Mortgage: a note used to secure a loan for property, like a house
Annual Percentage Rate (APR): yearly interest rate charged on borrowed money
Default: occurs when you’re unable to pay your debt/loan payments
Principal: amount of money due on a loan before interest
Time Value of Money: the longer money is invested, the longer is has to grow/appreciate
Money now is typically worth more than in the future due to inflation
Inflation: decrease in the value of money; increase in prices
Savings Account: federally insured accounts that typically pay the lowest rates of interest (compared to other government insured products)
Checking Account: allows for withdrawals and deposits by checks, automated teller machines (ATM), and electronic debits; some pay interest
Adjustable-Rate Mortgage (ARM): starts with a below-average interest rate but can rise as the market changes (not a set rate)
Amortization: paying off debt with monthly principal payments and interest
Check Bounces: occurs when the person writing the check doesn’t have enough money in their account to cover the written amount
Outstanding Check: when a check has been written but not cashed yet
Collateral: assets that are offered to secure a loan or other credit, and if you fail to meet payments on the loan, the collateral will be taken/seized; examples include your house or car
Interest: the cost of using money, a right, share, or title in property
Interest Rate: the amount paid by a borrower to a lender in exchange for the use of the lender’s money for a certain period of time
For example, you borrow $100 from the bank and the annual interest rate is 7%. After a year, you’ll have to pay the bank $107.
Federal Reserve System (the Fed): the central bank of the United States; regulates the U.S. monetary and financial system
Statement: a summary of all transactions that occurred over the preceding month; some banks/credit card companies mail the statement while others give online access
Loan Forgiveness: releases you from the obligation to pay back part of your federal debt
Deferment: postponing something, like a monthly payment, to another day
Unemployment: occurs when someone actively seeking work is unable to find any
Want to learn more? Here are some helpful Quizlets:
Sources include: NAIC, OppLoans, HelpWithMyBank, BetterMoneyHabits
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