HOME ZONE brought to you by Ginnie Mae

Left Arrow ImageHome | Site Tour | Site Help | Site Map | Privacy Statement

Brain Food

Cool Stories
Game Center
Brain Food
Chalkboard
Tab Border Image
MindBuilder Cool Facts Glossary Calculator



Glossary

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

This glossary defines many of the terms you might encounter when learning about home ownership, saving and investing. Some of the words have other meanings outside of this context. You can use this glossary to help explain the words you encounter in The Home Zone.

A

Amortize:

To pay off a borrowed sum and interest in installments. Many loans will require the installments to be made in equal amounts.

Apartment house:

A building that contains apartments.

Apartment:

An individual unit of rooms in an apartment house.

B

Bonds:

Loans that investors make to corporations or governments. It is a type of investment where the issuer (the corporation or government) pays a specified amount of interest on a regular basis, plus the full value of the loan when it matures.

Budget:

A plan for saving and spending money. As a verb, it means to develop such a plan.

C

Cashier’s check:

Sometimes called a "bank check," it guarantees that a check is good because it is written against the bank’s own account.

Certificates of deposit:

Sometimes called a CD. You purchase a CD from a financial institution. After a certain time, the institution pays you back with interest. A CD is one kind of investment.

Certified check:

A personal check that your bank guarantees it will honor.

Checking account:

An account at a bank where your money is held and available to you when you want it. Checks are written notes to your bank telling your banker how much to pay out of your account and to whom.

Closing conference:

A meeting between the buyer and seller of home in which papers are signed to transfer ownership of the property.

Collateral:

Property you pledge to guarantee somebody you'll pay back money that you borrow. If you don't pay back the money, the lender can take your collateral property.

Compound interest:

Interest paid both on the principal and on accumulated unpaid interest.

Condominium:

An individually owned unit in a building with many units.

Consumer Price Index:

A number to show the price of a imaginary basket of goods that tells if the price of things we buy is getting more expensive (inflation) or getting less expensive (deflation).

Contract:

A legally binding agreement between two or more parties. A document stating the terms of a contract.

Counterfeit:

To create fake money, or to copy money, in order to deceive.

Credit:

An amount that a bank or company will let a person use. Trust given to a customer for future payment for goods purchased.

Credit card:

A card with which a person buys things on credit. That is, a person presents the card for payment at the time of the purchase. The credit card company pays the seller and invoices the buyer at the end of the month.

Credit report:

A report that shows how well people pay their debts. It shows if they have gotten behind on their debts or if they have paid them on time.

Creditor:

A person or company to whom a debt is owed.

Currency:

Money.

D

Debit:

An entry in an account that shows an amount paid out or owed. The opposite of a credit to an account.

Debtor:

A person who owes a debt.

Deed:

A piece of paper that proves you own property. Deeds can be bought or sold.

Deflation:

A decrease in the level of price, or an increase in the value of money.

Department of Veteran's Affairs (VA):

The VA provides the world's most comprehensive and diverse programs of benefits for veterans and their dependents, including health care, assistance services and national cemeteries.

Detached housing:

A housing unit that is not attached to another housing unit. An apartment building, for example, is not detached housing. A house is detached housing.

Discipline:

The ability to control one's behavior.

Discount factor:

The amount that when divided into the total amount of money borrowed, provides one with the interval payment amount (discounting is the opposite of compounding).

Discretionary income:

Money left over after all your expenses are paid. Also called expendable income.

Down payment:

A part of the full price of something that is paid at the time of purchase or delivery, with the remainder to be paid later.

Duplex:

A dwelling with two attached living units.

E

Equity:

The amount left over when you subtract the amount you owe on a property from the value of the property.

Exchange rate:

The rate at which one country's currency can be converted to another.

Expenses:

Things that you are required to spend money on, such as food, clothing, housing, or other things that you have to have.

F

Federal Housing Administration (FHA):

FHA was created by an act of Congress in 1934. Currently operating as a division of the US Department of Housing and Urban Development (HUD), FHA does not make loans directly to borrowers. Its primary activity is to insure mortgage loans for low- and moderate-income buyers.

Finance charge:

A fee charged for a service, usually related to credit cards or loans.

Finance:

Money and investments.

G

Ginnie Mae:

Stands for the Government National Mortgage Association (GNMA).

H

HUD:

Short for the US Department of Housing and Urban Development (HUD).

I

Income tax:

A tax on income.

Income:

Money you make from a job or from business or property.

Inflation:

An increase in the level of prices, or a decrease in the value of money.

Insurance:

A contract by which someone guarantees for a fee to pay someone else for the value of property if it is lost or damaged (as through theft or fire); the amount for which something is insured.

Intaglio printing:

The kind of printing used to create U.S. paper currency. The intaglio process involves printing money from an engraved hard surface. Money is printed from a steel plate.

Interest:

A charge for borrowing money. Usually a percentage of the amount owed.

Invest:

To commit money so as to return a profit.

Investment account:

An account in which a person sets aside money to be invested.

Investment:

Putting your money to work earning more money. Examples of investments include purchasing property or a certificate of deposit.

Investor:

One who invests.

J

 

K

 

L

Landlord:

The owner of land or houses rented to someone else.

Layaway:

An agreement in which a seller holds merchandise and lets a buyer make payments on it. When the whole amount is paid, the seller lets the buyer have the merchandise.

Lease:

An agreement to pay money in exchange for use of property.

Loan:

Money borrowed with an agreement to pay it back, with interest, over a specific length of time.

Luxury:

Something adding to pleasure or comfort but not absolutely necessary.

M

Market basket:

The approximate 400 items on which the Consumer Price Index is based.

Maturity:

The date when a note becomes due.

Mobile home:

A trailer that is used as a permanent dwelling.

Money order:

A document for use when you don’t have a checking account. You pay the bank or post office the amount you want the money order made out for, plus a fee. The amount is then printed on the money order.

Mortgage insurance:

Insurance that protects a lender if a borrower fails to pay a mortgage note.

Mortgage:

A transfer of rights to a piece of property (such as a house) usually in return for a loan. A mortgage is canceled when the loan is fully paid back.

Mortgage-backed securities:

Securities issued based on the cash flow from the principal and interest provided by a pool of mortgages.

Multi-family home:

A building that has separate units for more than one family.

Mutual fund:

An investment where your money is pooled with other investor’s money and used to make investments by a professional manager.

N

Necessity:

Something that is necessary or required.

Note:

A written promise to pay, such as a mortgage.

O

Owning:

To have or hold as property.

 

P

Percentage:

A part of a whole, expressed in hundredths. For example 99 percent of a pie equals 99 pieces of the pie.

Principal:

A sum that is owed as a debt, usually the original value of the debt. For example, if you borrow $100, the principal is $100.

Q

Qualifying:

To prove suitable for a task. When you get a mortgage, you have to qualify for it by showing that you can and will pay back the money your borrow.

R

Real estate:

Property consisting of buildings and land.

Rent:

A payment made by a tenant to a property owner for the use of the owners' property, such as a unit in an apartment building. Payments are made at specific time, usually every month.

Renter:

A person who rents property.

Risk:

The possibility of loss.

Rural:

Related to a sparsely-populated area – the country.

The Rural Housing Service (RHS):

RHS is managed by the US Department of Agriculture (USDA) and provides a wide variety of services to encourage rural development, including direct loans, grants, and loan guarantees.

S

Salary:

Fixed compensation paid regularly for services.

Savings account:

A bank account in which a person deposits money to be saved. The money in a savings account usually earns interest. You usually can't write checks on a savings account.

Savings bond:

A bond issued by the U.S. government.

Savings:

Money saved.

Securities:

Evidence of ownership (like a stock certificate or a bond).

Security deposit:

A deposit you pay to a landlord to cover the cost of damage to the property you are renting.

Simple interest:

Interest figured only on the original amount (the principal) of a loan.

Single-family home:

A dwelling, usually a house, in which only one family lives.

Stock market:

A place where stocks are bought and sold.

Stock:

A type of investment that equals a portion of ownership in a corporation.

Suburb:

A smaller, less populated community at the edge of a larger, more populated city.

T

Tax break:

A reduction in taxes.

Tax return:

A form you fill out and send to the government that shows your income and taxes that you paid or need to pay.

Tenant:

One who pays rent to live in a property.

Townhouse:

A house that shares a wall with another house.

Traveler’s check:

A check issued by travel companies, banks, and credit card companies to be used in place of cash in places where you might have difficulty using a personal check.

Triplex:

A building with three housing units.

 

U

Underwriting:

The decision whether to lend someone money. The decision is based on the person's credit, employment, and other factors. It also involves determining how much money to lend, at what rate, and for how long.

Urban:

Related to being in the city.

US Department of Agriculture (USDA):

USDA is a Federal agency established to enhance the quality of life for the American people by supporting the production of agriculture.

US Department of Housing and Urban Development (HUD):

HUD is a Federal agency established in 1965 to promote housing and community development in the US through the use of direct loans, grants, subsidies, insurance programs, and guarantees. Ginnie Mae operates as a division of HUD.

V

Veteran:

A former member of the armed forces -- for example, the Army, Air Force, Navy, or Marines.

W

 

X

 

Y

Yield:

The rate at which money you invest grows over time. Yield is usually expressed in terms of how much interest your investment earns in a year.

Z

Home Zone Home Ginnie Mae Home