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Personal Financing

Glossary of terms

Making Sense of Dollars and Cents.

It's hard to make sense of the difference between APR and APY. Below is a simple guide to some common financial terms. 

 

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  • Payee

    The person or institution funds are paid to.

  • Payor

    The person or institution issuing the funds.

  • Pledged funds

    Pledged funds are those that are designated to be used for a specific purpose, such as securing a loan, also known as collateral.

  • Prime Rate

    The best borrowing rate charged to its most credit worthy customers by US banks.

  • Principal

    The original or initial amount of money invested or borrowed.

  • Private Mortgage Insurance (PMI)

    Protects the lender against loss if the homebuyer defaults on the loan. Usually required for first mortgage loans where the down payment is less than 20% of the sales price--or in a mortgage refinance where the amount financed is greater than 80% of the appraised value of the property.

  • Rate

    A percentage a borrower is willing to pay to receive funds.

  • Rate Lock

    A written agreement guaranteeing a mortgage applicant a specific interest rate on a home loan provided the loan is closed within a specified time frame.

  • Refinance

    To get new financing for a home or car to lower the rate and/or extend the term to reduce the payment, or to borrow additional funds. In the process, the old lender is paid off by the new one.

  • Repossession

    When a lender takes possession of property due to the borrower's failure to pay the loan installments due or otherwise causes the loan to be in default. A lender may repossess a vehicle or other property securing a loan.

  • Retirement Planning

    An all-encompassing financial plan to assist members saving for retirement.

  • Risk

    The uncertainty that an investment will earn an expected rate of return, or that a loss may occur.

  • Share

    In Credit Unions a share is the amount a member has on deposit representing ownership in the credit union.

Your savings federaly insured to at least $250,000 and backed by the full faith and credit of the United States Government: NCUA, Equal Housing Lender, ESI