A tax-deferred retirement savings account that allows employees to contribute a fixed amount of their income until withdrawn.
A retirement plan made available by a company to its employees, featuring tax-deferred contributions and growth. The plan may also include matching contributions by the company.
A plastic card you use to access the money in your account, in this case your HELOC.
Something extra you can purchase to enhance your vehicle.
A method of calculating interest which is obtained by using the ending balance from the last billing period less all payments made during the current period.
Adjustable rate mortgages (ARMs)
A mortgage in which the rate of interest adjusts based on an independently set index.
A fee imposed to cover the administrative portion of settling a loan.
A co-branded credit card issued by a credit card marketer on behalf of a membership group which offers its members incentives to use the card.
One of many calculators on the Internet which estimates how much loan a person can afford to borrow.
A fee imposed by the real estate agent for providing the buyer with realty services.
A timetable for the gradual repayment of a mortgage loan.
A flat fee charged by the credit card company which allows a borrower to use their card.
Annual Percentage Rate (APR)
The APR includes both your interest and any additional costs or prepaid finance charges you might pay. It represents the total cost of credit on a yearly basis after all charges are taken into consideration.
The interest rate reflecting the total yearly cost of the interest on a loan, expressed as a percentage rate. It includes interest as well as other charges. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing credit cards.
The Annual Percentage Rate refers to the actual cost of a loan including the rate, points, insurance, and any other related fees (not including credit reports or appraisal charges.)
An annual charge imposed by the lender for maintaining a loan.
A fee charged by the lender to cover the origination cost, or any upfront fees, of the loan.
The estimate of a property's value performed by an appraiser on a specific date.
The fee an appraiser charges to assess the property value of a property.
The increase in value of a home over time.
Automated Teller Machine (ATM)
An electronic banking machine that dispenses cash, accepts deposits, and performs other services.
Money borrowed from a financial institution to help you pay for your purchase of an automobile.
Average Daily Balance (ADB)
A method of calculating interest which is obtained by taking the daily balance of each day in a billing period, less any payments received, divided by the number of days in the period.
The Fair and Accurate Credit Transactions Act passed by Congress in 2003, which entitles a consumer to receive a free copy of their credit report annually from the three main credit reporting agencies.
The Fair Credit Reporting Act which took effect in 1971 requires Consumer Reporting Agencies to furnish correct and complete information to businesses wanting to evaluate a borrower's credit.
Fair Isaac Corporation® (FICO®)
The company that developed the FICO® credit score, which is used to judge a borrower's creditworthiness.
Fannie Mae (FNMA)
The Federal National Mortgage Association is a public company that operates under a federal charter. As the nation's largest source of financing for home mortgages, Fannie Mae does not lend money directly to consumers, but instead works to ensure that mortgage funds are available and affordable, by purchasing mortgage loans from institutions that lend directly to consumers.
Federal Deposit Insurance Corporation (FDIC)
A federal agency that insures deposits in member financial institutions up to $100,000 per depositor and $250,000 for IRAs.
Federal Housing Administration (FHA)
The Federal Housing Administration is a United States government agency which insures loans made by approved lenders to qualified borrowers, in accordance with its regulations.
Federal Trade Commission (FTC)
Independent agency of the U.S. government, established in 1915, charged with keeping American business competition fair and working in the consumer's best interest.
See service fees.
A credit score developed by the Fair Issac Corporation used to determine a borrower's level of risk.
A general term that refers to a method by which you borrow money in order to pay for something, such as a car.
The amount a borrower is charged expressed as a percentage of the APR for carrying a month-to-month balance.
Interest or other charges paid by a borrower on a revolving mortgage loan.
Insurance covering a borrower's home from fire damage.
Fixed interest rate
An interest rate that remains the same during the duration of the term (e.g. 12-month fixed IRA).
Fixed rate (APR)
A set annual percentage rate that doesn't fluctuate like a variable rate.
Fixed rate loan
A fixed interest rate loan, or installment loan, that does not change or adjust during the course of the loan.
A fixed interest rate mortgage which doesn't change or adjust during the course of the loan.
A set management fee which doesn't change or fluctuate.
Insurance coverage for homes that are in known flood areas.
The Federal Home Loan Mortgage Corporation, also known as Freddie Mac, is a congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Frequent flyer miles
Flight miles that are rewarded by an airline to customers for flying with them.
In general, the generation of people who were born in the 1960s and 1970s.
In general, the generation of people who were born in the 1980s and 1990s.
A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Mortgages that are not government loans are classified as conventional loans.
The period of time a borrower is allowed to make a credit card payment without incurring any interest charges.
A crime where a thief obtains key personal information to impersonate someone else.
A published cost of money measurement that lenders use to calculate the rate on a mortgage (e.g., T-bill, LIBOR, CMT.)
Individual retirement account (IRA)
An account for the purpose of saving up for retirement that provides tax-advantages to the account-holder. The two most common types are the Traditional IRA and the Roth IRA.
Individual retirement annuity
An IRA set up with a life insurance company through the purchase of a special annuity contract.
A general rise in prices measured against a standard level of purchasing power.
An IRA acquired by the non-spousal beneficiary of a deceased IRA owner.
Coverage against unforeseen property losses in exchange for premiums paid.
A global communication network that allows computers worldwide to connect and exchange information.
The amount charged to borrow money.
The monthly payment amount owed to a lender which covers the interest-only portion of the amount borrowed. Your equity does not increase with this type of loan since you are not paying down the principal.
(Auto Loan) - The cost the lender charges the borrower for using their money; expressed as a percentage.
(Credit) - The yearly price charged by a lender to a borrower in order for the borrower to obtain a loan. This is usually expressed as a percentage of the total amount loaned.
(Home Equity) - A rate that is charged or paid for the exchange to borrow money.
The percent charged or paid for the use of money.
Internal Revenue Code
The main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax, payroll taxes, gift taxes, estate taxes and statutory excise taxes.
A failure to deliver a payment from the borrower before the payment due date.
Late payment fee
A penalty fee that is imposed when a borrower's payment is received late.
A person whose profession involves giving legal advice.
A contract between a lessor and a lessee for the use of an auto or other property, subject to stated terms and limitations, for a specified period and at a specified payment. With a lease, you do not own the vehicle.
An agreement which specifies the terms for occupying a property.
The optional purchase of the vehicle when your lease term has ended.
An agreement which allows a borrower to purchase a property which is being leased from the lender.
A person or company which lends money to borrowers.
A legal claim against a property that must be paid off when the property is sold before the title transfer can occur.
The maximum interest rate on an adjustable rate mortgage that may be charged at any time over the life of the mortgage.
Loan-to-value (LTV) ratio
The amount of a mortgage loan divided by the appraised value or sales price.
The person at a lending institution who solicits loans, acts as the representative for the lending institution, and represents the borrower at the lending institution.
A quoted rate guaranteed by a lender for a specified period of time even if rates go up or down during the lock-in period.
London Interbank Offering Rate (LIBOR)
An index used to determine interest rate changes for certain ARM plans, based on the average interest rate at which international banks lend to or borrow funds.
A special rate which may be lower than the national average and for a specified period of time.
Low introductory rate
A special promotional rate that creditors charge on purchases or balance transfers for opening a new account.
The difference between the interest rate and the index on a loan.
The difference between the interest rate and the index on an adjustable rate mortgage.
The price a property would be worth on the open market.
The maximum amount of miles that you are allocated under a lease before incurring penalties.
The amount of points rewarded by an airline for traveling a specified flight segment.
See minimum payment due.
Minimum payment due
The minimum payment amount which must be received by the due date in order to avoid a late fee from the creditor.
Modified Adjusted Gross Income (MAGI)
The amount of income that determines how much of an individual's IRA contribution is deductible. It is found by taking the individual's adjusted gross income and adding back certain items such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
A lien on real estate to secure repayment of a loan.
A legal document between a lender and a borrower drafted for the purpose of repaying a loan.
An intermediary between a borrower and a lender.
A lender who specializes in mortgages.
The monthly payment amount owed to a lender which covers the principal and interest on a property.
Multiple Listing Service (MLS)
A nationwide database of properties available for sale used by real estate agents.
An option for employers to offer their employees who want to save toward their retirement. There usually is no matching on the part of the employer.
A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on the employee's behalf, allowing the employee to receive benefits upon retirement.
A fee assessed by the creditor for breaching the terms and conditions of your agreement.
An inspection required by a lending or government institution prior to lending money to a borrower to insure that a property is free from structural pest damage and decay.
An upfront fee that a lender may charge a borrower for originating a loan. One point is equal to one percent of the loan amount.
A collection of investments all owned by the same individual or organization.
A confirmation stating the amount a lender is willing to give to a borrower after an application has been filled out.
A penalty for paying a loan early before its due date.
When you are told by a financial institution how much of a loan you will probably be able to receive based on their cursory look at your financial information.
A lender's opinion of how much a borrower may qualify for without filling out an application.
Pre-set spending limit
The maximum dollar amount to which a borrower has access through a line of credit.
The ending balance from a borrower's previous statement and starting balance for the current statement.
The rate of interest publicly announced periodically by a lender. It is based on various factors, including banks' costs and desired return, and is it used as a reference point for pricing some loans.
The amount of money owed on an outstanding balance excluding interest.
Principal and interest (P & I)
The amount of a home equity loan payment including the principal and the interest
The actual mortgage amount and interest paid back to the lender.
Principal, Interest, Taxes and Insurance (PITI)
A term used by lenders or brokers to provide a total monthly payment which includes Principal, Interest, Taxes, and Insurance.
Private Mortgage Insurance (PMI)
Insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults on a mortgage loan.
A fee charged by the lender for the work required to process a loan.
The act of keeping a property presentable and livable.
The tax paid on a property based on its assessed value.
A person licensed to sell or purchase a property on behalf of the seller or borrower.
A member of the National Association of Realtors.
A fee that is charged as part of the closing cost to record a home sale as a matter of public record.
A debt obligation which appears month-to-month until the balance is paid in full.
To replace a loan with a more favorable one.
Replacing an older loan with a newer one.
Regular cycle ADB
A method of calculating interest which is obtained by taking the daily balance on each day of that month's billing cycle, less any payments received, divided by the number of days in that billing cycle.
A product offered by banks in which you get special discounts and incentives if you have several accounts with the same bank. Generally, the checking account product serves as the anchor account.
The amount of principal left unpaid on a mortgage loan.
An incentive in the form of points awarded to the borrower for using credit which can be exchanged for merchandise or rebates.
Credit card programs issued by creditors which offer reward points or cash-back incentives to borrowers for making purchases using their card.
Debt in which your monthly payment fluctuates based on how much you spend or pay off each month.
A tax-deferred retirement account where the contributions are not tax deductible. There is also no tax on the withdrawals as long as the taxpayer is over 59 1/2 and the account has been open for five years.
Rural Housing Service (RHS)
An agency of the U.S. Department of Agriculture that provides financing to farmers and qualified borrowers who buy property in rural areas and are unable to obtain loans elsewhere.
The amount a borrower can save by writing off the interest on a mortgage loan.
See tax savings.
A special introductory rate on an adjustable rate mortgage which is below current market rates to entice borrowers.
A monetary exchange made from one account to another by phone.
The period of time that you have to pay off a loan.
The deed to a property.
A company that assures that the title to the property is clear and free from liens.
The review of a property's title by the title company against public records.
Insurance which protects a lender or buyer against property disputes.
An Individual Retirement Account where the income generated is tax-deferred until withdrawn. Your original contribution may or may not be tax deductible, depending upon your specific circumstances.
An amount charged in addition to the interest rate for each type of transaction a borrower makes.
(Home Equity) - A fee charged each time you draw on your credit line.
See service fee.
Treasury bill (T-bill)
Securities auctioned by the U.S. Government to help pay off its debt obligations.
Two-cycle Average Daily Balance (ADB)
A method of calculating interest which is obtained by taking the daily balance on each day of the previous two month's billing cycle, less any payments received, divided by the number of days in that billing cycle.
An adjustable rate that fluctuates with the movement of some index or the prime rate.
An interest rate that may change periodically, related to an index for the life of the loan.
An interest rate that may fluctuate during the term of the deposit account. Sometimes the rate changes based on changes in an index rate, such as the prime rate or other prescribed criteria. Sometimes the bank changes the rate at its discretion or internal indices.
Veterans Administration (VA)
The Veterans Administration (VA) is a government agency responsible for administering benefits to veterans, their families, and survivors.
A tour of a home which can be viewed on the Internet.