
An opinion of a property's fair market value, based on an appraiser's inspection and analysis of the property.