Personal Finance - Financial Terms Dictionary
0-9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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Acceleration Clause An "acceleration clause" is a provision in a contract that states that the unpaid balance becomes due and payable under certain conditions, such as failure to make payments on time. Mortgage documents often contain acceleration clauses providing the lender the right to call the entire principal due on the loan when periodic mortgage payments are not made. |
| Accounts Payable Accounts payable is an accounting entry that reflects a companys short term obligations owed to suppliers or services providers. |
| Accounts Receivable Accounts receivable is an accounting entry reflects the money owed to a company from customers for goods sold or services provided. |
| Accrued Interest Accrued interest is the interest on a loan that has been earned but not yet paid. |
| ACH ACH stands for Automated Clearing House and refers to the the system that allows for transferring funds electronically between financial institutions, companies and individuals. |
| Adjustable-Rate Mortgage An adjustable-rate mortgage is a home loan where the interest rate is periodically adjusted based on the Federal Reserve posted rate |
| Amortization Amortization is the repayment of a loan by regular installments. |
| Annual Credit Report The federal Fair Credit Reporting Act requires each of the national consumer reporting agencies (Equifax, Experian, and TransUnion ) are to provide individuals with a free copy of their credit report, upon request, once every 12 months. |
| Annual Percentage Rate Annual percentage rate is the interest charged on a debt, expressed as a yearly rate. Annual percentage rate is often referred to as APR for Auto Loans, Mortgages and Credit Cards |
| Annuity Annuity are a series of fixed payments that are paid at regular intervals over a specified period Annuities are often used to provide with a stable income during retirement |
| ARM An "ARM" or "adjustable-rate mortgage" is a mortgage loan where the interest rate is periodically adjusted based. |
| Assessed Value Assessed value is the dollar value assigned to property by a municipality for the purpose of assessing taxes. |
| Asset An asset is any property that has value. |
| Assumable Mortgage An assumable mortgage is a mortgage that can be transferred to the buyer of a real estate property. |
| Automated Teller Machine An automated teller machine or ATM is a computer terminal which allows customers to make deposits, make cash withdrawals, check bank balances, and other financial transactions. |
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Bad Debt A bad debt is a debt that is written off and deemed uncollectible. |
| Balloon Mortgage A balloon mortgage is a mortgage loan with periodic payments of principal and interest that do not fully amortize the loan. The balance of the loan is then due in a lump sum at the end of the term of the loan. |
| Balloon Payment The final payment that repays all the remaining principal and interest of a partially amortized or unamortized loan. Balloon mortgage loans can provide for a balloon payment in 5 or 7 years. |
| Bankruptcy Bankruptcy is a legal proceeding that releases a person or company from repaying a portion or all debts owed. Bankruptcy can adversely affect the ability to obtain credit in the future. |
| Bearer Bond Bearer bonds" are bonds that are not registered in the name of the owner on the books of the issuer. Such bonds are held in physical form by the owner. Interest on the bonds is obtained by physically detaching interest coupons and delivering them to the paying agent. |
| Beneficial Owner A beneficial owner is any person or entity with sole or shared power to vote or dispose of the stock. The SEC defines "beneficial owner" under the federal securities laws. |
| Beneficiary A beneficiary is generally a person or entity who receives money or other benefits. The beneficiary of a life insurance policy, for example, is the person who receives the payment of the insurance proceeds after the death of the insured. |
| Bi-Weekly Mortgage A bi-weekly mortgage is a mortgage loan on which interest and principal payments are made twice a month as opposed to monthly payments. |
| Blind Trust A blind trustis a trust in which the trustees have full discretion over the assets, and the beneficiaries of the trust have no knowledge of the holdings of the trust. A blind trust is often set up to avoid possible conflicts of interest that could occur if the beneficiary had knowledge of the specific investment. |
| Bond Yield Bond yield refers to the return an investor would earn if a bond was purchased and held to maturity. |
| Bridge Financing Bridge financing is interim financing in anticipation of a more permanent financing to be completed in the future. |
| Bull Market Bull market is a stock market marked by rising prices and optimism. |
| Burn Rate Burn rate refers to a company's rate of negative cash flow while ramping up operations and seeking ultimate profitability. |
| Business Incubators Business incubators are organizations that assist start up companies by providing office space, services, and advice under one roof with the goal of the successful development of new companies. |
| Business Plan A Business Plan is a document that sets forth a description of a particular company and its plans and prospects. |
| Buy on Margin To buy on margin involves a stock investor borrowing money to buy additional shares, and using the purchased shares as collateral for the loan. |
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Durable Power of Attorney for Healthcare A durable power of attorney for healthcare is a document in which a person is appointed to make health care decisions for another should that person be unable to make the decisions for himself or herself. |
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EBITDA EBITDA is an acronym for "Earnings before interest, taxes, depreciation and amortization" a financial measure of a company defined as its revenues less cost of goods sold and selling, general and administrative expenses, but before the deduction of interest, income taxes, depreciation and amortization. |
| ETF Exchange-traded funds represent a pool of stocks similar to a mutual fund. ETF's in the form of shares and can be traded on a stock exchange during the day, be purchased on margin, and be subject to shorting transactions . |
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FICO Score The "FICO score" is also known as an individual's credit score. FICO is an acronym for Fair Isaac Corporation, the company that developed the method of calculating the score. The FICO scoring system is designed to predict a person's probability of delinquency on loan payments .. |
| Foreclosure "Foreclosure" is the process by which a holder of a mortgage forces a sale of the underlying property to pay off the loan. |
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Jumbo CD A jumbo CD is a certificate of deposit with a minimum denomination of $100,000. Jumbo CDs are usually bought and sold by large institutions. |
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Like-Kind Property Like-kind property is a term used in the context of tax deferred exchanges of real property under Section 1031 of the Internal Revenue Code. |
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Mutual Fund A mutual fund is an investment pool managed by an investment company. A mutual fund raises money by selling its shares to the public and then invests in a group of securities, such as stocks, bonds and money market investments. |
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P/E Ratio A P/E ratio refers to a corporation's stock price divided by the past annual earnings per share or expected annual earnings per share over the next year. |
| Probate Probate is the legal process where a deceased's estate is administered and the assets from the estate distributed to heirs or beneficiaries under a will. Probate determines the validity of a will, if one exists. |