chapter 15
variable interest rate loans
(VlRs or VMRs, Variable Mortgage Rates.) An interest rate in a real estate loan which by the terms of the note varies upward and downward over the term of the loan depending on money market conditions Variable interest rate loans
finance charge
A fee charged for the use of credit or the extension of existing credit. May be a flat fee or a percentage of borrowings, with percentage-based finance charges being the most common Finance charge
over the limit fees
A fee charged when your balance goes over your credit limit. used to decline the credit card if the person went over their credit limit but then credit card companies employed this new policy where they allowed the transaction to go through and then charge crazy fees. the Credit CARD act of 2009 requires the issuer to give account holder the option to opt Over the limit fees
open end credit
A line of credit in which loans are made on a continuous basis and the borrower is billed periodically for at least partial payment Open end Credit
amortized
A loan that is repaid in equal payments over its life Amortized
average daily balance
A method of computing finance charges in which creditors add your balances for each day in a billing period, and then divide by the number of days in the period Average daily balance
adjustable rate mortgages
A mortgage loan that allows the interest rate to change at specific intervals over the maturity of the loan Adjustable rate mortgages
creditor
A person or business that has a claim to the assets of a business; a person or business to which money is owed Creditor
amortization table
A schedule that calculates the interest and principal payments along with the remaining balance of the loan Amortization table
amortization schedule
A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero Amortization schedule
accelerated mortage
Accelerated mortage
late fees
Additional fees that can be added to a credit card bill if the card holder fails to make at least the minimum payment by the due date Late fees
revolving charge account
Allows you to carry a balance from one month to the next. You are paying interest on this because you are borrowing money Revolving charge account
impound accounts
An account that most mortgage lenders require borrowers to have for funds to pay future real estate taxes and insurance premiums Impound accounts
debtor
An individual or an organisation who has bought on credit (or received a loan) from the business and *owes the business money Debtor
Chapter 13 bankruptcy
Chapter 13
Chapter 7 bankruptcy
Chapter 7
consolidate loans
Consolidate loans
annual percentage rate
Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan Annual percentage rate
escrow accounts
Funds placed in trust with a third party, by a borrower for a specific purpose and Escrow accounts
real estate
Land and all man-made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights Real estate
Federal truth in lending act
Legislation requiring a disclosure statement that informs a patient of a procedure's total cost, including finance charges; required when the patient will make more than four payments Federal truth in lending act
loan reduction schedule
Loan reduction Schedule
loan repayment tables
Loan repayment tables
Rule of 78
Pre-payment penalty in a financing contract; the portion of a "90-days same-as-cash" agreement that states that the entire loan amount plus the interest accumulated over the first 90 days becomes due immediately Rule of 78
Regulation Z
Regulation Z requires disclosure of all costs of financing the purchase of owner occupied residential purchases of one to four units. It also requires disclosure of the annual percentage rate of the loan. Implementation of Regulation Z
borrower
Someone who borrows money from banks to buy expensive items that cost more than they have. They have to pay back what they borrowed, plus an interest fee from which the bank makes money Borrower
lender
Someone who makes funds available to another with the expectation that the funds will be repaid, plus any interest and/or fees. A lender can be an individual, or a public or private group. Lenders may provide funds for a variety of reasons, such as a mortgage, automobile loan or small business loan Lender
sum of the balances method
Sum of the balances method
personal property
Tangible physical property (such as cars, clothing, furniture, and jewelry) and intangible personal property. This does not include real property such as land or rights in land Personal Property
amount financed
The amount of credit provided to you or on your behalf Amount financed
repayment schedule
The legal addendum to the Promissory Note stating the terms of loan repayment and fulfilling disclosure requirements. The Repayment Schedule is a plan that indicates the total principal and interest due, an installment amount, and the number of installments required to pay the loan in full. The Repayment Schedule also contains the interest rate for the loan(s) included on the schedule, the due date of the first and subsequent installments, and the frequency of installments Repayment Schedule
credit limit
The maximum amount of money a borrower (cardholder) can charge or withdraw from a particular credit account Credit limit
nominal rate
The nominal rate of interest is the actual current rate of interest expressed as a percentage without taking any account of the rate of inflation. If the rate of inflation is subtracted from the nominal rate of interest, this is then called the 'real rate of interest Nominal rate.
repossessed
When a property is claimed by the lender after mortgage instalments not paid Repossessed
itemized billing
When charges for antepartum care, delivery, and postpartum care are itemized by the physican, the charges should be combined into one charge and processed under the CPT code for total obstetric care Itemized billing
country club billing
a billing method that provides copies of original charge receipts to the customer Country club billing
credit card
a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered Credit card
installment loan
a monetary loan to be repaid in fixed amounts over a predetermined period of time. Typically each payment is made monthly Installment loan
Arm
adjustable rate mortgage
charge accounts
credit extended to a consumer allowing the consumer to buy goods or services from a particular company and to pay for them later Charge accounts
cap
determined by chance or impulse or whim rather than by necessity or reason Cap
fixed rate loans
generally have repayment terms of 15, 20, or 30 years. Both the interest rate and the monthly payments (for principal and interest) stay the same during the life of the loan Fixed rate loans
total installment cost
includes the down payment plus the sum of all payments Total installment Cost
stated rate
interest rate that determines the cash interest payments that the bond issuer must pay Stated rate
Stafford loan
is a student loan offere to eligible students enrolled in accredited American institutions of higher education to help Stafford loan
unearned interest
it is a contra lease receivable. it is the future interest Unearned interest
real property
may be constructed as frame (wood), masonry (brick) or block (today some frame construction is steel and concrete, and known as fire resistive) ; generally masonry and block construction would result in lower premiums that wood framing Real propert
deferred payment price
the total price of the product or service plus finance charge Deferred payment price
United States Rule
when a partial payment is made on a loan, interest is computed on the principal from the first day of the loan to the date of the partial payment. then the partial payment first pays off the interest then the rest of the payment is used to reduce the principal United States Rule