Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
The percentage of a person's monthly earnings used to pay off all debt obligations. Lenders consider two ratios, constructed in slightly different ways. The first, called the front-end ratio, the ratio of the monthly housing expenses – including principal, interest property taxes and insurance (PITI) is compared to the borrower's gross, pretax monthly income. In the back-end ratio, a borrower's other debts, such as auto loans and credit cards, are also figured in. Lenders usually take both into account and set an acceptable ratio, which might be expressed as 33/39. Some lenders, and some lending qualifying agencies such as FHA, take only the back-end ratio into account.
The legal document conveying title to a property.
A decline in the value of property; the opposite of appreciation.
A type of point (1 percent of a loan) paid by the borrower to reduce the interest rate.
In Bankrate.com tables of rates, this indicates that the institution did not report the information requested.
The amount of a property's purchase price that the buyer pays in cash and does not finance with a mortgage.
Days on the market
The period between listing and sale, or listing and a property being taken off the market.
Charges for extra services or products sold by the dealer, including rustproofing, undercoating and extended warranties.
An allowance, usually between 2 percent and 3 percent of manufacturer's suggested retail price, that manufacturers provide to dealers. A holdback allowance may allow the dealer to pay the manufacturer less than the invoice price. A buyer could obtain a car below invoice price and the dealer would still make a profit.
Programs offered by manufacturers to increase the sales of slow-selling models or to reduce excess inventories. Dealers may elect to pass on the savings to the buyer.