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| Adjustable Rate | An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.
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| Amortization | A repayment method in which the amount you borrow is repaid gradually through regular monthly payments of principal and interest. During the first few years, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal. |
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| Annual Membership | An amount that may be charged annually for having a line of credit available. Often charged regardless of whether or not you use the line. Also referred to as a "participation fee". |
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| Annual Percentage Rate | The cost of credit on a yearly basis, expressed as a percentage. Required to be disclosed by the lender under the federal Truth in Lending Act, Regulation Z. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Does not include title insurance, appraisal, and credit report. |
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| Application | An initial statement of personal and financial information that is required to approve your loan. |
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| Application Fee | Fees that are paid upon application. An application fee may frequently include charges for property appraisal ($200-$400) and a credit report ($30-50). |
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| Appraisal | A third-party opinion of market value as of a specific date. Required by most lenders to obtain a loan. |
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| Assumption of Mortgage | The agreement of a purchaser to become primarily liable for the payments on a mortgage loan. Unless otherwise specified by the lender, the seller may remain secondarily liable for payments. |
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