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Alphabetical Order

A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W-X-Y-Z

Actual Cash Value Coverage
Homeowner's insurance that pays only the present, depreciated value of furniture and other household properties when they are damaged or destroyed. Provides less security than replacement-cost coverage.

Adjustable Rate Mortgage (ARM)
A loan in which the interest rate is tied to an economic index and fluctuates with the market. ARMS are risky because they may start quite low and then of course, rise substantially increasing the monthly payments. ARMS have been very popular the last few years with people starting with interest rates around 3 percent.

Adjusted Balance
An interest calculation method used by some creditors, in which they subtract all payments made during the month, then add the calculated finance charges.

Adjusted Gross Income (AGI)
The amount of your income that is taxable. AGI consists of your gross income from taxable sources minus certain items, such as payments to a Keogh plan or a deductible Individual Retirement Account. AGI minus deductions and personal exemptions equals your taxable income.

Adversary Proceeding
A lawsuit filed in bankruptcy court related to the debtor's bankruptcy case. Examples are complaints to decide on the ability to discharge a debt and complaints to determine the extent and validity of the liens.

Affinity Card
A credit card offered by two types of organizations, one a lending institution, the other a non-financial group. Schools, non-profit groups, pro wrestlers, popular singers, and airlines are among those featured on affinity cards. You may be entitled to special discounts or deals from the non-financial group. See co-branded cards.

Amortization
The gradual cut of debt by periodic payments (for a specified period of time), usually large enough to cover interest and principal.

Annual Fee
Some credit card issuers charge a yearly fee for giving you credit normally around $15 to $55.

Annual Percentage Rate (APR)
The APR is a measure of the cost of credit in terms of a yearly interest rate. The lower the APR, the less interest you pay. Some offers have a time limit. Your APR could be much higher after the initial limited offer.

Annuity
Regular broken up payments made by an insurance company for a specified time period.

Application Fee
A one-time fee charged by the mortgage company for processing your loan application. Sometimes this fee may be applied toward other costs, such as an appraisal or credit report.

Appraisal
A written estimate by a professional of the market value of property.

Appreciation
The increase of an investment's value over time.

Arrears
The quantity that is unpaid and overdue as of the date the bankruptcy case is filed. This word is usually used when speaking about back child support, back alimony owed, or the quantity that is past due on mortgage payments (including interest and penalties).

Asked Price
The lowest amount at which an shareholder is willing to sell a security or commodity.

Assessed Value
A public tax assessor's appraisal of the value of an asset to calculate tax.

Asset Allocation
Dividing investments among various asset groups.

Asset Management Account
An account at a brokerage firm or bank that includes the services of both. Asset management accounts usually offer check-writing privileges, credit or debit cards, and automatic transfers from one account to another. They often charge an annual fee.

Assets
Things you own, including real estate, investments, and personal property.

ATM
Automatic Teller Machine.

Authorized User
Any person who has permission to use a credit card account.

Automatic Stay
A ruling the stops lawsuits, foreclosure, garnishments and all collection activity against a debtor the specific date a bankruptcy petition is filed. By filing bankruptcy, an individual or individuals can relieve or reorganize themselves of debts and accountabilities.

Average Daily Balance
An interest calculation method used by credit card issuers usually determined by adding each day's balance and dividing that total by the number of days in the billing cycle. The average daily balance is then multiplied by a credit card's specified periodic rate to calculate interest due.

Avoidance
The Bankruptcy Code allows the debtor to avoid some kinds of liens that interfere with an exemption claimed in the bankruptcy. Most judgment liens that have attached to the debtor's home can be eliminated if the total of the liens (mortgages, judgment liens, and statutory liens) is more than the value of the property in which the exemption is claimed. This may be known as lien stripping.

Avoidance Powers
A Rights given to the bankruptcy trustee or the debtor in possession to recover certain transfers of property such as preferences or fraudulent transfers or to void liens created before the commencement of a bankruptcy case.

Balance Sheet
A listing of assets, liabilities, and net worth from a specific date. "Balance" refers to the idea that assets equal liabilities plus net worth.

Balance Transfer
Process of moving an unpaid credit card debt from one credit card issuer to another.

Balance Transfer Fee
Fee charged customers for transferring one outstanding balance to another credit card.

Balanced Funds
The process of moving unpaid credit card debt from one creditor to another.

Bank
A commercial institution licensed as a deposit taker. Banks are mainly associated with making and receiving payments, and supplying short-term loans to private individuals.

Bankruptcy
Bankruptcy is the final solution. Negative credit information stays on a credit report for seven years, however, bankruptcies stay on a credit report for 10 years. Bankruptcy provides someone deeply in debt with a “fresh start” either by eliminating debt to the extent possible under (Chapter 7 taxes and student loans are not forgiven) or reorganizing the debt (Chapter 13).

Bankruptcy Code
Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is, with the exception of exemptions, the same in every state. When federal bankruptcy law conflicts with state law, federal law controls.

Bankruptcy Estate
The estate is all of the legal and equitable interests of the debtor as of the commencement of the case. From the estate, an individual debtor can claim certain property exempt; the balance of the estate is liquidated in a Chapter 7 to pay the administrative costs of the proceeding and the claims of creditors according to their priority.

Basis Point
One hundredth of One percent (.01%).

Bear Market
A term used to describe the stock market when prices of securities are declining.

Beneficiary
A person who receives or is designated to receive assets from a will, insurance policy, trust, retirement plan, etc.

Bequeath
Transferring property to named heirs through a will.

Bid Price
The amount for which a buyer is willing to pay for a security or commodity.

Billing Cycle
The number of days between the last credit card statement date and the present statement date.

Billing Statement
The monthly bill sent by a creditor. It gives a summary of activity that took place on an account, including balance, purchases, payments, credits, and finance charges.

Biweekly Mortgage
A mortgage on which the borrower pays half the monthly payment every two weeks, resulting in a total of 13 annual mortgage payments and an accelerated payoff.

Blue Chip
Stock of a large, well-established company that has proven to be without fail profitable.

Bodily Injury Liability Coverage
The part of a car insurance policy that provides coverage against injuries caused to other people by the insured.

Bond
A certificate of debt originated by a company or the government. Bonds usually pay a specific rate of interest, and pay back the original investment after a specified period of time.

Bond Fund
An income-producing mutual fund made up with corporate, municipal, or government bonds.

Broker
A person or firm that charges a fee or commission to act as a go between for buyers and sellers of securities or property.

Budgeting
A budget is a plan for how much money you have available and how much money you have to spend. Your income minus your fixed costs (rent or mortgage, car payment, electricity, water etc., credit card payments) provides you with the amount of money you have after your bills have been paid to spend on other things.

Bull Market
A term used to describe the stock market when prices of securities are rising.

Call
An option that allows its owner the right to buy a specified amount of a security or commodity at a certain price within a specified time period. The opposite of a put.

Call Price
The price at which a call-able security can be redeemed by the issuer.

Callable Bond
A security that may be cashed in by the issuer before maturity. The term relates to bonds or preferred stocks.

Cap
The maximum amount that an interest rate can increase on an adjustable-rate mortgage, or the maximum amount of interest that can be paid on a bond issue.

Capital Gain
Profit from the sale of an asset or security.

Capital Growth
A raise in the market price or value of an asset.

Capital Loss
Loss from the sale of a security or asset.

Capital Stock
The shares representing ownership interest in a business, including preferred and common stock.

Capitalized Cost
The value of an asset used to calculate reduction.

Card Holder Agreement
A term used to describe the stock market when prices of securities are rising.

Cash Advance Fee
Charge by the bank for using the credit card to get cash.

Cash Flow
The variation between what you earn and your expenses.

Cash Value Life Insurance
Life insurance coverage that uses a tax-deferred savings component in addition to providing a certain death benefit.

Certificate of Deposit (CD)
An FDIC-insured investment that guarantees a specific rate of interest for a specified time period.

Certificate of Title
A document issued by the local government to a homeowner, naming the homeowner as the owner of a specific property. At the sale of the property, the title is transferred to the new owner and a new certificate is issued with the name of the new owner.

Certified Financial Planner (CFP)
Someone certified by the Institute of Financial Planners to give financial advice.

Certified Public Accountant (CPA)
Title from the American Institute of Certified Public Accountants awarded to those who pass their exam and meet specific accounting related work experience requirements.

Chapter 7
A type of bankruptcy filing provided for under United States Federal Law where a consumer is entitled to a fresh start. Chapter 7 may eliminate most types of unsecured debt, usually used by someone without assets.

Chapter 11
A reorganization proceeding in which the debtor may continue to be in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which the debtor will pay creditors' claims in whole or in part.

Chapter 12
A basic reorganization plan for family farmers whose debts fall within specific limits. Chapter 12 wasn't renewed when it expired this session of Congress.

Chapter 13
Interest-free debt repayment plan in which you consolidate debts and make payments on your debt over a three to five year period. This is often used to save a house from foreclosure or to save a car from repossession.

Charge Card
A card that requires a full payment of the charge by the due date. Unlike credit cards, charge cards do not consumers to carry a balance, and interest isn't charged. American Express is an example of a charge card.

Charge-Off
Creditor does not expect a debt to be repaid and lists the debt as such. Does not mean that the debtor is not liable for the debt or that attempts to collect will cease.

Check Card
A plastic card that automatically withdraws funds from your checking account instead of a check, for purchases or cash.

Classic Card
Brand name for the regular card issued by VISA.

Closing
Finalizing the sale of property, including the transfer of title from the seller to the buyer. Also known as settlement.

Closing Costs
Fees and other expenses that must be paid by buyers and sometimes sellers when transferring ownership of a property. Costs typically include a loan origination fee, attorney's fee, advance on taxes (which is placed in an escrow account), title insurance fees, recordation and transfer taxes, and other fees. Also called settlement costs.

Co-Branded Cards
A type of affinity card issued through a partnership between a bank and a retail company.

Collateral
The property that is subject to a lien as for repayment of a debt or performance of a contract. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by the guarantee or collateral.

Collection Agency
A company hired by a creditor to collect a debt that is owed. Creditors hire a collection agency only after they have made efforts to collect the debt themselves, usually through letters and telephone calls. The Federal Fair Debt Collection Practices Act monitors collection agencies.

Collision Insurance
The type of auto insurance that covers damage to your vehicle, resulting from a collision with another vehicle or object.

Commission
Payment to a broker for acting as an agent in the purchase or sale of securities or property.

Common Stock
Stock, other than preferred stock, that does not pay dividends at a set rate, but offers a higher possible return.

Community Property
A Refers to assets or a type of ownership. Generally, it means that each spouse owns a 50 percent interest in an account. Upon the death of one spouse, the survivor claims his or her ownership of one-half of the asset. The other half will pass in accordance to a will or to law. Every state has different regulations and explanations.

Compound Interest
Payment of interest, not only on principal investment, but also on the interest collected during previous periods.

Comprehensive Insurance
The type of auto insurance which covers damage to your vehicle, caused by occurrences other than a collision, such as flood, fire, hail, theft, or vandalism.

Confirmation
A The process by which a bankruptcy judge approves a plan for reorganization for a debtor in a Chapter 13 case.

Conforming Loan
A straightforward mortgage that conforms to the loan amounts and mortgage guidelines used by the Federal National Mortgage Association (FNMA or "Fannie Mae"), and/or the guidelines of The Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac").

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Provides consumers with the right to buy continuing health insurance through their former employers for a minimum of 18 months. COBRA also offers up to 36 months of continuing coverage for those people insured through a spouse's work plan who lose that coverage due to divorce, separation, or death of the spouse.

Consolidation Loan
A single loan acquired to pay off multiple loans. A consolidated loan may offer a lower monthly payment but a longer repayment period. Also known as debt consolidation.

Consumer
One who buys goods or services.

Consumer Credit Counseling
A form of credit assistance for financially distressed consumers who need help managing finances. Also called debt relief.

Contingency
A condition that must be met before a contract is legally binding. Buyers and sellers often each add several contingencies.

Contract
An oral or written agreement to do or not to do something.

Conventional Mortgage
A regular loan that may be privately insured, but is not insured or guaranteed by the government.

Conversion
Cases under Bankruptcy Code may be changed from one chapter to another chapter. An example would be if a Chapter 7 case were converted to a Chapter 13 case if the debtor is eligible for Chapter 13. Even though, the Chapter of the Code that governs it changes, it stays the same case as it was originally filed.

Corporate Bond
A bond originated by a corporation.

Co-Signer
A person who signs the promissory not that is also signed by more or other parties. All parties take responsibility for the debt in the event that any of the others default.

Credit
Credit is more than just a plastic card used to acquire goods and services. It's about a financial institution/department store trusting you to pay for goods or services that you have received. In addition to the cost of the goods or services that you have purchased, you will owe a percentage of what you spent (interest) and in some instances, an annual fee.

Credit Bureau (Credit Reporting Agency)
A company that collects and sells information about how consumers manage credit. The three major credit bureaus are Equifax, Experian, and Trans Union.

Credit Card
A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit. The amount of credit granted and interest rate are determined by the borrower's credit worthiness. A card that allows you to purchase items without cash and delays the payment for about 25 days. Some credit cards carry annual fees, and all assess interest for charges that are not paid by the end of the grace period. Other charges and fees may apply.

Credit counseling
There are a number of non-profit organizations that offer assistance in budgeting and debt management. Such organizations work with creditors to implement a debt repayment plan.

Credit History
Held by a credit bureau, this record shows a person's line of credit and debt repayment history. Lenders use it to help determine if a potential borrower is a good risk.

Credit Insurance
An insurance policy that pays off debts if the borrower loses their job, dies, or becomes disabled.

Credit Limit
The maximum amount of credit given to a borrower.

Credit Report
Your credit payment history is recorded in a file or report. These files or reports are maintained and sold by consumer reporting agencies (CRAs). One type of CRA is commonly known as a credit bureau. There are three major credit bureaus Experian, Trans Union, and Equifax. If you have ever applied for a credit or charge account, a personal loan, insurance or a job, you have a credit record on file at a credit bureau. Your credit record contains information about your income, debts and credit payment history. It also shows whether you have been sued, arrested or have filed for bankruptcy.

Credit Score
Creditors use credit scoring to evaluate your credit record. This involves using your credit application and report to obtain information about you, such as your annual income, outstanding debt, bill-paying history, and the number and types of accounts you have as well as how long these accounts have been open.

Creditor
A person or business that a debtor owes money to.

Creditworthiness
Past and future ability to repay debts.

Customer service
If you have a problem with your billing statement, your credit card has been lost or stolen, a 24-hour toll-free telephone is listed so that you may speak with a representative and take the appropriate action.

Daily Periodic Rate
The interest rate factor used to calculate interest charges on a daily basis. The factor equals the annual percentage rate divided by 365. See periodic rate.

Debit Card
A bankcard with direct access to a cardholder's account, usually a checking or savings account. The card acts like a check, with the money withdrawn from the existing account balance.

Debt
An amount of money that a consumer owes to one person or firm.

Debt Service
The sum of monthly payments required on credit cards, installment loans, home equity loans, and other debts, but not including payments on the loan applied for.

Debtor
A person who is liable to another for money.

Debt-to-Income Ratio
A measure of creditworthiness that calculates your debts as a percentage of income, and is calculated by dividing the total of your long-term debt payments by your gross income.

Debit card
This card allows you to access the money in your checking or savings account electronically while making purchases.

Deductible
Under an insurance policy, the amount of loss or expense for which the insured is responsible before the insurance company begins paying.

Deed
A legal document that presents title to real property.

Deed in Lieu (of Foreclosure)
When a homeowner can't make the mortgage payments and can't find a buyer for the house, the lender may accept ownership of the property in place of the money owed on the mortgage.

Default
When a debtor fails to make payments within a specific period of time ruled by the original contract.

Defendant
A person charged in a legal action.

Deferred Annuity
An annuity that delays payments until the holder elects to receive them.

Defined Benefit Plan
A traditional pension plan, which pays retirees a fixed monthly amount based on length of service, salary, and age.

Defined Contribution Plan
An employer-sponsored retirement plan in which contributions are fixed on an annual or periodic basis. Benefits provided to participants are determined solely by the return on investment.

Deflation
A decrease in the prices of goods and services.

Delinquency
Failure to make payments when they are due. In most mortgages, payments are due on the first day of the month. Even though, they may not charge a late fee for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more or the credit bureaus.

Depreciation
Decrease in the value of an asset over time.

Derivatives
Financial instruments with returns that move in response to some underlying asset or directory.

Digital Certificate
A digital certificate is an electronic document, which confirms the identity of the owner of a public key.

Disability Insurance
Insurance that replaces your income if you're unable to work for an extended period due to illness or injury.

Discharge of Debts
The legal term for the order to eliminate a debt through a bankruptcy case. A bankruptcy court's erasure of the debts of a person or business that has filed for bankruptcy.

Dischargeable Debts
Debts that can be eliminated in bankruptcy. Most debts incurred prior to declaring bankruptcy are dischargeable, including back rent, credit card bills, and medical bills. Certain debts are not dischargeable and may not be eliminated through bankruptcy or may only be discharged through Chapter 13. Family support and criminal restitution are examples of debts that cannot be discharged. Debts incurred by fraud can only be discharged in Chapter 13.

Discount
The degree to which the price of an asset is lower than its face value.

Discount Bond
A type of bond that is sold for less than face value. The difference between the purchase price and the face value is the interest received by the investor.

Diversification
The distribution of investment dollars among a variety of different assets or securities in a portfolio to lower the potential risk or adverse impact of any single assets poor functioning.

Dividends
Payment made by a company to its stockholders that is usually a portion of profits.

Dollar Cost Averaging
Investing a fixed sum at regular intervals, regardless of the share price, to reduce timing risk.

Dow Jones Industrial Average
Widely quoted stock index composed of 30 blue-chip stocks. The value of this index, which does not include dividends, is calculated daily.

Down Payment
The portion of the purchase price usually paid immediately upon purchase, in the form of cash or trade-in value.

Durable Power of Attorney
A legal document that allows someone to appoint an attorney in fact to conduct personal and financial business, even in the event of legal incompetence. It expires upon the giver's death.

Earnest Money
A deposit paid up front as part of a purchase price, to reveal good faith on the part of the buyer.

Electronic Fund Transfer (EFT) Systems
A variety of systems and technologies for transferring funds electronically rather than by check.

Endorsement
A provision added to an insurance policy to add to or alter the existing coverage. May be referred to as a rider.

Equity
Ownership interest in an asset. Equity is the difference between the value of the property and the amount still owed on its mortgage and other liens. Also, a security that is based on an ownership interest.

Escrow
When a neutral third party holds documents, money, or other property until agreed upon conditions are fulfilled.

Estate
All property owned by an individual at death.

Estate Planning
Arranging to make sure your assets pass in an orderly and efficient manner to those who you want to have them after your death.

Estate Taxes
Taxes by federal and state governments on the transfer of your assets after you die.

Executor
A person named in a will to oversee the distribution of an estate.

Exempt
Property that is removed from the bankruptcy estate and is not available to pay creditors' claims. The debtor picks the property to be exempted from the statutory lists of exemptions available under his state's laws. The debtor may keep exempt property to make a fresh start after bankruptcy.

Exemptions
The lists of the types and values of property that is legally unreachable to creditors or the bankruptcy trustee. Property exempted is determined by state and federal rulings, and varies from state to state.

Fair Market Value
The highest price a buyer, willing but not forced to buy, would pay, and the lowest a seller, willing, but not forced to sell, would accept. In a foreclosure a borrower in default under a mortgage is left without his or her interest in the mortgaged property. This involves a forced sale of the property at a public auction with the proceeds of the sale applied to the mortgage debt.

Federal Deposit Insurance Corporation (FDIC)
An agency created by the federal government that protects depositors against losses from the financial closure of a bank.

Federal Insurance Contributions Act (FICA)
Law that orders employers to withhold Social Security and Medicare taxes from wages.

Federal Reserve System
The nation's central banking system, put together by Congress to help provide the United States with a safe and stable monetary and financial system. It regulates U.S. monetary policy, and has the power to influence key, short-term interest rates, and control the amount of money and credit flowing through the U.S. economy

FHA Mortgage
A mortgage on which the Federal Housing Administration insures the lender against loss. The borrower pays the mortgage insurance premium.

Fiduciary
A person entrusted with duties on behalf of another. The law mandates the highest level of good faith, loyalty, and thoroughness of a fiduciary, more than the common duty of care that will all regularly give one another. The debtor is possession in a Chapter 11 is a fiduciary for the creditors, owing loyalty to the creditors and not the shareholders of the debtor.

Finance Charge
The cost for using credit, put together with interest costs and other fees.

Finance Company
A business that makes consumer loans. The interest rates charged by a finance company may be higher than those charged by other creditors, and credit criteria may be more relaxed, allowing those with problem credit to qualify.

Financial Planner
A financial adviser, ideally with broad knowledge of all areas of personal finance. Fee-only planners are paid solely by their clients—that is, they do not receive sales commissions or other compensation from other sources. Fee-plus-commission planners charge fees for advice and other services, and also on the sale of investment and insurance products. See certified financial planner.

First Mortgage
The first-priority claim against real property in the event the borrower defaults on the loan.

Fixed Annuity
Guaranteed payments fixed over the life of the annuity.

Fixed Rate Mortgage
A mortgage on which the interest rate is specified in the loan contract, and remains unchanged throughout the term of the mortgage loan.

Flexible Spending Account
An employer-sponsored benefit that allows employees to have pretax dollars withheld from their salaries to pay for medical expenses that are not reimbursed by employers and dependent-care expenses, such as babysitting or eldercare fees.

Float
In a mortgage transaction, the option which the borrower may exercise to allow the rate and points to vary with changes in market conditions, rather than to "lock in" those prevailing at that time. Also, in securities, the number of shares outstanding and available for trading. In banking, the time between deposit and payment of checks. In credit, the time between a charge purchase and the date on which payment is due.

Forbearance
Voluntarily holding back from doing something, such as defending a legal right. For example, a creditor may forbear on its right to collect a debt by temporarily postponing or reducing the borrower's payments.

Foreclosure
A legal action taken to terminate a homeowner’s right and interest in a property so that the property may be sold to pay off debt.

401(k) Plan
A contribution plan for employees as offered by their employers. (Not all employers offer such plans). You may contribute to a maximum amount as determined by the government. Some employers match contributions to a certain dollar amount or percentage.

Fraud
A dishonest and unlawful practice.

Full Faith and Credit
An unconditional commitment to pay interest and principal on debt; usually issued or guaranteed by the U.S. Treasury.

Garnishment
A court-ordered debt collection in which a portion of a person's salary is paid to the creditor. The process by which a judgment creditor seizes money, which is owed to his judgment debtor, from a third party, called a garnishee.

General Unsecured Claim
A creditor's claim without a priority for payment for which the creditor doesn't hold a security or collateral. If the available funds in the estate continue beyond payment of unsecured claims, the claims are paid in proportion to the size of the claim relative to the total of claims in unsecured claims.

Gold Card
A credit card that offers a bigger line of credit, generally $5,000 and up, than a standard card. Income requirements are higher, usually a $35,000 minimum. In addition, issuers provide extra perks or incentives to cardholders.

Good Faith Estimate
An initial estimate of the fees associated with closing a loan that is given to you within three business days of turning in a loan application.

Government Bond
A bond issued by the U. S. government.

Grace Period
This is the length of time between the date of the credit card purchase and the date the company starts charging you interest.

Graduated Payment Mortgage (GPM)
A type of mortgage that allows for a lower initial payment that goes up over time, and then levels off. The difference between the lower initial payment and the required payment is added to the unpaid principal balance, and referred as negative amortization

Gross Income
Salary and wages before income taxes are deducted.

Growth Fund
A mutual fund that invests primarily in stocks for capital appreciation, as opposed to current income.

Growth Stock
Stock of a company with a record of high and vast earnings growth, relative to its industry.

Guarantee
A promise by one party to pay a debt or perform an obligation if the person with primary liability fails to pay or perform, as required.

Guardian
The person legally designated as responsible for the minor children and/or personal property of another person.

Hazard Insurance
A type of insurance shielding a policyholder against property damages caused by fire or a severe storm.

Heir
A beneficiary in a will.

Home Equity Line of Credit
A type of mortgage loan that provides the ability to access funds at any time and any amount, up to the maximum credit limit or line. Repayment is secured by a second mortgage, and is based on the equity in your home. Specified interest paid is usually tax deductible. Often used for home improvements, major purchases or expenses, and debt consolidation.

Home Equity Loan
A fully funded loan, acquired for a variety of purposes, secured by a second mortgage and based on the equity in your home. Interest paid is usually tax deductible.

Home Inspection
When a professional inspects the condition of the structure, electrical and plumbing systems, and other mechanical systems during a home purchase.

Homeowner's Insurance
An insurance policy that covers a homeowner against damages to property. It also includes liability protection for lawsuits from people injured while on the premises.

Household Income
The total income of all members of a household, used by creditors when evaluating applications for joint credit.

HUD-1 Statement
An itemized listing of the costs connected with a real estate transaction, including commissions, loan fees, points, and escrow amounts. The amount of costs paid by the buyer and seller are listed, and the seller's net proceeds are disclosed. Also called settlement sheet.

Identity theft
Someone else has used your personal information to obtain credit, to charge items to another person's existing accounts, or even to get a job. This is fraud.

Immediate Payment Annuity
An annuity purchased with one payment. Payments begin immediately.

Impound Account
Portion of the borrower's monthly mortgage payment that is held by the lender to pay property taxes, hazard insurance, mortgage insurance, ground rent, and other items as they become due. Known as an escrow account.

Income Fund
A mutual fund that seeks current income, rather than capital growth.

Index
A published, market-based figure used to set up a lending rate. Common indices include the one-year Treasury Constant Maturity Yield, the Federal Home Loan Bank (FHLB) 11th District Cost of Funds, and the prime rate, as listed in The Wall Street Journal.

Index Fund
A type of mutual fund that mirrors a broad-based index, such as the S&P (Standard & Poor's) 500 stock index. Because they are not actively managed, these funds usually have low management fees.

Indexed Rate
The sum of the published index, plus the margin, in an adjustable rate mortgage.

Individual Retirement Account (IRA)
An account to which an individual may contribute up to $3,000 per year (for the year 2004, although amount to vary from time to time). The contributions are tax-deductible and the earnings are tax-free until withdrawn.

Individual Retirement Account Rollover
The movement of qualified retirement funds from one account to another in order to avoid taxability and penalty. The rollover must occur within 60 days into an IRA-qualified retirement account.

Inflation
An increase in the prices of goods and services, shown as an annual percentage increase in the Consumer Price Index, as compiled by the Department of Labor.

Installment Contract
The purchase of property payments. Title to the property is given to the buyer when all of the payments have been made.

Installment Loan / Installment Credit
An account in which the debt is divided into amounts to be paid consecutively at intervals set by the terms of the loan.

Initial Public Offering (IPO)
The first time the stock of a corporation is available for purchase by the public.

Interest
The cost of borrowing money. Also, the earnings on invested money.

Interest Rate
The fee charged or paid for money lent, expressed as a percentage of the principal.

International Fund
A mutual fund that invests in foreign securities.

In Testate
To die without a will.

Introductory Rate
A low rate charged by a lender for an initial period to encourage borrowers to accept the credit terms. After the introductory period is over, the rate charged increases to the indexed rate or the stated interest rate. Often called a teaser rate.

Investment
An asset or item of value that is purchased to make a profit in the future.

Investor
A person who makes investments.

Installment Contract
The purchase of property payments. Title to the property is given to the buyer when all of the payments have been made.