A
Amortization: The process of gradually paying off a debt through regular installments over a set period.
Adjustable Rate Mortgage (ARM): A home loan with an interest rate that can fluctuate based on market conditions.
Annual Percentage Rate (APR): The total cost of borrowing, including interest and fees, expressed as an annual percentage.
Appraisal: An assessment of a property's value conducted by a professional appraiser.
Assumable Mortgage: A mortgage that can be transferred from the seller to the buyer when a property is sold.
Automated Underwriting System (AUS): A computerized tool used by lenders to assess loan applications and determine eligibility.
Accrued Interest: The interest that has accumulated on a loan but has not yet been paid.
Assets: Valuable items owned by an individual or entity, such as real estate, investments, or cash.
Annual Escrow Statement: A report from the lender detailing payments made into an escrow account for property taxes and insurance.
Adjustable Rate: An interest rate that can change based on market conditions.
Amortization Schedule: A table showing how each loan payment is divided between principal and interest.
Assignment: The transfer of a mortgage from one lender to another.
Acceleration Clause: A provision in a loan agreement allowing the lender to demand full repayment if certain conditions are not met.
Agreement of Sale: A legal contract between a buyer and seller outlining terms of a property sale.
Application Fee: A fee charged by a lender to process a loan application.
Assessed Value: The value of a property determined by a government tax assessor for calculating property taxes.
Assumption: Taking over an existing mortgage loan, often when buying a property from the current owner.
Availability: The credit or funds accessible to a borrower.
Average Daily Balance: The average balance of a credit card or loan account over a billing cycle, used to calculate interest.
Adjustable Rate Note: A legal document detailing terms of an adjustable rate mortgage.
Amortization Term: The period over which a loan will be repaid, typically in months or years.
Annual Fee: A yearly fee charged by some credit card issuers for card use.
Authorization: Granting permission for a transaction or action, like a credit card purchase.
Automated Clearing House (ACH): A network facilitating electronic funds transfers between banks.
Available Credit: The unused credit on a credit card or line of credit.
B
Balloon Mortgage: A mortgage loan that requires a large, lump-sum payment at the end of the loan term.
Bankruptcy: A legal process in which individuals or businesses seek relief from their debts and financial obligations.
Bridge Loan: A short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing property.
Borrower: An individual or entity that receives funds from a lender with the agreement to repay the loan.
Buydown: A payment made by the borrower to the lender in order to lower the interest rate on a mortgage loan.
Bad Credit: A low credit score or a history of late payments and defaults, which can make it difficult to obtain credit or loans.
Balance Transfer: The process of transferring an outstanding balance from one credit card to another, usually to take advantage of a lower interest rate.
Billing Cycle: The period of time between credit card statements, during which purchases and payments are recorded.
Broker: A person or organization that acts as an intermediary between borrowers and lenders, assisting with the loan application and negotiation process.
Business Credit: Credit extended to businesses rather than individuals, typically used to fund business operations and investments.
Back-End Ratio: A measure of a borrower's total monthly debt payments, including housing expenses, compared to their gross monthly income.
Balloon Payment: A large, lump-sum payment that is due at the end of a loan term, often associated with balloon mortgages.
Bank Statement: A document provided by a bank that shows the transactions and balances in a bank account over a specific period of time.
Biweekly Mortgage: A mortgage loan that requires payments to be made every two weeks instead of once a month, resulting in faster loan repayment.
Borrowing Capacity: The maximum amount of money that a borrower can borrow based on their income, creditworthiness, and other factors.
Business Line of Credit: A revolving line of credit that is extended to a business, allowing them to borrow funds as needed up to a predetermined limit.
Balance Sheet: A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.
Bankruptcy Discharge: The legal release of a borrower from the obligation to repay certain debts following a successful bankruptcy proceeding.
Basis Point: A unit of measurement used to describe the percentage change in interest rates or yields on financial instruments.
Billing Statement: A document sent by a creditor to a borrower that details the amount owed, minimum payment due, and other account information.
Business Credit Score: A numerical representation of a business's creditworthiness, based on factors such as payment history, credit utilization, and public records.
Balloon Note: A legal document that outlines the terms and conditions of a balloon mortgage, including the balloon payment amount and due date.
Bonus: Additional compensation or income received by an employee, often based on performance or company profitability.
Bridge Financing: Short-term financing that is used to cover a temporary funding gap, often used in real estate transactions.
Business Loan: A loan provided to a business for the purpose of funding operations, expansions, or other business-related expenses.
C
Cash-Out Refinance: A mortgage refinance in which the borrower receives a new loan for more than the amount owed on the existing mortgage, with the difference being paid out to the borrower in cash.
Collateral: An asset that is used to secure a loan, providing the lender with a form of repayment if the borrower defaults on the loan.
Co-Signer: A person who signs a loan agreement alongside the primary borrower, agreeing to take responsibility for the loan if the borrower fails to repay it.
Credit Report: A detailed record of an individual's credit history, including their borrowing and payment habits, used by lenders to assess creditworthiness.
Credit Score: A numerical representation of an individual's creditworthiness, based on their credit history and other factors such as payment history, credit utilization, and length of credit history.
Closing Costs: The fees and expenses that must be paid by the buyer and/or seller at the closing of a real estate transaction, including fees for appraisals, inspections, and title insurance.
Conventional Mortgage: A mortgage loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).
Credit Limit: The maximum amount of credit that a lender is willing to extend to a borrower, based on factors such as income, credit history, and creditworthiness.
Credit Utilization: The percentage of available credit that a borrower is currently using, calculated by dividing the total credit balances by the total credit limits.
Collateralized Debt Obligation (CDO): A type of investment vehicle that pools together a collection of debt instruments, such as mortgages, and sells shares in the pool to investors.
Conforming Loan: A mortgage loan that meets the guidelines set by government-sponsored enterprises (GSEs), such as Fannie Mae and Freddie Mac, allowing them to be sold on the secondary market.
Credit Bureau: An organization that collects and maintains credit information on individuals and businesses, providing credit reports and scores to lenders and other authorized parties.
Credit History: A record of an individual's borrowing and payment activities, including credit accounts, loans, and payment history, used to assess creditworthiness.
Credit Card: A payment card that allows the cardholder to borrow funds from a financial institution up to a predetermined credit limit, with interest charged on any outstanding balances.
Creditworthiness: The assessment of an individual's ability to repay debts based on factors such as credit history, income, and financial stability.
Counteroffer: A new offer made by the seller or buyer in response to an original offer, typically made during negotiations in a real estate transaction.
Cash Advance: A short-term loan provided by a credit card issuer, allowing the cardholder to withdraw cash from an ATM or receive cash equivalent to their credit limit.
Credit Counseling: A service provided by nonprofit organizations to help individuals manage their debts, create budgets, and improve their overall financial situation.
Credit Freeze: A security measure that restricts access to an individual's credit report, preventing new credit accounts from being opened without the individual's consent.
Certificate of Deposit (CD): A time deposit offered by banks and other financial institutions that pays a fixed interest rate over a specified period of time.
Credit Card Debt: The amount of money owed on a credit card, including any unpaid balances, interest charges, and fees.
Cash Flow: The movement of money into and out of a business or personal financial account, often used to assess financial health and stability.
Closing Disclosure: A document provided to the borrower by the lender before closing a mortgage loan, outlining the final terms and costs of the loan.
Credit Monitoring: The ongoing monitoring of an individual's credit report and score for changes or suspicious activity, often provided by credit bureaus or third-party services.
Credit Repair: The process of improving an individual's creditworthiness by addressing and resolving negative items on their credit report, such as errors or delinquencies.
D
Debt-to-Income Ratio: A ratio that compares a borrower's monthly debt payments to their gross monthly income, used by lenders to assess the borrower's ability to manage additional debt.
Down Payment: The initial payment made by a buyer toward the purchase of a property, typically expressed as a percentage of the total purchase price.
Default: The failure to fulfill the obligations of a loan or credit agreement, such as making timely payments, resulting in negative consequences such as late fees, penalties, and potential legal action.
Delinquency: The failure to make timely payments on a loan or credit obligation, typically defined as being 30 days or more past due.
Disbursement: The release of funds from a lender or financial institution to a borrower or recipient, typically for the purpose of paying off a loan or completing a transaction.
Debt Consolidation: The process of combining multiple debts into a single loan or credit account, often with the goal of obtaining a lower interest rate or simplifying repayment.
Deed: A legal document that transfers ownership of a property from one party to another, typically used in real estate transactions.
Debt Management Plan (DMP): A program offered by credit counseling agencies to help individuals repay their debts by negotiating lower interest rates and monthly payments with creditors.
Direct Debit: An automated payment method that allows a lender or service provider to withdraw funds directly from a borrower's bank account on a predetermined schedule.
Debt Snowball: A debt repayment strategy in which the borrower focuses on paying off the smallest debts first, while making minimum payments on larger debts, with the goal of building momentum and motivation.
Discharge: The release or forgiveness of a borrower's obligation to repay a debt, typically granted through bankruptcy proceedings or completion of a loan repayment plan.
Deferment: A temporary postponement of loan payments, typically granted to borrowers who are facing financial hardship or enrolled in a qualified educational program.
Debt-to-Equity Ratio: A financial ratio that compares a company's total debt to its total equity, used to assess the company's leverage and financial risk.
Debt Service: The regular payment of principal and interest on a debt obligation, such as a mortgage or loan.
Debt Ratio: A financial ratio that compares a borrower's total debt to their total income, used by lenders to assess the borrower's ability to manage debt.
Due Diligence: The process of conducting a thorough investigation or examination of a property, borrower, or investment opportunity before entering into a transaction or agreement.
Debt Forgiveness: The cancellation or reduction of a borrower's obligation to repay a debt, typically granted in cases of extreme financial hardship or as part of a debt relief program.
Debt-to-Asset Ratio: A financial ratio that compares a company's total debt to its total assets, used to assess the company's solvency and financial stability.
Debt Restructuring: The process of modifying the terms of a loan or credit agreement, such as extending the repayment period or reducing the interest rate, to make it more manageable for the borrower.
Debt Collection: The process of pursuing payment of delinquent debts through various methods, such as phone calls, letters, and legal action, typically carried out by third-party collection agencies.
Debt-to-GDP Ratio: A financial ratio that compares a country's total debt to its gross domestic product (GDP), used to assess the country's fiscal health and ability to repay its debts.
Debt Securities: Financial instruments that represent a creditor relationship between an issuer and an investor, such as bonds, notes, and debentures.
Debt Instrument: A legal contract or agreement that outlines the terms and conditions of a loan or credit arrangement, including the repayment schedule, interest rate, and any collateral or security required.
Debt Consolidation Loan: A loan used to pay off multiple debts, combining them into a single loan with a fixed interest rate and monthly payment.
Debt Ceiling: The maximum amount of debt that a government or organization is legally allowed to incur.
E
Escrow: An account where funds are held by a third party, typically a title company, to be used for the payment of property-related expenses, such as taxes and insurance.
Equity: The difference between the market value of a property and the outstanding balance of any liens or mortgages on the property.
Earnest Money: A deposit made by a buyer to demonstrate their serious intent to purchase a property, typically held in escrow until the closing of the transaction.
Escrow Account: An account held by a lender to collect funds from the borrower for the payment of property-related expenses, such as taxes and insurance.
Equity Loan: A loan that allows homeowners to borrow against the equity in their property, using the property as collateral.
Equal Credit Opportunity Act (ECOA): A federal law that prohibits discrimination in lending based on factors such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
Escrow Analysis: A periodic review of an escrow account to ensure that the correct amount of funds is being collected to cover property-related expenses.
Escrow Officer: A neutral party responsible for handling the transfer of funds and documents during a real estate transaction, typically employed by a title company.
Equity Line of Credit: A line of credit that allows homeowners to borrow against the equity in their property, similar to a home equity loan but with more flexibility in accessing the funds.
Escrow Instructions: Written instructions provided by the buyer, seller, and lender to the escrow officer, detailing the specific conditions and requirements of the real estate transaction.
Early Payment Penalty: A fee charged by a lender if a borrower pays off a loan or mortgage before the agreed-upon term, designed to compensate the lender for potential lost interest.
Escrow Closing: The final stage of a real estate transaction, where the necessary documents and funds are exchanged, and ownership of the property is transferred to the buyer.
Equity Release: A financial product that allows homeowners to unlock the equity in their property without having to sell it, often used by older homeowners to supplement their retirement income.
Escrow Holdback: A portion of the funds held in escrow that is set aside to cover repairs or other contingencies after the closing of a real estate transaction.
Escrow Refund: The return of funds from an escrow account to the borrower or seller, typically when there is an overpayment or the account is no longer needed.
Equity Investment: An investment in a property or business that provides the investor with an ownership interest, typically in the form of shares or partnership units.
Escrow Waiver: An agreement between the buyer and seller to waive the requirement for an escrow account, often used in all-cash transactions or when the buyer is obtaining financing from a non-traditional lender.
Employment Verification: The process of confirming a borrower's employment status and income, typically required by lenders as part of the mortgage application process.
Equity Stripping: A fraudulent practice where a lender or investor intentionally provides a borrower with a loan or investment that exceeds the value of the collateral, often leading to foreclosure or other financial harm.
Escrow Disbursement: The release of funds from an escrow account to pay for specific expenses, such as property taxes or insurance premiums.
Equity Release Mortgage: A type of loan that allows older homeowners to access the equity in their property without having to make regular mortgage payments, with the loan repaid upon the sale of the property or the homeowner's death.
Escrow Shortage: A situation where there are insufficient funds in an escrow account to cover property-related expenses, resulting in a shortfall that must be paid by the borrower.
Escrow Balance: The amount of funds held in an escrow account at any given time, typically consisting of the borrower's monthly escrow payments.
Equity Stripping Laws: Laws and regulations designed to protect homeowners from predatory lending practices that strip away their home equity, often through excessive fees or high-interest loans.
Escrow Agent: A neutral third party responsible for holding and distributing funds and documents during a real estate transaction, ensuring that all parties fulfill their contractual obligations.
F
Fair Credit Reporting Act (FCRA): A federal law that regulates the collection, dissemination, and use of consumer credit information, aiming to ensure accuracy, fairness, and privacy.
Fixed-Rate Mortgage: A type of mortgage loan with an interest rate that remains the same for the entire term of the loan, providing predictable monthly payments.
Foreclosure: The legal process by which a lender takes possession of a property due to the borrower's failure to make mortgage payments, typically resulting in the sale of the property to satisfy the debt.
FHA Loan: A mortgage loan insured by the Federal Housing Administration (FHA), designed to make homeownership more accessible to low- and moderate-income borrowers.
Fair Credit Billing Act (FCBA): A federal law that provides protections for consumers in resolving billing errors and unauthorized charges on their credit card accounts.
Fair Debt Collection Practices Act (FDCPA): A federal law that regulates the behavior of third-party debt collectors, prohibiting abusive, deceptive, and unfair practices.
FICO Score: A credit scoring model developed by the Fair Isaac Corporation, widely used by lenders to assess an individual's creditworthiness.
Forbearance: A temporary agreement between a lender and a borrower that allows the borrower to pause or reduce mortgage payments for a specified period of time.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a government-sponsored enterprise that buys and securitizes mortgages, providing liquidity to the mortgage market.
Fannie Mae: The Federal National Mortgage Association, a government-sponsored enterprise that buys and securitizes mortgages, promoting homeownership and affordable housing.
Fair Market Value: The price at which a property would sell between a willing buyer and a willing seller, both having reasonable knowledge of the property's attributes and the current market conditions.
Fixed-Interest Rate: An interest rate that remains unchanged throughout the term of the loan or investment, providing stability and predictability.
Federal Reserve System (the Fed): The central banking system of the United States, responsible for conducting monetary policy, supervising banks, and maintaining stable financial markets.
Fraud Alert: A notice placed on a consumer's credit file to alert potential creditors of possible identity theft or fraudulent activity.
Free Credit Report: A report provided by the major credit bureaus, Equifax, Experian, and TransUnion, once every 12 months, containing information about an individual's credit history.
Fair Market Rent: The amount of rent that a property would command in the open market, based on comparable rental properties in the area.
First-Time Homebuyer: An individual who is purchasing a home for the first time, often eligible for special loan programs or incentives.
Federal Housing Administration (FHA): A government agency that insures mortgage loans, providing lenders with protection against default and enabling them to offer more favorable terms to borrowers.
Finance Charge: The cost of credit expressed as a dollar amount, including interest, fees, and other charges associated with borrowing.
Fixed-Rate Loan: A loan with an interest rate that remains constant for the entire term of the loan, providing predictable monthly payments.
Funding Fee: A fee charged by the Department of Veterans Affairs (VA) for VA loans, used to help offset the cost of the loan guarantee program.
Fair Credit and Charge Card Disclosure Act: A federal law that requires credit card issuers to provide clear and accurate disclosure of the terms and costs of credit card accounts.
Federal Housing Finance Agency (FHFA): An independent regulatory agency overseeing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, responsible for ensuring their safety and soundness.
Fixed-Income Investment: An investment that provides a fixed stream of income, such as bonds or certificates of deposit (CDs).
Free Application for Federal Student Aid (FAFSA): A form completed by students to determine their eligibility for federal financial aid, including grants, loans, and work-study programs.
G
Grace Period: A specified period of time after the due date of a payment during which no late fees or penalties are charged.
Good Faith Estimate (GFE): A document provided by a mortgage lender to a borrower that outlines the estimated closing costs and loan terms. - RETIRED in 2015
Gift Funds: Money given to a borrower as a down payment or to cover closing costs, typically provided by a family member or close relative.
Garnishment: A legal process in which a creditor obtains a court order to collect a debt by seizing a portion of the debtor's wages or assets.
Government-Sponsored Enterprise (GSE): A financial institution chartered and supported by the government, such as Fannie Mae and Freddie Mac.
Gross Income: The total income earned by an individual or household before deductions or expenses are taken into account.
Good Credit: A positive credit history and high credit score indicating a borrower's responsible credit management and repayment.
Graduated Payment Mortgage (GPM): A type of mortgage loan that starts with lower initial payments that gradually increase over time.
Goodwill Adjustment: A request to a creditor to remove a negative entry from a credit report as a gesture of goodwill.
Gift Letter: A letter signed by the donor of gift funds, stating that the funds are a gift and not a loan to the borrower.
Guarantor: A person or entity that agrees to be responsible for the repayment of a loan if the borrower defaults.
Government-Backed Mortgage: A mortgage loan that is insured or guaranteed by a government agency, such as FHA or VA loans.
Graduated Payment Schedule: A schedule that outlines the increasing monthly payments of a graduated payment mortgage.
Good Standing: A status indicating that a borrower is current on all debt obligations and has a positive credit history.
Group Home Mortgage: A mortgage loan for a property that will be used as a residential facility for a group of unrelated individuals.
General Lien: A legal claim against all of a borrower's assets, rather than a specific property or collateral.
Good Faith Payment: A deposit made by a buyer to demonstrate their intention to purchase a property in good faith.
Gross Debt Service (GDS) Ratio: The percentage of a borrower's gross income that is used to cover housing-related expenses, including mortgage payments, property taxes, and insurance.
Graduated Payment Loan: A loan with a payment schedule that starts with lower initial payments and gradually increases over time.
Grace Period Expiration: The end of the grace period, after which late fees or penalties may be charged for missed payments.
Government Loan: A loan program offered by a government agency, such as FHA, VA, or USDA loans.
General Warranty Deed: A legal document that transfers ownership of a property and guarantees that the seller has clear title and the right to sell.
Gross Rental Income: The total rental income generated by a property before deducting expenses or vacancies.
Grace Period Extension: A request to extend the grace period for making a payment without incurring late fees or penalties.
Good Faith Estimate of Closing Costs: An estimate provided by a mortgage lender to a borrower that outlines the expected closing costs for a mortgage loan.
H
Home Equity: The difference between the current market value of a home and the outstanding balance of any mortgage or loan secured by the property.
Home Equity Line of Credit (HELOC): A revolving line of credit that allows homeowners to borrow against the equity in their home.
Homeowner's Insurance: Insurance that protects homeowners against damage or loss to their property and provides liability coverage.
Housing Expense Ratio: The percentage of a borrower's gross monthly income that is used to cover housing expenses, including mortgage payments, property taxes, and insurance.
Hard Inquiry: A credit inquiry that occurs when a lender or creditor checks a borrower's credit report for the purpose of granting credit.
Home Appraisal: An assessment of the value of a property conducted by a licensed appraiser to determine its market value.
Home Inspection: A thorough examination of a property's condition, typically conducted by a professional inspector, to identify any potential issues or defects.
Homeowner's Association (HOA): A governing body that sets and enforces rules and regulations for a community or condominium complex.
Home Warranty: A service contract that covers the repair or replacement of major home systems and appliances due to normal wear and tear.
Homebuyer Education: Educational programs or courses designed to provide prospective homebuyers with information and guidance on the homebuying process.
Housing Counseling: Professional counseling services that assist individuals with housing-related issues, such as budgeting, foreclosure prevention, and homebuying.
Home Equity Loan: A loan that allows homeowners to borrow against the equity in their home, typically in a lump sum with a fixed interest rate.
Homeowner's Association Fees: Regular fees paid by homeowners to the homeowner's association to cover maintenance and other expenses.
Homeowner's Warranty: A warranty provided by a builder or seller that covers certain repairs or replacements of a newly constructed or purchased home.
Homebuyer Assistance Program: Government or nonprofit programs that provide financial assistance, counseling, or other support to help individuals and families become homeowners.
Home Equity Conversion Mortgage (HECM): A type of reverse mortgage that allows homeowners aged 62 or older to convert a portion of their home equity into loan proceeds.
Home Inspection Contingency: A clause in a purchase agreement that allows the buyer to have a home inspection conducted and negotiate repairs or credits based on the findings.
Homeowner's Association Dues: Regular fees paid by homeowners to the homeowner's association to cover common area maintenance and other shared expenses.
High-Ratio Mortgage: A mortgage loan that exceeds 80% of the property's value, requiring the borrower to pay for mortgage insurance.
Home Equity Loan-to-Value (LTV) Ratio: The ratio of the outstanding balance of a home equity loan to the appraised value of the home.
Homeowner's Insurance Premium: The amount paid by a homeowner for insurance coverage, typically on an annual or monthly basis.
Home Equity Release: The process of accessing the equity in a home through a loan or other financial arrangement.
Homeowner's Insurance Policy: The contract between a homeowner and an insurance company that outlines the terms and coverage of the homeowner's insurance.
Home Equity Loan Closure: The process of repaying and closing a home equity loan, typically through regular monthly payments over a specified term.
Homebuyer Tax Credit: A tax credit or deduction available to eligible homebuyers that can help reduce the cost of homeownership.
I
Interest: The cost of borrowing money, typically expressed as a percentage of the loan amount.
Interest Rate: The percentage of the loan amount that is charged as interest over a specific period of time.
Income Verification: The process of verifying a borrower's income to determine their ability to repay a loan.
Installment Loan: A loan that is repaid over a specific period of time through regular payments of principal and interest.
Insurance: A contract that provides financial protection against specified risks, such as property damage or loss.
Initial Public Offering (IPO): The first sale of a company's stock to the public, often used to raise capital.
Index: A benchmark used to measure changes in the value of an investment or interest rates.
Inflation: The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
Investment Property: Real estate that is purchased with the intention of generating income or a return on investment.
Interest-Only Loan: A loan that requires the borrower to only pay the interest for a certain period of time, typically followed by principal and interest payments.
Incentive: A reward or benefit offered to encourage a specific action, such as taking out a loan or opening a credit card.
Income-Based Repayment (IBR): A repayment plan for federal student loans that caps monthly payments based on the borrower's income and family size.
Installment Debt: Debt that is repaid over time in regular, fixed payments, such as a car loan or personal loan.
Investment: The purchase of an asset with the expectation of generating income or a profit in the future.
Interest Deduction: A tax deduction that allows homeowners to deduct the interest paid on their mortgage from their taxable income.
Interest-Only Mortgage: A mortgage loan that requires the borrower to only pay the interest for a certain period of time, typically followed by principal and interest payments.
Interest Rate Cap: A limit on how much an interest rate can increase or decrease during a specific period of time.
Interest Rate Risk: The risk that changes in interest rates will affect the value of an investment or the cost of borrowing.
Interest Rate Swap: A financial derivative that allows two parties to exchange interest rate payments, often used to manage interest rate risk.
Income Property: Real estate that is purchased with the intention of generating rental income.
Inheritance: Money or assets received from a deceased person's estate.
Installment Sale: A method of selling property in which the buyer makes regular payments over time, rather than paying the full purchase price upfront.
Interest-Only Period: The initial period of time in an interest-only loan during which the borrower is only required to pay the interest.
Interest Rate Reduction Refinance Loan (IRRRL): A refinancing option for homeowners with an existing VA loan that allows them to obtain a lower interest rate.
Interest Rate Spread: The difference between the interest rate a financial institution pays on deposits and the interest rate it charges on loans.
J
Joint Account: A bank account or credit card account that is shared by two or more individuals.
Joint Tenancy: A form of property ownership in which two or more individuals own equal shares of the property with the right of survivorship.
Judgment: A court decision that determines the rights and obligations of parties involved in a legal dispute.
Judgment Lien: A claim against a property owner's assets as a result of a court judgment.
Jumbo Loan: A mortgage loan that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
Joint Liability: The legal responsibility of two or more individuals to repay a debt or fulfill an obligation.
Joint Credit: Credit that is extended to two or more individuals who are equally responsible for repaying the debt.
Junior Mortgage: A mortgage that is subordinate to a first mortgage and has a lower priority in the event of foreclosure.
Joint and Several Liability: A legal principle that holds each party in a group responsible for the entire debt or obligation.
Judgment Proof: A term used to describe a debtor who does not have sufficient assets or income to satisfy a judgment.
Judgment Proof Letter: A letter sent to a creditor to inform them that the debtor does not have sufficient assets or income to satisfy a judgment.
Judgment Credit: A court-ordered payment that a debtor must make to a creditor as a result of a judgment.
Jingle Mail: A term used to describe the act of mailing the keys to a lender to surrender a property in foreclosure.
Joint and Several Promissory Note: A promissory note that holds each party responsible for the entire debt if one party fails to fulfill their obligation.
Joint Application: An application for credit or a loan that is submitted by two or more individuals.
Jumbo Mortgage: A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
Judgment Proof Status: The legal status of a debtor who does not have sufficient assets or income to satisfy a judgment.
Judgment for Possession: A court order that grants a creditor the right to take possession of a debtor's property.
Judgment Proof Affidavit: A sworn statement by a debtor declaring that they do not have sufficient assets or income to satisfy a judgment.
Judgment Lien Certificate: A document filed with the county clerk's office to create a lien on a debtor's property as a result of a judgment.
Judgment Lien Release: A document filed with the county clerk's office to remove a lien on a debtor's property as a result of a judgment.
Joint Ownership: The co-ownership of property by two or more individuals.
Judgment Creditor: The party who is owed money as a result of a court judgment.
Judgment Debtor: The party who owes money as a result of a court judgment.
Judgment Proof Exemption: A legal exemption that protects certain assets from being seized to satisfy a judgment.
K
Key Rate: The interest rate that serves as a benchmark for determining other interest rates.
Keyed Rate: An interest rate that is manually entered into a system or device.
KYC (Know Your Customer): The process by which financial institutions verify and identify their customers.
Kicker: An additional fee or charge added to a loan or investment.
Kiting: The illegal practice of writing a check from one account with insufficient funds and depositing it into another account to cover the first check.
Kappa Score: A statistical measure used to assess the accuracy of credit scoring models.
K-Shaped Recovery: A type of economic recovery where different sectors or groups experience varying levels of growth or decline.
Kiosk Banking: A banking service that allows customers to perform basic transactions through self-service kiosks.
Knock-Out Option: An option contract that becomes null and void if a specific event occurs.
Kicker Rate: An interest rate that is higher than the current market rate.
Kicker Clause: A provision in a loan agreement that allows the lender to increase the interest rate under certain conditions.
Kondratieff Wave: A long-term economic cycle characterized by alternating periods of growth and decline.
Kicker Loan: A type of loan that includes an additional payment or fee at the end of the loan term.
Kiting Check: The illegal practice of creating artificial balances in bank accounts through the use of multiple checks.
Kickback: An illegal payment or commission given in exchange for a business referral or favor.
Kappa Coefficient: A measure of agreement between two observers or raters.
Kicker Payment: An additional payment made at the end of a loan term.
Key Person Insurance: An insurance policy that provides coverage for the loss of a key employee or executive.
Kicker Provision: A clause in a contract that provides for an additional payment or benefit under certain conditions.
Kondratieff Cycle: A long-term economic cycle that lasts approximately 50 to 60 years.
Kicker Option: An additional feature or benefit included in a financial product or investment.
Key Rate Duration: A measure of the sensitivity of a bond's price to changes in the key interest rate.
Key Rate Duration Gap: The difference between the key rate duration of a bank's assets and liabilities.
Knock-Out Barrier Option: An option contract that becomes null and void if a specific price level is reached.
Knock-In Option: An option contract that becomes active or "knocks in" if a specific price level is reached.
L
Lender: A financial institution or individual that provides funds to borrowers.
Loan: A sum of money that is borrowed and expected to be paid back with interest.
Loan Agreement: A legal contract between a borrower and a lender that outlines the terms and conditions of a loan.
Loan Application: A document that a borrower fills out to apply for a loan, providing personal and financial information.
Loan Balance: The amount of money that is still owed on a loan.
Loan Officer: A representative of a financial institution who helps borrowers apply for loans and guides them through the loan process.
Loan Origination: The process of creating a new loan, including the application, underwriting, and approval stages.
Loan Servicing: The administration of a loan, including collecting payments, managing escrow accounts, and handling customer service.
Loan Term: The length of time over which a loan is repaid, usually expressed in months or years.
Loan-to-Value Ratio (LTV): The ratio of the loan amount to the appraised value of the property being financed.
Late Payment: A payment that is not made by the due date specified in the loan agreement.
Late Fee: A fee charged by a lender when a borrower fails to make a payment by the due date.
Line of Credit: A flexible borrowing arrangement in which a lender approves a maximum credit limit for a borrower, who can then access funds as needed.
Lien: A legal claim against a property as collateral for a debt.
Loan Modification: A change to the terms of a loan, often made to help a borrower who is struggling to make payments.
Loan Preapproval: A preliminary approval for a loan, based on a borrower's creditworthiness and financial information.
Loan-to-Income Ratio (LTI): The ratio of a borrower's total loan payments to their income, used to assess their ability to repay a loan.
Loan-to-Value Ratio (LTV): The ratio of the loan amount to the appraised value of the property being financed.
Loan Underwriting: The process of evaluating a borrower's creditworthiness and determining whether to approve a loan application.
Loan Amortization: The process of gradually paying off a loan over time through regular payments.
Loan Default: The failure to repay a loan according to the terms of the loan agreement.
Loan Forgiveness: The cancellation of all or part of a loan balance, typically as a result of meeting certain criteria.
Loan Repayment: The process of paying back a loan, typically through regular installments.
Loan Security: Collateral or assets that a borrower pledges to a lender to secure a loan.
Loan-to-Income Ratio (LTI): The ratio of a borrower's total loan payments to their income, used to assess their ability to repay a loan.
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Mortgage: A loan used to finance the purchase of a property, with the property itself serving as collateral.
Mortgagee: The lender or financial institution that provides the mortgage loan.
Mortgagor: The borrower or individual who takes out the mortgage loan.
Mortgage Broker: A professional who helps borrowers find mortgage loans from different lenders.
Mortgage Insurance: Insurance that protects the lender in case the borrower defaults on the mortgage loan.
Mortgage Rate: The interest rate charged on a mortgage loan.
Mortgage Refinancing: The process of replacing an existing mortgage loan with a new loan, often to obtain better terms or lower interest rates.
Mortgage Term: The length of time over which a mortgage loan is repaid, typically expressed in years.
Mortgage Payment: The regular installment payments made by the borrower to repay the mortgage loan.
Mortgage Preapproval: A preliminary approval for a mortgage loan, based on the borrower's creditworthiness and financial information.
Mortgage Servicer: The company responsible for collecting mortgage payments and managing the loan on behalf of the lender.
Mortgage Points: Upfront fees paid by the borrower to the lender at closing in exchange for a lower interest rate on the mortgage loan.
Mortgage Escrow: An account held by the mortgage servicer to collect and hold funds for property taxes and insurance.
Mortgage Assumption: The transfer of an existing mortgage loan from one borrower to another.
Mortgage Default: The failure to repay a mortgage loan according to the terms of the loan agreement.
Mortgage Foreclosure: The legal process by which a lender takes possession of a property after the borrower defaults on the mortgage loan.
Mortgage Principal: The original amount of money borrowed in a mortgage loan, excluding interest and other fees.
Mortgage Interest: The cost of borrowing money for a mortgage loan, expressed as a percentage of the loan amount.
Mortgage Amortization: The process of gradually paying off a mortgage loan over time through regular payments.
Mortgage Underwriting: The process of evaluating a borrower's creditworthiness and determining whether to approve a mortgage loan application.
Mortgage Modification: A change to the terms of a mortgage loan, often made to help a borrower who is struggling to make payments.
Mortgage Insurance Premium (MIP): An insurance premium paid by the borrower to protect the lender in case of default on a government-backed mortgage loan.
Mortgage Broker Fee: A fee charged by a mortgage broker for their services in helping borrowers find a mortgage loan.
Mortgage Deed: A legal document that establishes a mortgage lien on a property and outlines the terms of the mortgage loan.
Mortgage Closing: The final step in the mortgage process, where the borrower signs the loan documents and takes ownership of the property.
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National Credit Union Administration (NCUA): The federal agency that regulates and supervises federal credit unions in the United States.
Negative Amortization: A situation where the principal balance of a loan increases over time due to unpaid interest.
Net Income: The amount of money left over after subtracting expenses from income.
Non-Amortizing Loan: A type of loan where the borrower only pays interest and does not make principal payments during the term of the loan.
Non-Performing Loan: A loan that is in default or is not generating the expected income for the lender.
Non-Revolving Credit: Credit that does not have a revolving balance and typically has a fixed repayment schedule.
Non-Recourse Loan: A loan where the borrower is not personally liable for repayment and the lender can only seek repayment from the collateral.
Nontraditional Credit: Credit history that is not based on traditional credit sources, such as credit cards or loans.
Note: A legal document that outlines the terms of a loan, including the repayment schedule and interest rate.
Notice of Default: A formal notification sent to a borrower indicating that they have failed to make required payments on a loan.
Notice of Foreclosure: A formal notification sent to a borrower indicating that the lender intends to foreclose on the property due to default on the mortgage loan.
Notice of Right to Cancel: A document that gives a borrower the right to cancel certain types of loan transactions within a specified period of time.
No-Doc Mortgage: A type of mortgage loan where the borrower does not need to provide extensive documentation of their income and assets.
Non-Qualified Mortgage (Non-QM): A mortgage loan that does not meet the qualified mortgage standards set by the Consumer Financial Protection Bureau (CFPB).
Non-Owner Occupied: A property that is not occupied by the owner and is instead used as a rental property or investment.
Non-Recourse Mortgage: A type of mortgage loan where the borrower is not personally liable for repayment and the lender's only recourse is to foreclose on the property.
Non-Warrantable Condo: A condominium unit that does not meet the eligibility requirements for conventional mortgage financing.
No-Interest Loan: A loan where the borrower is not charged any interest on the principal amount borrowed.
Non-Traditional Mortgage: A mortgage loan that does not conform to traditional lending standards, such as adjustable-rate mortgages or interest-only mortgages.
Non-Disturbance Clause: A clause in a lease or mortgage agreement that protects the tenant or borrower in the event of a foreclosure or sale of the property.
Non-Recourse Debt: Debt that is secured by collateral and where the lender's only recourse in case of default is to seize the collateral.
Non-Conforming Loan: A mortgage loan that does not meet the guidelines set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac.
Non-Interest-Bearing Loan: A loan where the borrower is not required to make interest payments during the term of the loan.
Non-Owner Occupied Mortgage: A mortgage loan for a property that is not the borrower's primary residence.
Non-Traditional Credit Report: A credit report that includes non-traditional credit sources, such as rent payments or utility bills, in addition to traditional credit accounts.
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Offer: A proposal made by a buyer to purchase a property at a specific price and under certain conditions.
Open-End Mortgage: A mortgage loan that allows the borrower to borrow additional funds in the future without having to refinance the entire loan.
Origination Fee: A fee charged by a lender for processing a loan application and initiating the loan.
Overdraft Protection: A service offered by banks that allows customers to link their checking account to another account, such as a savings account, to cover any overdrafts.
Owner Financing: A financing arrangement where the seller of a property provides the financing for the buyer instead of a traditional mortgage lender.
Owner-Occupied: A property that is occupied by the owner as their primary residence.
Ownership Interest: The percentage of ownership an individual or entity has in a property.
Option ARM: An adjustable-rate mortgage that gives borrowers the option to make different payment amounts each month, including minimum payments, interest-only payments, or fully amortizing payments.
Origination: The process of creating a new loan, including the application, underwriting, and approval stages.
Open House: A scheduled period of time during which a property is available for potential buyers to view without an appointment.
Offer Letter: A written document from a lender that outlines the terms and conditions of a mortgage loan that has been approved.
Overdraft: A negative balance in a bank account that occurs when withdrawals exceed the available funds.
Origination Date: The date on which a loan is funded and the borrower assumes responsibility for the debt.
Option Fee: A fee paid by a buyer to a seller to secure the option to purchase a property within a specified period of time.
Owner's Title Policy: An insurance policy that protects the property owner against any defects in the title to the property.
Open-End Credit: A line of credit that allows borrowers to make repeated borrowings up to a certain limit.
Option Period: A specified period of time during which a buyer has the option to terminate a contract to purchase a property.
Outstanding Balance: The remaining amount of principal owed on a loan.
Owner-Builder: A person who acts as their own general contractor when building or renovating a property.
Ownership Rights: The legal rights and privileges associated with owning a property, including the right to use, sell, or transfer the property.
Origination Process: The steps involved in processing and approving a loan application, including verification of income, credit checks, and appraisal of the property.
Option to Renew: A provision in a lease agreement that gives the tenant the right to extend the lease for an additional period of time.
Owner's Equity: The value of a property that is owned outright by the owner, calculated by subtracting the outstanding mortgage balance from the property's market value.
Origination Points: Fees paid to a lender at the time of closing to reduce the interest rate on a mortgage loan.
Origination System: The software or system used by lenders to process loan applications and manage the origination process.
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Principal: The initial amount of money borrowed in a loan, excluding interest and other fees.
Pre-Approval: The process in which a lender determines how much money they are willing to lend to a borrower before they start house hunting.
Prepayment Penalty: A fee charged to a borrower if they pay off their loan before the agreed-upon term.
Private Mortgage Insurance (PMI): Insurance that protects the lender in case the borrower defaults on the loan. It is typically required for borrowers who put down less than 20% as a down payment.
Points: Fees paid by the borrower to the lender at the time of closing to reduce the interest rate on the loan.
Property Appraisal: An evaluation of the value of a property conducted by a licensed appraiser to determine how much it is worth.
Power of Attorney: A legal document that authorizes someone to act on behalf of another person in legal and financial matters.
Property Tax: A tax levied by the government on the value of a property, typically paid by the property owner.
Purchase Agreement: A legally binding contract between a buyer and seller that outlines the terms and conditions of the sale of a property.
Prepayment: Paying off all or a portion of a loan before it is due.
Promissory Note: A legal document that outlines the terms and conditions of a loan, including the amount borrowed, interest rate, and repayment schedule.
Purchase Money Mortgage: A mortgage loan used to finance the purchase of a property.
Prime Rate: The interest rate that banks charge their most creditworthy customers.
Pre-Qualification: An informal assessment by a lender to determine how much money a borrower may be eligible to borrow.
Payment History: A record of a borrower's past payments on loans and credit accounts, used by lenders to assess creditworthiness.
Principal Balance: The remaining amount of the original loan amount that is still owed.
Property Survey: A survey conducted by a professional surveyor to determine the boundaries and features of a property.
Prepayment Clause: A provision in a loan agreement that allows the borrower to pay off the loan before the agreed-upon term without incurring a prepayment penalty.
Post-Closing: The period of time after a loan has been funded and the property purchase has been completed.
Purchase Price: The agreed-upon price at which a property is bought or sold.
Pre-Foreclosure: The period of time after a borrower has defaulted on their mortgage payments but before the property is foreclosed upon.
Principal and Interest: The two components of a loan payment, with principal being the amount borrowed and interest being the cost of borrowing.
Prepayment Risk: The risk that a borrower will pay off their loan before the agreed-upon term, potentially resulting in the lender losing out on expected interest payments.
Property Lien: A legal claim against a property, typically used as collateral for a loan.
Purchase Money Loan: A loan used to finance the purchase of a property.
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Qualified Mortgage (QM) - A type of mortgage that meets certain criteria set by the Consumer Financial Protection Bureau (CFPB) to ensure borrowers have the ability to repay the loan.
Qualifying Ratios - The ratios used by lenders to determine a borrower's ability to repay a loan, typically expressed as a percentage of the borrower's income.
Quality Control - The process of reviewing loan files and documentation to ensure compliance with lending guidelines and regulations.
Quantitative Easing - A monetary policy used by central banks to stimulate the economy by purchasing government securities to increase the money supply.
Qualified Borrower - A borrower who meets the criteria set by a lender to be eligible for a loan.
Qualified Appraiser - An appraiser who meets certain qualifications and standards set by professional appraisal organizations.
Quitclaim Deed - A legal document used to transfer ownership rights to a property without making any warranties or guarantees about the title.
Quick Ratio - A financial ratio that measures a company's ability to meet its short-term obligations using its most liquid assets.
Qualified Withdrawal - A withdrawal from a qualified retirement account, such as a 401(k) or IRA, that meets certain criteria to avoid penalties.
Qualifying Income - The income that is considered by a lender when determining a borrower's ability to repay a loan.
Qualified Default Investment Alternative (QDIA) - An investment option that is automatically selected for participants in a retirement plan who do not make an investment choice.
Qualified Dividend - A dividend that qualifies for a lower tax rate because it is paid by a corporation that meets certain criteria.
Qualified Improvement Property (QIP) - A type of property improvement that is eligible for certain tax deductions and depreciation benefits.
Qualified Terminable Interest Property (QTIP) Trust - A type of trust that allows a surviving spouse to receive income from the trust while preserving the assets for other beneficiaries.
Qualified Domestic Relations Order (QDRO) - A court order that outlines the division of retirement plan assets in a divorce or separation.
Quality Score - A measure used by credit bureaus to assess the creditworthiness of an individual or business.
Qualified Health Plan (QHP) - A health insurance plan that meets certain criteria set by the Affordable Care Act (ACA).
Qualified Longevity Annuity Contract (QLAC) - An annuity contract that is purchased with retirement savings and provides income in later years to ensure financial security.
Quoted Rate - The interest rate that is quoted to a borrower by a lender for a specific loan.
Qualified Medical Expenses - Expenses that are eligible for reimbursement from a health savings account (HSA) or flexible spending account (FSA).
Qualified Joint and Survivor Annuity (QJSA) - A type of retirement benefit that provides income to a surviving spouse after the death of the primary beneficiary.
Qualified Charitable Distribution (QCD) - A direct transfer of funds from an IRA to a qualified charitable organization, which can provide tax benefits for the IRA owner.
Qualified Education Expenses - Expenses that are eligible for certain tax benefits, such as the American Opportunity Credit or Lifetime Learning Credit, when paying for higher education.
Qualified Tuition Program (QTP) - A tax-advantaged savings plan that allows individuals to save for future education expenses.
Qualified Intermediary (QI) - A third-party entity that facilitates tax-deferred exchanges of property under Section 1031 of the Internal Revenue Code.
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Refinancing - The process of replacing an existing loan with a new loan that has different terms, typically to obtain a lower interest rate or monthly payment.
Reverse Mortgage - A type of loan available to homeowners aged 62 or older that allows them to convert a portion of their home equity into cash, which is typically paid out in monthly installments.
Rate Lock - An agreement between a borrower and a lender that guarantees a specific interest rate for a certain period of time, usually during the loan application process.
Real Estate Owned (REO) - A property that has been acquired by a lender through foreclosure and is now owned by the lender.
Repayment Plan - An arrangement between a borrower and a lender to modify the terms of a loan in order to make the repayment more manageable.
Residual Income - The amount of income that a borrower has left after paying all monthly debts and expenses, which is used to determine loan eligibility.
Revolving Credit - A type of credit that allows a borrower to borrow up to a certain limit and make payments based on the amount borrowed.
Risk-Based Pricing - The practice of setting interest rates and fees based on the borrower's creditworthiness and the level of risk associated with the loan.
Rate Adjustment - A change in the interest rate on an adjustable-rate mortgage (ARM) after the initial fixed-rate period.
Rate Cap - The maximum limit on how much the interest rate can increase or decrease during a specific period on an adjustable-rate mortgage.
Rate Sheet - A document provided by a lender that shows the current interest rates and fees for different loan programs.
Re-Amortization - The process of recalculating the monthly payment amount and term of a loan based on a new interest rate or loan balance.
Rental Income - The income generated from renting out a property, which can be used to qualify for a mortgage or loan.
Rescission Period - The period of time during which a borrower can cancel a loan agreement without penalty.
Recourse Loan - A type of loan in which the lender has the right to pursue the borrower's assets in the event of default.
Refinancing Costs - The fees and expenses associated with refinancing a loan, such as appraisal fees, title insurance, and closing costs.
Repossession - The legal process of taking back a property or asset that was used as collateral for a loan due to non-payment.
Return on Investment (ROI) - A measure of the profitability of an investment, calculated as the gain or loss relative to the amount invested.
Revolving Debt - Debt that does not have a fixed repayment term and can be borrowed and repaid repeatedly, such as credit card debt.
Right of Rescission - The legal right of a borrower to cancel a loan agreement within a specified period of time after signing the loan documents.
Recurring Debt - Ongoing debts that require regular monthly payments, such as mortgage payments, car loans, and student loans.
Rate and Term Refinance - The process of refinancing a mortgage to change the interest rate or loan term without borrowing additional funds.
Reinstatement - The process of bringing a delinquent loan current by paying all past due amounts, including principal, interest, and fees.
Rent-to-Own - A housing arrangement in which a tenant has the option to purchase the property at a later date, typically after renting for a certain period of time.
Renovation Loan - A loan that provides funds to finance the renovation or improvement of a property.
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Secured Loan - A loan that is backed by collateral, such as a house or car, which the lender can seize if the borrower fails to repay the loan.
Subprime Mortgage - A type of mortgage offered to borrowers with poor credit histories or low credit scores, typically with higher interest rates and fees.
Servicer - The company that collects mortgage payments from borrowers on behalf of the lender and handles other aspects of loan administration.
Settlement Statement - A document that outlines the final costs and expenses associated with a real estate transaction, including the amount due from the buyer and seller.
Short Sale - The sale of a property for less than the outstanding mortgage balance, typically with the lender's approval to avoid foreclosure.
Second Mortgage - A mortgage that is taken out on a property that is already mortgaged, often used to access additional funds or consolidate debt.
Single-Family Home - A residential property designed to house one family, typically detached from other structures and with its own lot.
Self-Employed - A person who works for themselves and is not employed by a company or organization.
Securitization - The process of pooling together similar financial assets, such as mortgages, and selling them as securities to investors.
Student Loan - A type of loan used to finance education expenses, typically with lower interest rates and flexible repayment options.
Subordination - The act of giving one debt or lien priority over another, often done to secure a new loan against a property with an existing mortgage.
Satisfaction of Mortgage - A document that acknowledges the repayment of a mortgage loan and releases the lender's claim on the property.
Seller Financing - A financing arrangement in which the seller of a property provides the financing to the buyer, often used when traditional financing is not available.
Secured Credit Card - A credit card that requires a cash deposit as collateral, typically used by individuals with poor or limited credit history.
Simple Interest - A method of calculating interest on a loan based on the principal balance and the length of time the loan is outstanding.
Statement Balance - The amount of money owed on a credit card at the end of a billing cycle, which must be paid by the due date to avoid interest charges.
Standard Variable Rate - The interest rate charged on a loan that can fluctuate over time based on market conditions.
Surety Bond - A type of insurance policy that guarantees the performance of a specific obligation, such as repaying a loan or completing a construction project.
Secured Credit - Credit that is backed by collateral, such as a car loan or a mortgage, which reduces the lender's risk and often results in lower interest rates.
Secured Creditors - Lenders who have a legal claim on specific assets, such as a mortgage lender or a car loan lender, in the event of default.
Statute of Limitations - The legal timeframe during which a creditor can file a lawsuit to collect a debt, typically varying by state and type of debt.
SBA Loan - A loan that is guaranteed by the Small Business Administration (SBA) and is designed to help small businesses access financing.
Short-Term Loan - A loan that is repaid over a relatively short period, typically less than one year, and often used to cover temporary cash flow needs.
Subordination Agreement - A legal document that establishes the priority of liens or debts on a property, often used in refinancing or second mortgage situations.
Secured Transaction - A legal arrangement in which a borrower provides collateral to a lender as security for a loan.
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Title - The legal document that establishes ownership of a property.
Term - The length of time over which a loan is scheduled to be repaid.
Trust Deed - A legal document that transfers the title of a property to a trustee as security for a loan.
Total Debt Service Ratio (TDSR) - A calculation used by lenders to determine a borrower's ability to repay all debts, including the proposed mortgage.
Tax Lien - A claim by the government on a property to secure payment of delinquent taxes.
Teaser Rate - An introductory interest rate offered on a loan or credit card that is lower than the long-term rate.
Title Insurance - Insurance that protects the lender or buyer against any defects or claims on the title of a property.
Transaction Account - An account used for everyday banking transactions, such as checking or savings accounts.
Truth in Lending Act (TILA) - A federal law that requires lenders to disclose the terms and costs of credit to borrowers.
Transfer Tax - A tax imposed by local governments on the transfer of property ownership.
Treasury Bond - A long-term debt security issued by the U.S. Department of the Treasury.
Term Sheet - A summary of the key terms and conditions of a loan or investment agreement.
Time Deposit - A savings account that requires the funds to be deposited for a fixed period of time, often with a higher interest rate.
Total Interest Paid - The total amount of interest paid over the life of a loan.
Trustee - A person or entity responsible for holding and managing property on behalf of another party.
Transaction Fee - A fee charged for a specific transaction, such as an ATM withdrawal or wire transfer.
Tax Deduction - An expense or item that can be subtracted from a person's taxable income, reducing the amount of taxes owed.
Title Search - The process of examining public records to verify the ownership and history of a property's title.
Term Loan - A loan that is repaid over a fixed period of time, typically with regular payments of principal and interest.
Transfer of Ownership - The legal process of transferring the rights and responsibilities of property ownership from one party to another.
Treasury Note - A medium-term debt security issued by the U.S. Department of the Treasury.
Total Monthly Debt Payments - The combined monthly payments for all debts, including mortgage, credit cards, and loans.
Tax Lien Certificate - A certificate issued to a buyer of a tax lien, which grants the right to collect the unpaid taxes plus interest.
Transaction Date - The date on which a financial transaction takes place, such as the purchase or sale of a property.
Term Extension - The process of extending the length of time over which a loan is scheduled to be repaid.
U
Underwriting - The process of evaluating a borrower's creditworthiness and determining whether to approve a loan.
Upfront Mortgage Insurance Premium (UFMIP) - An initial fee paid by the borrower to the Federal Housing Administration (FHA) for mortgage insurance.
Usury - The illegal practice of charging excessive interest rates on loans.
Uniform Residential Loan Application (URLA) - The standard form used by lenders to collect information from borrowers when applying for a mortgage loan.
Unsecured Loan - A loan that is not backed by collateral, such as a car or property.
Underwater Mortgage - A mortgage loan where the outstanding balance is higher than the value of the property.
Underemployment - A situation where a person is employed but not working to their full potential or in a job that matches their qualifications.
Underwriter - A person or entity responsible for evaluating and approving or denying loan applications based on the lender's guidelines.
Underlying Mortgage - The original mortgage loan that is being refinanced or modified.
Uninsured Depository Institution - A financial institution that does not have deposit insurance from the Federal Deposit Insurance Corporation (FDIC).
Unpaid Principal Balance - The remaining amount of principal on a loan that has not been paid off.
Upfront Costs - The expenses that must be paid at the beginning of a transaction, such as closing costs or down payment.
Usury Laws - Laws that regulate the maximum interest rates that can be charged on loans.
Underwater Borrower - A borrower who owes more on their mortgage loan than the current value of their property.
Unsecured Credit - Credit that is not backed by collateral, such as a credit card or personal loan.
Underwriting Fee - A fee charged by a lender to cover the costs of evaluating and approving a loan application.
Underwriting Guidelines - The specific criteria and requirements that lenders use to evaluate loan applications.
Uniform Commercial Code (UCC) - A set of standardized laws governing commercial transactions in the United States.
Unsecured Debt - Debt that is not backed by collateral, such as credit card debt or medical bills.
Unavailable Credit - The portion of a credit limit that is not currently accessible to the borrower.
Unpaid Interest - The interest that has accrued on a loan but has not yet been paid.
Unit - A single housing structure within a larger property, such as an apartment or condominium.
Upfront Fee - A fee that is paid at the beginning of a transaction, such as an application fee or origination fee.
Unpaid Balance - The amount of principal and interest that is still owed on a loan.
Unsecured Creditor - A creditor who does not have a claim to specific collateral and relies solely on the borrower's promise to repay.
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Variable Rate - An interest rate that can change over time based on fluctuations in the market.
Valuation - The process of determining the value of a property or asset.
Verification of Employment (VOE) - A process in which a lender verifies the employment and income of a borrower.
Verification of Deposit (VOD) - A process in which a lender verifies the funds in a borrower's bank account.
Vendor - A person or company that sells goods or services to another party.
Verification of Rent (VOR) - A process in which a lender verifies the rental history of a borrower.
Value - The worth or estimated price of a property or asset.
Variable Rate Mortgage (VRM) - A mortgage loan with an interest rate that can change over time.
Vacancy Rate - The percentage of rental properties that are currently unoccupied.
Vesting - The process of transferring ownership of a property from one party to another.
Veterans Administration (VA) Loan - A mortgage loan program available to eligible veterans and their spouses.
Variable Interest - An interest rate that can change over time.
Voluntary Lien - A lien that is placed on a property with the consent of the owner.
Verification - The process of confirming the accuracy or validity of something.
Valuation Fee - A fee charged by a lender or appraiser to determine the value of a property.
Variable Payment - A payment that can change over time, often due to changes in interest rates.
Verification of Income (VOI) - A process in which a lender verifies the income of a borrower.
Vendor Take-Back Mortgage - A mortgage in which the seller provides financing to the buyer.
Value-Added Tax (VAT) - A tax imposed on the value added to a product or service at each stage of production and distribution.
Variable Life Insurance - A type of life insurance policy that allows the policyholder to invest the cash value of the policy in various investment options.
Variable Cost - A cost that changes in proportion to changes in production or sales volume.
Verification of Assets (VOA) - A process in which a lender verifies the assets of a borrower.
Voluntary Termination - The act of voluntarily ending a contract or agreement.
Vacant Land - Land that is not currently occupied or developed.
Value Chain - The series of activities and processes involved in the production and distribution of a product or service.
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Warehouse Line of Credit - A short-term revolving line of credit provided by a financial institution to a mortgage lender to fund the origination of mortgage loans.
Waiver - A voluntary relinquishment or surrender of a right or privilege.
Walk Away - A term used to describe a borrower's decision to stop making mortgage payments and abandon the property.
Warranty Deed - A legal document that guarantees the grantor owns the property and has the right to sell it.
Writ of Execution - A court order that allows a creditor to seize a debtor's assets to satisfy a debt.
Wage Garnishment - A legal process in which a portion of an individual's wages are withheld by their employer to satisfy a debt.
Withdrawal Penalty - A fee charged by a financial institution for withdrawing funds from a time deposit account before the agreed-upon maturity date.
Wire Transfer - A method of electronically transferring funds from one bank account to another.
Wraparound Mortgage - A type of secondary financing in which a new mortgage incorporates the existing mortgage and includes additional funds.
Working Capital - The difference between a company's current assets and its current liabilities, representing the funds available for day-to-day operations.
Wrap Fee - A fee charged by an investment advisor for providing a comprehensive range of services, including investment advice and portfolio management.
Write-Off - The act of removing an asset or liability from a company's books as a result of it being deemed uncollectible or of no value.
Wage Assignment - A voluntary agreement in which an employee authorizes their employer to deduct a portion of their wages to repay a debt.
W-2 Form - A tax form that reports an individual's annual wages and the amount of taxes withheld by their employer.
Withholding - The process of deducting income tax from an employee's wages and remitting it to the appropriate tax authorities.
Working Capital Loan - A type of loan that provides short-term financing to cover a company's day-to-day operational expenses.
Wholesale Lender - A lender that provides mortgage loans to mortgage brokers or other financial institutions, rather than directly to borrowers.
Wrap Fee Program - A fee-based investment program in which an investor pays a single fee that covers investment advice, portfolio management, and transaction costs.
Wage Earner Plan - A type of bankruptcy plan that allows individuals with regular income to repay their debts over time.
Wraparound Insurance - An insurance policy that provides coverage for multiple properties or risks under a single policy.
Working Capital Ratio - A financial ratio that measures a company's ability to meet its short-term obligations.
Warehouse Receipt - A document issued by a warehouse operator that serves as evidence of ownership of goods stored in the warehouse.
Warrant - A financial instrument that gives the holder the right, but not the obligation, to buy or sell a specific asset at a predetermined price within a specified period.
Waiver of Subrogation - A provision in an insurance policy that waives the insurer's right to seek reimbursement from a third party for a covered loss.
Wage Levy - A legal process in which a portion of an individual's wages are withheld by their employer and paid directly to a creditor to satisfy a debt.