401(k) - A 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pretax basis
403(b) - A 403(b) tax sheltered annuity (TSA) plan is a retirement plan offered by public schools and certain 501(c)(3) tax exempt organizations. It can enhance and protect your retirement security
457(b) - Like 403(b) plans, 457(b) plans operate with an employer plan that defines how the plan operates and the products and vendors that are available. Unlike a 403(b) plan, the 457(b) plan must be held in a trust for the exclusive benefit of the plan's participants and beneficiaries or offer qualified annuities for the benefit of the participant
- A -
Accrued Interest - Interest that has been earned, but not yet paid.
Adjustable Rate - An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.
Annual fee - The amount a cardholders pays to a credit card company for the right to hold a particular credit card.
Amortization - The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time.
Annual Percentage Rate (APR) - The cost of credit for personal loans, including mortgages, expresses as a percentage per year.
Annuity - A contract that pays out for a stated period or life. This plan is designed to liquidate funds.
Appreciation - An increase in the value of a property due to changes in market conditions or other causes.
Asset - Things you own, including real estate, investments, and personal property. Anything of worth that is owned.
- B -
Bankruptcy - State of being unable to pay debts.
Bear Market - An extended period of general price decline in the stock market as a whole.
Before Tax Income - Income before taxes are deducted.
Beneficiary - The person designated to receive the income from a trust, estate, or deed of trust.
Blue Chip Stock - A common stock which is issued by larger, well-established corporations.
Bond - Bonds are debt and are issued for a period of more than one year. When an investor buys bonds, he or she is lending money.
Budget - A financial plan for saving and spending money.
Bull Market - An extended period of generally rising prices in the market as a whole.
- C -
Capital Gain - Profit from the sale of investment or asset.
Certificate of Deposit (CD) - A deposit made, usually to a bank or credit union, for a specified amount of time for a specified interest rate.
Collateral - An asset that can be repossessed if a borrower defaults. Assets pledged as security for a loan.
Combined loan-to-value (CLTV) - The unpaid principle balances of all the mortgages on a property (first and second usually) divided by the property value.
Conforming Loan - Generally, a mortgage loan under $417,000.
Contract - An oral or written agreement to do or not to do a certain thing.
Credit - Money loaned. A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some later date.
Creditor - Lender of money.
Credit Report - A report of an individual's credit history prepared by a credit bureau and used by a lender in determining the borrower’s creditworthiness.
Currency - Money.
- D -
Debt - Money borrowed.
Debt consolidation - The replacement of multiple loans with a single loan.
Debt elimination - Plan of action to pay-off all debt.
Default - Failure to make timely payment of interest or principle on a debt.
Depreciation - A decline in the value of property.
Dow Jones Industrial Average - A composite average of 30 industrial stocks chosen by Dow Jones as representative of stock market activity.
- E -
Equity - The amount of ownership that has been built up by the holder of the mortgage through payments and appreciation.
Escrow - A trust account held in the borrower's name to pay obligations such as property taxes and insurance premiums.
- F -
Fair Credit Reporting Act - A consumer protection law that regulates the disclosure of consumer credit reports by consumer/ credit reporting agencies. It also establishes procedures for correcting mistakes on one's credit record.
Financial Planner - A person who analyzes an individual's personal finances to help them establish a personal financial strategy.
Fixed Rate - An interest rate which is fixed for the term of the loan. Payments as well are fixed at one amount.
FHA Loan - More appropriately termed "FHA Insured Loan." A loan for which the Federal Housing Administration insures the losses the lender may incur due to your default.
Foreclosure - The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgage. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to debt.
- G -
Grace Period - A period of time during which a loan payment may be paid after it is due date but not incur a late penalty.
Gross Income - The income before taxes or expenses are deducted.
- I -
Inflation - A general increase in the price level of goods and services.
Interest - The cost for the use of borrowed money.
Interest Rate - The periodic change, expressed as a percentage, for use of credit.
- J -
Jumbo Loan - Mortgage loans over $417,000.
- L -
Liabilities - Money owed.
Loan to Value Ratio (LTV) - A ratio determined by dividing the sale price or appraised value into the loan amount.
- M -
Mortgage- A mortgage is a legal contract that describes the term of the loan obtained to buy a piece of property.
- N -
Net Income - The income of you have after you've paid taxes and any and all other liabilities.
Net Worth - The amount of wealth calculated by taking the total value of assets owned and subtracting all liabilities.
- P -
PITI - Principle, Interest, Taxes and Insurance, which comprise your monthly mortgage payment.
Points - The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the amount of loan.
Principle - Amount of debt, not including interest. The face value of the loan.
Property Taxes - Taxes assessed on real estate.
- S -
Seller Carry Back - An agreement in which the owner of a property provides financing.
Stock - Shares of ownership in a company.
- T -
Title - The written evidence that proves the right of ownership of a specific piece of property.
Total Debt Ratio - Monthly debt and housing payments divided by gross monthly income.
Truth-in-Lending Act - A federal law requiring a disclosure of credit terms using a standard format.
- U -
Underwriting - The process of verifying data and approving a loan.
- V -
Variable Rate - An interest rate that changes periodically in relation to an index.