Debt Consolidation Glossary of Terms

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Glossary - A

adjustable-rate mortgage (ARM)
A mortgage loan where the interest rate is adjusted based on a standard rate index.

adjustment period
The time that elapses between changes in as interest rate. Applies to an an adjustable-rate mortgage.

amortization
The payment of a debt in installments over a period of time, during which principal amount and interest are paid off.

amortization term
The time it takes to repay (amortize) a mortgage loan, usually expressed in months. A 30-year fixed-rate mortgage, for example, has an amortization term of 360 months.

annual percentage rate (APR)
A rate of interest over a period of one year that includes fees and costs paid to acquire the loan. By law, lenders are required to disclose an APR. In mortgages, APR is the interest rate of a mortgage including other costs such as the interest, mortgage insurance, and certain closing costs.

appraisal
A written estimate of market value of a property, often in comparison with other properties.

appraiser
A person qualified by education, training and experience to estimate the value of property.

appreciation
An increase in the value of a property.

assets
Personal possessions of value, including cash, real estate and investments.

assumable mortgage
A home loan that can be transferred to another borrower.

assumption clause
A provision in a mortgage contract that allows a buyer to take responsibility for the loan from the seller.

assumption fee
A lender's fee charged when a buyer takes responsibility for a mortgage (see assumption clause) from the seller.