| A | B |
|---|
| Annual Fee | Fee charged by a credit card company for the use of their credit card. |
| Annual Percentage Rate | cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan. |
| ARM | home loan secured by a deed of trust or mortgage in which the interest rate will change periodically; typically adjusted based on a published index such as the Treasury bill or LIBOR; brought on as a result of high interest rates in the early 1980's as a way for banks to transfer the risk of higher interest rates to the consumer. |
| Balloon Mortgage | home loan in which the sum of the monthly payments is insufficient to repay the entire loan; a final payment comes due, which is a lump sum of the remaining principal balance. |
| Credit | money owed |
| Credit Card | tool used to finance a purchase |
| Credit Limit | refers to the maximum amount of credit a financial institution extends to a client through a line of credit as well as the maximum amount a credit card company allows a borrower to spend on a single card. |
| Debit Card | type of card, often bearing the seal of a major credit card company, issued by a bank and used to make purchases; money comes directly out of bank account. |
| Debt Consolidation | act of combining all debts into one monthly payment, typically extending the terms and the length of time required to repay the debt. |
| Debt Snowball | preferred method of debit repayment; includes a list of all debts organized from smallest to largest balance; minimum payment are made to all debts except for the smallest, which is attacked with the largest possible payments. |
| Depreciation | a decline in the value of property; the opposite of appreciation. |
| Finance Charge | any fee representing the cost of credit, or the cost of borrowing. |
| Foreclose | process by which the holder of a mortgage sells the property of a homeowner who has not made interest and/or principal payments on time as stipulated in the mortgage contract. |
| Grace Period | time period durng which a borrower can pay the full balance of credit due with no finance charges. |
| Home Equity Loan | credit line offered by mortgage lenders that allows a homeowner to borrow money against the equity in their home. |
| Introductory Rate | is an interest rate charged to a customer during the initial stages of a loan. |
| Lease | a long-term rental agreement, and a form of secured long-term debt. |
| Loan Term | The amount of payments it takes to pay off the loan. |
| Paradigm | your belief system; the way you see or perceive things. |
| Tax deduction | the effect of a tax deduction, such as charitable contributions and mortgage interest. |
