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.
Interest that is charged daily; usually refers to the partial month's interest that the buyer pays on the mortgage covering the period from the day of closing to the end of the month.
Acronym for the elements of a mortgage payment: principal, interest, taxes and insurance.
Private mortgage insurance. A policy that protects the lender by paying the costs of foreclosing on a house if the borrower stops paying the loan. Although PMI protects the lender, it is paid monthly by the borrower. Private mortgage insurance usually is required if the down payment is less than 20 percent of the sale price.
A point equals 1 percent of a mortgage loan. Some lenders charge "origination points" to cover expenses of making a loan. Some borrowers pay "discount points" to reduce the loan's interest rate.
A company that underwrites mortgage loans and keeps them on the books instead of selling them on the secondary market.
Power of attorney
A document in which the signer authorizes someone to conduct business in his or her name -- signing title documents and checks, for example.
Interest that a borrower pays before it is due, usually to save taxes.
A lender's charge to the borrower for paying off the loan before the end of the term. It is present in some mortgages, preventing borrowers from rapidly refinancing.
1. The amount of money borrowed. 2. The amount of money owed, excluding interest. 3. The client of a real-estate agent.