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| Word |
Description |
| ACH |
Automated Clearing House. A nationwide electronic funds transfer network that allows participating financial institutions to distribute electronic credit and debit entries to bank accounts and to settle such entries. Interra Credit Union has the ability to initiate and recieve funds via ACH. |
| APR |
Annual Percentage Rate. A measure of the cost of credit, expressed as a yearly rate. Because all lenders follow the same rules when calculating APRs, it is a good basis for comparing the cost of a loan or mortgage over the loan term. |
| APY |
Annual Percentage Yield. The rate of return on an investment over a one-year period. Taking into account the affect of compounding, an APY is the rate actually earned or paid in one year. An APY is earned on Interra accounts including savings (all types), checking, MMSAs, IRAs, HSAs and Certificates. |
| ARM |
Adjustable-rate mortgage. A mortgage loan with an interest rate that changes. |
| ASI |
American Share Insurance. A member-owned, share guaranty corporation, and the nation‘s largest non-federal insurer of credit union deposits. By members' choice, the insurance provider of Interra Credit Union. |
| ATM |
Automated Teller Machine. |
| Balloon Payment |
A lump-sum payment that may be required when a mortgage loan ends. It can happen when the lender allows the borrower to make smaller payments until the end of the loan. A balloon payment will be much larger compared to other monthly payments the borrower made. |
| CFA |
Cooperative Financial Association. |
| Closing costs |
Costs incurred by the buyer and seller in transferring ownership of a property. |
| Equity |
The difference between the current market value of an item of property and the amount the owner still owes on the loan. It is the amount of money that the owner would have left over after selling the item and paying off the loan.
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| HELOC |
Home Equity Line of Credit. |
| HSA |
Health Savings Account. |
| Installment debt |
A loan that a borrower makes payments on, such as an auto loan, a student loan or a debt consolidation loan.
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| IRA |
Individual Retirement Account. |
| LOC |
Line of Credit. |
| LTV |
Loan-to-value ratio. The ratio between the amount of a loan and the total value of the item being financed. |
| MMSA |
Money Market Share Account. |
| Personal loan |
A loan that is secured by a borrower's signature only. In other words there is no collateral presented that can be used to back up the loan.
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| PIN |
Personal Identification Number. |
| PMI |
Private Mortgage Insurance. Insurance provided by a nongovernment insurer to protect a lender agains loss if a borrower defaults. Usually required if down payment is less than 20% of the purchase price. |
| Prepayment penalty |
The charge a lender may incur upon a borrower for paying off a loan before the end of the term. It may be found in mortgages and other loans. |
| Regulation D |
A Federal Banking Regulation, commonly known as "REG D." |
