ADJUSTABLE-RATE MORTGAGE (ARM) >> A mortgage loan where the interest rate is not fixed for the entire term of the loan, and can change during the life of the loan in line with movements of an index rate.

ADJUSTABLE-RATE RIDER >> A rider is an addition to a security instrument. The adjustable-rate rider outlines terms and conditions specific to an adjustable-rate loan. It must be recorded along with the security instrument at the county recorder’s office.

ADJUSTMENT CAP >> The adjustment cap limits the degree of interest rate changes during a specific period, during the life of the loan.

ALIMONY >> Periodic payments made under a divorce decree or a written separation agreement toward the support of a former spouse. Alimony may be taken as a deduction from adjusted gross income by the person who pays it, while the person who receives it must claim it as a taxable income.

ALTA >> An acronym for American Land Title Association. Commonly used in reference to a particular type of Title policy.

AMERICAN LAND TITLE ASSOCIATION (ALTA) >> An organization composed of title insurance companies, which has adopted certain insurance policy forms to standardize title insurance coverage on a national basis.

AMORTIZATION >> Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments. Amortization is the process of reducing principal and interest in equal installment payments at specific intervals over a set term. For example, a fully amortized loan payment is a portion of which will be applied to pay the accruing interest on the loan with the remainder being applied to principal. Over time, the interest portion decreases as the loan balance decreases and the amount applied to principal increases so that the loan is paid off in the specified term .