Details Title: Finance Vocabulary Test 3 Description: Chapters 6789 Total Flash Cards: 65 Created: 07/01/2009 18:23:31		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Finance Flashcards
Cards in this set: Term Credit Definition An arrangement to receive cash, goods, or services now and pay for them in the future Term Consumer Credit Definition The use of credit for personal needs (except a home mortgage) Term Closed-End Credit Definition One time loans that the borrower pays back in a specified period of time and in payments of equal amounts Term Open-End Credit Definition A line of credit in which loans are made on a continuous basis and the borrower is billed periodically for at least partial payment Term Line of Credit Definition The dollar amount, which may or may not be borrowed, that a lender makes available to a borrower Term Interest Definition A periodic charge for the use of credit Term Revolving Check Credit Definition A prearranged loan from a bank for a specified amount; also called a bank line of credit Term Debit Card Definition Electronically subtracts the amount of a purchase from the buyer's account at the moment the purchase is made Term Home Equity Loan Definition A loan based on the current market value of a home less the amount still owed on the mortgage Term Credit Bureau Definition A reporting agency that assembles credit and other information about consumers Term Fair Crdit Reporting Act Definition Regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their files and the right to have erroneous data corrected Term Equal Credit Opportunity Act (ECOA) Definition Bans discrimination in the extension of credit on the basis of race, coler, age, sex, marital status, and other factors Term Character Definition The borrower's attitude toward his or her credit obligations Term Capacity Definition the borrower's financial ability to meet credit obligations Term Capital Definition The borrower's assets or net worth Term Collateral Definition A valuable asset that is pledged to ensure loan payments Term Conditions Definition The general economic conditions that can affect a borrower's ability to repay a loan Term Fair Credit Billing Act (FCBA) Definition Sets procedures for promptly correcting billing mistakes, refusing to make credit card payments on defective goods, and promptly clearing payments Term Consumer Credit Reporting Reform Act Definition Places the burden of proof for accurate credit information on the credit reporting agency Term Truth in Lending Law Definition A federal law that requires creditors to disclose the annual percentage rate (APR) and the finance charge as a dollar amount Term Finance Charge Definition The total dollar amount paid to use credit Term Annual Percentage Rate (APR) Definition The percentage cost (or relative cost) of credit on a yearly basis. The APR yilds a true rate of interest for comparison with other sources of credit Term Simple Interest Definition Interest computed on principal only and without compounding Term Declining Balance Method Definition A method of computing interest when more than one payment is made on a simple interest loan Term Add-on Interest Method Definition A method of computing interest in which interest is calculated on the full amount of the original principal Term Adjusted Balance Method Definition The assessment of finance charges after payments made during the billing period have been subtracted Term Previous Balance Method Definition A method of computing finance charges that gives no credit for payments made during the billing period Term Average Daily Balance Method Definition A method of computing finance charges that uses a weighted average of the account balance throughout the current billing period Term Rule of 78s Definition A mathematical formula to determine how much interest has been paid at any point in a loan term Term Credit Insurance Definition Any type of insurance that ensures repayment of a loan in the even the borrower is unable to repay it Term Fair Debt Collection Practices Act (FDCPA) Definition A federal law, enacted in 1978, that regulates debt collection activities Term Consumer Credit Conseling Services (CCCS) Definition a local, nonprofit organization that provides debt counseling services for families and individuals with serious financial problems Term Chapter 7 bankruptcy Definition One type of personal (or straight) bankruptcy in which many debts are forgiven Term Chapter 13 bankruptcy Definition A voluntary plan that a debtor with regular income develops and proposes to a bankruptcy court Term Impulse Buying Definition unplanned buying Term Cooperative Definition A nonprofit organization whose member-owners may save money on certain products or services  Term open dating Definition information about freshness or shelf life found on the package of a perishable product Term Unit Pricing Definition the use of a standard unit of measurement to compare the prices of packages of different sizes Term Rebate Definition a partial refund of the price of a product Term warranty Definition a written guarantee from the manufacturer or distributor of a product that specifies the conditions under which the product can be returned, replaced, or repaired Term Service Contract Definition an agreement between a business and a consumer to cover the repair costs of a product Term Mediation Definition the attempt by an impartial third party to resolve a difference between two parties through discussion and negotiation Term Arbitration Definition the settlement of a difference by a third party whose decision is legally binding Term Small Claims Court Definition A court that settles legal differences involving amounts below a set limit and employs a process in which the litigants usually do not use a lawyer Term Class Action Suit Definition A legal action taken by a few individuals on behalf of all the people who have suffered the same alleged injustice Term Legal Aid Society Definition One of a network of publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney Term Lease Definition a legal document that defines the conditions of a rental agreement Term Condominiumn Definition an individually owned housing unit in a building with several such units Term Cooperative Housing Definition a form of housing in which a building constaining a number of housing units is owned by a nonprofit organization whose members rent the units Term Manufactured Home Definition a housing unit that is fully or partially assembled in a factory before being moved to the living site Term Zoning Laws Definition restrictions on how the property in an area can be used Term Earnest Money Definition a portion of the price of a home that the buyer deposits as evidence of good faith to indicate a serious purchase offer Term Mortgage Definition a long-term loan on a specific piece of property such as a home or other real estate Term Points Definition Prepaid interest charged by a lending institution for the mortgage; each discount point is equal to 1 percent of the loan amount Term Conventional Mortgage Definition a fixed-rate, fixed-payment home loan with equal payments over 15, 20, or 30 years Term Amortization Definition the reduction of a loan balance through payments made over a period of time Term Balloon Mortgage Definition a home loan with fixed monthly payments and a large final payment, usually after three, five or seven years Term Adjustable-rate mortgage (ARM) Definition a home loan with an interest rate that can change during the mortgage term due to changes in market interest rates; also called a flexible-rate mortgage or a variable-rate mortgage Term Rate Cap Definition a limit on the increases and decreases in the interest rate charged on an adjustable-rate mortgage Term Payment Cap Definition a limit on the payment increases for an adjustable-rate mortgage Term Growing-equity mortage Definition a home loan agreement that provides for payment increases to allow the amount owed to be paid off more quickly Term Buy-down Definition an interest rate subsidy from a home builder, a real estate developer or by the buyer that reduces a home buyer's mortgage payments during the first few years of the loan Term Second Mortgage Definition a cash advance based on the paid-up value of a home; also called a home equity loan Term Reverse Mortgage Definition a loan based on the equity in a home, that provides elderly homeowners with tax-free income and is paid back with interest when the home is sold or the homeowner dies Term Refinancing Definition the process of obtaining a new mortgage on a home to get a lower interst rate