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Ever wonder what those Real Estate Terms or Financial Terms meant?
Browse the Glossary for an in-depth explanation
Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Other
- Abandonment A disclaimer of ownership by the trustee or debtor in property deemed burdensome or inconsequential. Once property has been "abandoned," it is no longer the property of the estate, and creditors can seek to recover their money.
- Abstract of judgment,law The summary of a court judgment that creates a lien against a property when filed with the county recorder.
- 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.
- Accelerated cost recovery system A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
- Acceleration clause A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
- Accelerated depreciation A bookkeeping method that depreciates property faster in the early years of ownership.
- Acceptance The seller's written approval of a buyer's offer.
- Access Any means by which a person can enter property.
- Accessibility The degree to which a building or site allows access to people with disabilities.
- Account Agreement An agreement that you sign and which lists your rights and responsibilities and the bank's rights and responsibilities for the bank account.
- Accounting Method The method used by a business or individual to keep records. Most individuals and small businesses use the cash method, although businesses that maintain inventory are required to use the accrual method. See also "Accrual Method" or "Cash Method."
- Accounts Payable Money owed by a business for goods and services received.
- Accounts Receivable Money owed to a business by purchasers of goods and/or services.
- Accretion The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
- Accrual Method Business accounting in which you report income in the year you earned it and expenses in the year you incur them, rather than reporting income and expenses when you receive payment or when you pay the expenses. Under this method, if you built a deck and billed the client in December 1999, the amount you charged would be reported in 1999 as income even if you didn't get the payment until January 2000. If you own a business that maintains an inventory, you are required to use the accrual method.
- Accrue To come into possession or gather together an amount, often over a period of time
- Accrued Interest Interest which has already been earned but has not yet been paid
- Acknowledgment A written declaration affirming that a person acted voluntarily.
- Acquiring Financial Institution Merchants must maintain an account with an acquiring financial institution to receive credit for credit card transactions. Daily credit card totals are deposited into the merchant's account minus any fees.
- Acquisition Fee A fee charged by some leasing companies for originating the loan, just as mortgage lenders charge points as an origination fee. This fee is often not specified in a contract, but rolled into the capitalized cost when calculating monthly payments.
- Acre A measurement of land equal to 43,560 square feet.
- Acre foot The volume of material needed to cover an acre of land one foot deep.
- Act of God When used in insurance policies, an event caused by natural forces such as hail, rain, tornado, lightning, floods or earthquakes, which results in damage to property.
- Active Income Active income, such as wages, tips and profits from your business that you materially participate in, and portfolio income, such as interest and dividends. Generally, you cannot offset active income with passive losses. See also "Non-passive Income."
- Active solar system A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.
- Actual age The number of years a structure has been standing.
- Actual Cash Value The amount of money that a broker or dealer has invested in the purchase and repair of a used vehicle.
- Addendum An addition or change to a contract.
- Additional principal payment Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
- Additional Property Address of real estate that a person owns that is not being financed.
- Add-on interest The interest a borrower pays on the principal for the duration of the loan.
- Adjustable-rate mortgage (ARM) A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
- Adjusted Balance A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges.
- Adjusted Basis The amount you use to determine your profit or loss from a sale or exchange of property. To determine your adjusted basis for an asset, start with the amount you originally paid, add your cost of improvements and assessments, then subtract deductions you have taken, such as depreciation and depletion.
- Adjusted cost basis The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
- Adjustment period The amount of time between interest rate adjustments in an adjustable-rate mortgage.
- Administrator A person given authority to manage and distribute the estate of someone who died without leaving a will.
- Administrator's deed A legal document that an administrator of an estate uses to transfer property.
- Adverse possession The acquisition of title to property through possession without the owner's consent for a certain period of time.
- Adverse use The access and use of property without the owner's consent.
- Aeolian soil Soil that is composed of materials deposited by the wind.
- Affiant A person who makes a sworn statement.
- Affirmation A substitution for an oath granted to people based on religious reasons.
- Affinity Card A credit card (usually Visa or MasterCard) that has a promotion arrangement with an affiliated organization (often a charity or non-profit group). The logo of the group appears on the card and the group usually gets a percentage of the sales made on the card.
- A-frame design An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.
- Agency The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.
- Agency closing The process by which a lender uses a title company or other firm as an agent to complete a loan.
- Agent A person who acts on behalf of another. In real estate, an agent is a person who conducts transactions on behalf of sellers and sometimes buyers
- Agreed boundary A compromise boundary to which property owners agree in order to resolve a dispute.
- Agreement of sale A document in which a property's buyer and seller approve the price and other terms of the transfer of title.
- Air Miles One of the most popular rewards issued by airline-affiliated co-branded cards. Air miles are earned with every use of the card, and then transferred monthly to the cardholder's account with that airline.
- Alcove A recessed section of a room, such as a breakfast nook.
- Alienation clause A requirement that the borrower pay the mortgage in full upon transfer of the property.
- Alimony Monthly payments received by an ex-spouse. Payments must be received continuously for one year to be counted toward qualifying income for a loan.
- Alkali Mineral salt found in soil.
- Alkaline soil Soil that contains a higher concentration of mineral salt than natural acid.
- Alley A lane behind a row of buildings or between two rows of buildings.
- Allowances Money set aside by builders for amenities, such as driveways, landscaping, carpeting and fixtures, that are standard but have optional designs.
- Alternative Minimum Tax This tax primarily affects high-income taxpayers who shelter some of their income from tax through certain tax preference items or deductions. It is often referred to in tax publications as AMT and, if your income meets the limit, you have to recalculate your tax due based on the separate alternative minimum tax rates and tables.
- Alternative mortgage Any home loan that does not conform to a standard fixed-rate mortgage.
- Aluminum-clad windows Wooden windows with aluminum covering the exterior.
- Aluminum siding A metal covering that provides an alternative to paint for owners of wood homes.
- Amenities Desirable features of a neighborhood, housing development or condominium, such as nearby parks, playgrounds, shuffleboard courts, swimming pools, community centers and bocce courts..
- Amortization The process of gradually paying down the principal of the loan. As each payment toward principal is made, the mortgage amount is reduced or amortized by that amount. This is in contrast to an interest-only payment where the principal balance is never reduced. The normal amortization period for a mortgage in Canada is 25 years, but can be as short as 5 years.
- Amortization Schedule A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance.
- Amortization Table Mathematical formula for calculating a borrower's monthly payments, based on the amount borrowed, the interest rate and the term of the loan.
- Amortized Loan A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal.
- Amount Due at Lease Signing The total amount due before the consumer can take delivery of a leased vehicle. It can include any security deposit, title fee, capitalized cost reduction, monthly payments paid at signing and registration fees.
- Amount Financed The principal that is financed. It could include the cost of the purchase and other items rolled into the payments.
- Amperage The strength of an electrical current.
- Anchor bolt A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.
- Angels Private individuals with capital to invest in business enterprises
- Annual Any kind of plant that must be planted every year.
- Annual Fee A bank charge for use of a credit card levied each year, which can range from $15 to $300, billed directly to the customer's monthly statement. Many credit cards come without an annual fee.
- Annual mortgagor statement A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.
- Annual Percentage Rate (APR) A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.
- Annual Percentage Yield (APY) The percentage, required by Truth in Savings regulations, to be disclosed on interest-bearing deposit accounts that reflects the total interest to be earned based on an institution's compounding method, assuming funds remain in the account for a 365-day year.
- Annuity A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
- Anticipatory breach A communication that informs a party that the obligations of the original contract will not be fulfilled.
- Application A document that details a potential borrower's income, debt and other obligations to determine credit worthiness.
- Application fee The fee that a lender charges to process a loan application.
- Appraisal An opinion of the value of a property at a given point in time.
- Appraisal fee The fee that an appraiser charges to estimate the market value of the property.
- Appraisal report A detailed written report on the value of a property based on recent sales of comparable sites in the area.
- Appraised value An opinion of the current market value of a property.
- Appraiser A person qualified by education, training, and experience to estimate the value of real property and personal property.
- Appreciation An increase in the value of a home or other property..
- Approval An assessment made by a lender of a borrower's ability to pay for a home and a confirmation of the amount the borrower may obtain.
- Arbitration A method of resolving a dispute in which a third party renders a decision.
- Arbor An area shaded by trees, shrubs or vines on a latticework structure.
- Arch A curved structure that supports weight over an area, such as a doorway.
- Architect A licensed professional who designs homes, buildings and other structures.
- Architectural fees The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget.
- Arpent An area equal to about 0.845 acres, traditionally used in France, Quebec and Louisiana. Nowadays, hectares and acres are more commonly used measurements of area.
- As is Where is The buyer must examine the goods or property and buy at his or her own risk.
- Asbestos A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.
- As-is condition The purchase or sale of a property in its existing condition.
- Asking price A seller's initial price for a property.
- Assessed value A tax assessor's determination of the value of a home in order to calculate a tax base.
- Assessment The estimated value of a piece of real estate or a levy placed on property in addition to taxes.
- Assessment rolls A list of taxable property compiled by the assessor.
- Assets Items of value which include cash, real estate, securities and investments.
- Asset Case A bankruptcy proceeding in which there are non-exempt assets that might be available to pay the claims of creditors.
- Assignor A person who transfers rights and interests of a property.
- Assignment The transfer of a mortgage from one person to another
- Assumable mortgage A mortgage that can be transferred to another borrower.
- Assumption clause A provision that allows a buyer to take responsibility for the mortgage from a seller.
- Assumption fee A fee the lender charges to process new records for a buyer who assumes an existing loan.
- ATM Access Fee Fee charged in addition to the individual account fees for an account holder to gain access to the ATM system. Can be monthly, weekly, or annual fee. See also "Automated Teller Machine."
- ATM Alliance An alliance of banks and/or credit unions designed to avoid or minimize surcharges for non-bank customers at ATM machines. A customer at one bank in the alliance can use surcharge-free ATMs at all the banks in the alliance. See also "Automated Teller Machine."
- ATM Card Fee Fee charged in addition to individual account fees to obtain an ATM card – not a debit card fee. This may be an annual fee or a monthly fee. Also the fee may be per card or per account. For instance, if an account is held jointly, does the bank charge for the second person to hold a card or does it charge one fee for all the cards on an account. See also "Automated Teller Machine."
- ATM Surcharge Fee charged for a non-account holder to use bank-owned ATM. Example: You have an account at Bank A but use Bank B's ATM. Bank B will charge you a surcharge. Make sure to review what your bank charges you to use another bank's ATM system. You may have to pay a surcharge to Bank B plus a non-bank owned ATM charge to Bank A. See also "Automated Teller Machine."
- Automatic Payment An arrangement that authorizes periodic withdrawals to be made from a chequing or savings account to pay bills, usually regular monthly payments such as for rent or mortgages.
- Average Annual Yield The average yield per year over the life of the investment, assuming all principal and interest remain on deposit until maturity.
- Average Daily Balance This is the method by which most credit cards calculate your payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle. The average daily balance is then multiplied by a card's monthly periodic rate, which is calculated by dividing the annual percentage rate by 12.
- Average price The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.
- Average Tax Rate The real rate of taxes you pay after taking into account the various federal tax brackets. There are different tax rates for different levels of income; you pay lower rates on the first part of your income, more on the later earnings. As you pass each income level, the money above that level is taxed at the next higher rate. Therefore, your average tax rate is less than the top rate you pay on a portion of income.
- Avigation easement An easement over private property near an airport that limits the height of structures and trees.
- Awning windows Single-sash windows that tilt outward and up.
- Back fill Soil used to solidify the foundation of a structure.
- Back title letter A letter that a title insurance company gives to an lawyer who then examines the title for insurance purposes.
- Backup offer A secondary bid for a property that the seller will accept if the first offer fails.
- Backwater valve A valve in a sewer line that prevents sewage from flowing back into a house.
- Bad Debts Money you can't collect. Businesses are allowed to deduct bad debts under certain circumstances. If a bad debt is personal, it may be deducted in some cases as a short-term capital loss. Loans between family members generally are classified as non-business.
- Balance The amount of money in your account.
- Balance sheet A statement that shows the assets, liabilities and net worth of an individual.
- Balance Transfer The process of moving an unpaid credit card debt from one issuer to another. Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance transfer fees to discourage them from going out.
- Balance Transfer Fee Fee charged customers for transferring an outstanding balance from one card to another
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