Archives: Glossary Terms

The charge payable under the terms of a loan agreement to a lender by a borrower if the outstanding principal balance of the loan is paid off prior to its maturity.

The sum that may be saved by a borrower by paying off a debt prior to the date due.

The amount of value in terms of money at which property is offered for sale or is exchanged for at a sale.

Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. The general rule provides that a vendor may not in combination with another vendor agree to set a certain price thereby creating a fixed price within a certain market. A business acting on its own and not in concert with another may use legitimate efforts to obtain the best price they can, including their ability to raise prices to the detriment of the general public. Also, conformity of prices within a given product is not illegal unless such conformity was created by a combination of vendors agreeing on a set price. For example, where competitors agree to sell their goods or services at a specified price, minimum price or maximum price and they receive profits from such an agreement, they are in violation of price fixing. Additionally, setting a price to be charged only within a certain area in order to get rid of competition or to create a monopoly is generally illegal under most state laws. A majority of states have also enacted a “Below-Sales-Cost” law wherein businesses may not sell goods below cost if they do so with anti-competitive intent or effect. See Antitrust laws.

A relative position on the scale of prices as determined by a comparison of prices of labor, materials, capital, etc. found at one time with prices at other times.

A loan whose payment is adjusted according to the rate of inflation. The payments are generally quite low, typically 3 to 5% annually of the debt. This type of mortgage is not commonly used in the U.S.

In Latin meaning “at first sight” and refers to a fact which is presumed to be true or legally sufficient to establish that fact unless it is rebutted or disproved by evidence to the contrary.

An identification of a mortgage or trust deed and a note that has the earliest recording date for a specific property or a loan of first priority.

A lease, between the owner and a tenant, whose interest all or in part has been sublet.

The mortgage market made up of lenders such as commercial banks, savings and loan associations and mutual savings banks in which loans are originated.