These are to assist the reader who may be unfamiliar with USA terminology.  New Zealand use can vary in some cases, but often these can be relatively easily understood. 203(b): FHA’s single family program which provides mortgage insurance to lenders to protect against the borrower defaulting; 203(b) is used to finance the purchase of new or existing one to four family housing; 203(b) insured loans are known for requiring a low down payment, flexible qualifying guidelines, limited fees, and a limit on maximum loan amount. 203(k): this FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan. A “A” Loan or “A” Paper: a credit rating where the FICO score is 660 or above.  There have been no late mortgage payments within a 12-month period.  This is the best credit rating to have when entering into a new loan. ARM: Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap. Abstract of Title: documents recording the ownership of property throughout time. Acceleration: the right of the lender to demand payment on the outstanding balance of a loan. Acceptance: the written approval of the buyer’s offer by the seller. Additional Principal Payment: money paid to the lender in addition to the established payment amount used directly against the loan principal to shorten the length of the loan. Adjustable-Rate Mortgage (ARM): a mortgage loan that does not have a fixed interest rate.  During the life of the loan, the interest rate will change based on the index rate.  Also referred to as adjustable mortgage loans (AMLs) or variable-rate mortgages (VRMs). Adjustment Date: the actual date that the interest rate is changed for an ARM. Adjustment Index: the published market index used to calculate the interest rate of an ARM at the time of origination or adjustment. Adjustment Interval: the time between the interest rate change and the monthly payment for an ARM.  The interval is usually every one, three or five years depending on the index. Affidavit: a signed, sworn statement made by the buyer or seller regarding the truth of the information provided. Amenity: a feature of the home or property that serves as a benefit … Continue reading Glossary Of USA Real Estate Terms