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 number of percentage points added to the index on a one-year adjustable rate mortgage (ARM). For example, if the index rate is 9 percent and the margin is 3 percent, then the fully indexed rate is 12 percent.
The date on which the principal balance of a loan becomes due and payable.
A legal document that uses property as collateral to secure payment of a debt.
The lender that originates the mortgage loan; the one making the loan directly and closing the loan.
An individual or company that brings borrowers and lenders together for the purpose of loan origination. Unlike a mortgage banker, brokers do not fund the loan but work on behalf of several lenders. Brokers typically require a fee or a commission for their services. See broker premium.
Mortgage insurance is a policy that insures the lender against loss should the homeowner default on a mortgage. Depending on the loan, the insurance can be issued by a government agency such as the Federal Housing Administration (FHA) or a private company. It is part of the monthly mortgage payment. See also private mortgage insurance (PMI).
Tax shorthand (pronounced "makers") for Modified Accelerated Cost Recovery System, a depreciation method used to figure the deductions you get over the life of tangible property you began using on Jan. 1, 1987, or later. Depreciation deductions for property in use earlier (1980 thorugh 1986) are determined under the Accelerated Cost Recovery System (ACRS).
1. A periodic assessment that residents pay to their homeowners or condominium association to pay for maintenance and repair of common areas. 2. Annual amounts determined by owner’s association or management company for the maintenance and operation of the time share property and the time share program. Usually includes real estate taxes.
Major hospitalization policy
A policy that typically has high deductibles and high coverage limits. Similar to major medical coverage, except that it applies only to hospitalization.
Major medical policy
A policy that typically has high deductibles and high coverage limits. Sometimes called a catastrophic policy.