|
|
| 1 year adjustable (ARM) A loan with a fixed rate for the first 1 year that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 1 year, the monthly payment may also change. |
| 10 year adjustable (ARM) A loan with a fixed rate for the first 10 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 10 years, the monthly payment may also change. |
| 10 year fixed A loan with the same interest rate and payment over the entire 10 year life of the loan. As one of the shorter loan terms available, 10 year fixed loans offer lower lifetime interest payments than similar loans with longer terms, but you also have a higher monthly payment. |
| 15 year fixed You generally pay a lower interest rate with a 15 year loan. You will pay less interest and build equity quickly. |
| 2 year adjustable (ARM) A loan with a fixed rate for the first 2 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 2 years, the monthly payment may also change. |
| 20 year fixed The 20 year fixed loan is a good way to have fixed payments and shorten the term of your loan. You will build equity faster, pay less interest, and own your home sooner. Your monthly payments will be higher since the term is shorter. |
| 25 year fixed A loan with the same interest rate and payment over the entire 25 year life of the loan. As one of the longer loan terms available, 25 year fixed loans offer lower payments, but you will pay more in interest over the life of this loan than a similar loan with a shorter term. |
| 3 year adjustable (ARM) A loan with a fixed rate for the first 3 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 3 years, the monthly payment may also change. |
| 30 year fixed The 30 year fixed is one of the most popular loans. Many people like the fixed interest rate and lower monthly payments. But since the term of the loan is long, you will pay more interest over the life of the loan. |
| 40 year fixed A loan with the same interest rate and payment over the entire 40 year life of the loan. As one of the longer loan terms available, 40 year fixed loans offer lower payments, but you will pay more in interest over the life of this loan than a similar loan with a shorter term. |
| 5 year adjustable A loan with a fixed rate for the first 5 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 5 years, the monthly payment may also change. |
| 5 year balloon mortgage The payment is calculated over a stated term and the balance must be repaid or refinanced at the end of the 5th year. |
| 7 year adjustable (ARM) A loan with a fixed rate for the first 7 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 7 years, the monthly payment may also change. |
| 7 year balloon mortgage The payment is calculated over a stated term and the balance must be repaid or refinanced at the end of the 7th year. |
| Abstract (of Title) A summary of the public records relating to the title to a particular piece of land. If there are any title defects they must be cleared before a buyer can purchase clear, marketable, and insurable title. |
| Acceleration Clause Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire balance of the loan should you default on you loan. |
| Accrued Interest Interest that has accumulated from one payment-due date to the next. Also, the total amount of interest paid on a loan over time |
| Acquisition Fee A fee charged by a dealer to begin a lease. Also known as a bank fee if the lessor is a bank, or an initiation fee. Acquisition fees start at about $300 and are seldom negotiable. |
| Add-Ons Products or services added by dealerships. Common examples are pinstriping, rustproofing, alarm systems, electronic equipment, and extended warranties. Add-ons can really drive up the sticker price of a vehicle, but their actual cost is usually negotiable. |
| Adjustable Rate Mortgage (ARM) A mortgage in which the interest rate is adjusted periodically based on an index. Also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage. |
| Adjustment Interval On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, usually one, three or five years. |
| Advertising Fee An amount charged the buyer to cover the cost of national and local advertising. Many experts suggest that this fee should be no more than 1.5 percent of the manufacturer's suggested retail price (MSRP). |
| Affiliate An entity related to a Seller that is subject to common operating control and that is operated as part of the same system or enterprise. The Seller typically owns less than a majority of the voting stock or the Seller and the entity are subsidiaries of a third party. |
| Affordable Gold 5 Mortgage with less than or equal to 95 percent LTV, when at least 5 percent of the down payment comes from the borrower's personal cash. |
| Affordable Gold 97 Mortgage with greater than 95 percent loan-to-value (LTV) ratio but less than or equal to 97 percent LTV, when at least 3 percent of the down payment comes from the borrower's personal cash. |
| Affordable Product Type Choice of loan determined under the Affordable Gold program. Indicates whether to submit the loan under the Affordable Gold program and, if so, which type of program. |
| Affordable Seconds Subsidized secondary financing or other financial assistance provided under an established, documented secondary financing or financial assistance program that has formal procedures in place to provide applicant qualification, loan processing, and loan program administration on an ongoing basis. |
| Agreement of Sale Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms spelled out in writing and signed by both parties. |
| Amortization The gradual reduction of a debt by periodic payments of interest and principal that are large enough to pay off a loan at maturity. The loan is repaid through regular, monthly payments of principal and interest paid for a predetermined amount of time. |
| Amount Financed The part of a vehicle's cost that a lender supplies. To determine the amount financed, multiply the purchase price by the interest rate; subtract that amount from the purchase price; add state purchase tax to that remainder; then subtract the down payment. Put differently, AF = purchase price - (purchase price X interest rate) + tax - down payment. |
| Annual Fee A credit card issuer may charge you a fee each year for your account. |
| Annual Percentage Rate (APR) The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage of the loan amount. Unlike an interest rate, however, it includes other charges or fees to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR in large, bold print. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the cost of loans. |
| Application A written statement of personal and financial information that is required to approve a loan. Note that application fees are usually required for home loans but not for auto loans. |
| Appraisal A written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming. An appraisal of an auto is usually not necessary because auto dealers, sellers and buyers all have quick access to the market value of autos. |
| Appraisal Fee The charge for estimating the value of property. |
| Appraiser Network Group of licensed/certified individuals or entities contracted to perform property value assessments. |
| Appreciation The increase in value of a home or other asset as a result of an increase in the market. |
| Asking price The price requested by a seller when a home or property is listed for sale. This amount is often open to negotiation. |
| Assessment Fees In condominium living, additional fees charged to unit owners to pay for any maintenance and repair that exceeds the budget of monthly condo fees. These fees are determined by the condominium association and can be levied at any time. |
| Assessment Report Report that appraisers use to record property values, marketability analyses and any pertinent comments regarding the subject property. Assessment reports are classified as appraisal reports or inspection reports. |
| Assessment Upgrade Approved recommendation from an appraiser that you must use a more comprehensive type of assessment. An example of an upgrade recommendation includes any adverse/atypical findings or other atypical property or neighborhood condition observed by the appraiser. You must also upgrade an assessment when its value does not support the loan transaction; the appraiser is unable to view the subject property from the public street; the assessment is "subject to" completion; or repair or property rights are leasehold. |
| Asset Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). A lender is very interested in the amount and value of any assets you may have because assets can be used as collateral against a loan. Along with other factors such a a borrower's credit rating, assets are also used to help determine the amount of the loan. |
| Assumable Mortgage An assumable mortgage is a mortgage that allows you to take over a mortgage on a home you are buying or allows a buyer to take over your mortgage if you are selling your house. The advantage of this is that you assume a mortgage that has a lower interest rate than current rates, and you avoid high closing costs. |
| Assumption The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt. |
| Automated Teller Machines (ATMs) Electronic terminals through which customers may make deposits, withdrawals, or other transactions as they would through a bank teller. |
| Automated Underwriting Automated underwriting is used to offer instant decisioning regarding your loan request. Automated underwriting is similar to instant offer service. You are usually required to provide additional information to the lender to close your loan. |
| 2 | 3 | Next >> |
