What is Ad Valorem?

 Latin for "according to value." Used in connection with real state taxation. Ad valorem Taxes - Real estate taxes (property taxes) based on the county appraisers assessed value of the real property. These taxes are levied on a calendar basis (January 1st - December 31st) and paid in arrears (at the end of the tax year). They become a lien on January 1st each year. Taxes are payable on or after November 1st each year. If paid in November, December, January or February, the property owner receives a discount of 4%, 3%, 2% or 1% respectively. If paid on or after March 1st, the full amount must be paid. Taxes for the previous year become delinquent on April 1st.

Cash Out - A refinance for more than the balance of the current mortgage. The excess money taken out reduces the borrower’s equity.

Refinancing - The process of paying off one loan with the proceeds from a new loan secured by the same property.

Mortgage Loan - A loan for which real estate serves as collateral to provide for repayment in case of default.

Jumbo Loan - A mortgage with a principal balance that exceeds $417,000 the amount eligible for purchase by Fannie Mae and Freddie Mac. Jumbo loans generally carry a higher interest rate.

Home Equity Loan - An additional mortgage secured by the equity in the home. All funds for this loan are disbursed at closing. (In contrast, see Home Equity Line Of Credit).

Home Equity Line Of Credit - A revolving line of credit secured by the equity in the home. Unlike a Home Equity Loan, these funds may be drawn and repaid like a credit card.