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.
A company or person undertaking the responsibility for issuing a mortgage. Underwriters analyze a borrower's creditworthiness and set the loan amount.
Supplemental insurance coverage in case of a liability. Companies that sell auto and homeowners insurance usually sell umbrella policies which are usually offered in $1 million increments.
This part of an auto insurance policy covers injuries to you caused by a driver without enough insurance to pay for your medical expenses. Some states include damages to your car in this coverage.
A penalty for not paying enough total estimated tax and withholding. You can avoid underpayment penalties by paying a percentage amount of last year's tax due or of the current year's expected tax due. You may pay the taxes in combined estimated and withholding tax payments.
In secured loans, such as mortgages, home equity or auto loans, it means owing more than the asset is worth. For example, if you borrowed $250,000 for a home, put no money down and home values declined, you would be underwater on your mortgage.
The process by which a lender decides whether to lend money, based on the value of the property, the borrower's credit history and any other relevant factors.
Income such as interest, dividends, capital gains or rents, as opposed to earned income, such as wages, tips and salaries.
Uniform Gift to Minors
A trust often used to set aside money for a child’s college education. In many cases, a parent will give up to $10,000 per year per child to take advantage of a tax exemption on gifts.
Uniform Gift to Minors Act (UGMA)
A 1956 act to make gifts of money and securities to minors. The property held is considered an asset of the minor. The custodian of the account has control over the assets until the child reaches 18 or 21, depending on state law.