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