Glossary
AC Associates
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Amortization Schedule- A month-by-month breakdown of principle and interest to be paid on a
note, as well as the balance after payment is made.
Annuitant- The person receiving payments from an annuity.
Annuity- Income stream paid over time by an insurance company.
Assumed Name Certificate- A name that a contract buyer registers with his/her local
courthouse that allows him/her to do business using that name.
Balloon Payment- A lump sum payment that pays off a note in full.
Beneficiary- A person who is designated to receive a payment or payments.
Contract Buyer- An individual who buys and sells income streams for profit.
Credit Score- a number that is assigned to an individual's credit report that rates their likelihood
of repaying a debt.
Collateral- Something that is used to secure a loan or note.
Debt Ratio- An individual's total debt to relation to their income.
Discount- Purchasing a note for less than the face value.
Estopped Letter- A letter that is sent out to the payer of a mortgage note prior to funding the
transaction. This letter asks the payer to verify the balance, interest rate on the note, payer's work
numbers etc..
Equity- The difference between what a property is worth and how much is owed on it.
First Position Note- Refers to a note that takes precedence over all other liens and notes. AC
Associates only purchases first lien position notes.
Hypothecate- The process of buying a property with borrowed funds, using that very property to
secure (collateralize) the loan.
Income Stream- Any kind of note that is paid out over time: Same as "payment stream".
Loan to Value- Referred to as LTV. This is the ratio of the loan amount to the value of the property.
Mortgagee- The person or investor who receives the payments from a mortgage.
Mortgagor- The person who owes money (makes payment) on a mortgage.
Owner Financing (Seller Financing)- When the seller of a property or business finances the sale
of that home or business.
Paper- A slang term for notes.
Partial- The purchase of a portion of an income stream's remaining payments, or the purchase of a
portion of a specific payment or combination thereof.
Retail Quote- A quote that is net to the contract buyer. Neither the contract buyer nor note seller
is responsible for any closing cost or processing fess for that transaction. All quotes by AC Associates
are done in this manner unless otherwise requested by the contract buyer.
Seasoning- Refers to the length of time a mortgage note or business note has been in place and
paid on.
Second Position Note- Refers to a mortgage note that is "behind" another note on the same
property.
Sole Proprietorship- An individual operating a business as a business entity.
Time Value of money- A financial concept that addresses the way the value of money changes
over a period of time. It determines how much a future payment is worth in today's dollars.
Title Insurance- Insures that a piece of property is free and clear of any liens.
UCC-1- Uniform Commercial Code Form One- This occurs when a note holder of a mortgage is
still making payments on another note (the underlying note). For example: If a person sells a
property for $100,000 and takes back a note but still owes a mortgage of $20,000, then this
balance is the "underlying balance".
Wholesale Quote- A quote offered to a contract buyer from an investor that does not include the
cost of closing the transaction: such ad an appraisal and title insurance.