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A credit rating where the FICO score is 660 or above. There have been no late mortgage payments within a 12-month period. This is the best credit rating to have when entering into a new loan.
- Browse Related Terms: "A" Loan or "A" Paper, "B" Loan or "B" Paper, "C" Loan or "C" Paper, Fixed Expenses, mortgage interest, Serious Delinquency, Sub-Prime Loan, Variable Expenses
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See: annual percentage rate.
- Browse Related Terms: A.P.R., annual percentage rate (A.P.R.), Assumption, Buy Down, Commitment Letter, Discount point, Float, Interest Accrual Rate, Truth-in-Lending Act
All > Business > Finance > Personal Finance > Income Tax
A concept of tax fairness that states that people with different amounts of wealth or different amounts of income should pay tax at different rates. Wealth includes assets such as houses, cars, stocks, bonds, and savings accounts. Income includes wages, interest and dividends, and other payments.
- Browse Related Terms: ability to pay, benefits received, Earned Income Credit (EIC), financial records, Gross Income, horizontal equity, underground economy, vertical equity
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Documents recording the ownership of property throughout time.
A historical summary provided by a title insurance company of all records affecting the title to a property.
- Browse Related Terms: Abstract of title, Assignment of Mortgage, Chain of Title, Deed, Deed of trust, Document Recording, Mortgage holder, Notary Public, Ownership, Public Record Information, Quitclaim Deed, Recorder, Recording, Recording Fees, Title, Transfer of Ownership, trust deed
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All > Business > Banking > Offshore Banking
Is defined as:
- Tax shelter as defined under Internal Revenue Code (IRC) Section 6662(d)(2)(C),
- Reportable transaction as defined under IRC Section 6707A(c)(1) that is not adequately disclosed in accordance with IRC Section 6664(d)(2)(A),
- Listed transaction as defined under IRC Section 6707A(c)(2),
- Gross misstatement within the meaning of IRC Section 6404(g)(2)(D), or
- Transaction to which the noneconomic substance transaction (NEST) penalty applies under Revenue and Taxation Code (RTC) section 19774.
- Browse Related Terms: Abusive tax avoidance transaction (ATAT), Material Advisor, Organizer, Potentially abusive tax shelter, promoter, Red Cross Scheme, Seller, transaction
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Transactions promoted for the promise of tax benefits with no meaningful change in the taxpayer's control over or benefit from the taxpayer's income or assets. These transactions typically have no economic purpose other than reducing taxes, or may involve the use of multiple layers of domestic and foreign pass-through entities including: partnerships, S corporations, limited liability companies, and trusts.
- Browse Related Terms: Abusive tax schemes, Large entity, Listed transaction, Noneconomic substance transaction, Offshore financial arrangement (OFA), Reportable transaction, Tax Benefit, Tax Haven, Tax Shelter
All > Business > Finance > Personal Finance
If your life insurance policy has an accelerated death benefit (ADB), you may qualify to use a portion of the death benefit to pay for certain healthcare expenses, such as the costs of a terminal illness or long-term care, while you're still alive.
Using the ADB, you take cash advances from the policy, reducing the death benefit by up to a fixed percentage. The balance is paid to your beneficiaries on your death.
While an accelerated death benefit can help ease current financial burdens, including this option in your policy increases the cost of coverage. And, if you do take money out, it reduces what your beneficiaries receive.
- Browse Related Terms: Accelerated death benefit, Asset, Cash surrender value, Cash value account, Credit Life Insurance (CLI), Death benefit, Decreasing term insurance, Depreciation, Face value, Insurance trust, Life settlement, Lump sum, Pension maximization, Permanent insurance, Straight life, Survivorship life, Universal life insurance, Viatical settlement, Whole life insurance
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Benefits available in some life insurance policies prior to death.
- Browse Related Terms: Accelerated Death Benefits, Accidental Death Benefit, Beneficiary, Cash Value (Cash Surrender Value), Current Assumption Whole Life, Double Indemnity, Face Amount, Living Benefits, Mortality Table, Rider, Variable Life Insurance
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The right of the lender to demand payment on the outstanding balance of a loan.
- Browse Related Terms: Acceleration, acceleration clause, cash-out refinancing, due-on-sale, Due-on-sale Clause, Loan Acceleration, Maturity, Mortgage Acceleration Clause, Mortgage life insurance, Principal, Revolving Debt
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A clause that allows a lender to declare the entire outstanding balance of a loan immediately due and payable should a borrower violate specific loan provisions or default on the loan.
- Browse Related Terms: Acceleration, acceleration clause, cash-out refinancing, due-on-sale, Due-on-sale Clause, Loan Acceleration, Maturity, Mortgage Acceleration Clause, Mortgage life insurance, Principal, Revolving Debt
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The written approval of the buyer's offer by the seller.
- Browse Related Terms: acceptance, affidavit, Asking Price, Assumable Mortgage, Assumption Clause, Assumption Fee, Assumption of mortgage, Bona fide, Creative financing, Disclosures, Earnest Money, Fair market value, HUD-1 Settlement Statement, non-assumption clause, Offer, Owner Financing, prorate, Rescission, Sale-Leaseback, Seller Take-Back
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All > Business > Finance > Insurance > Life Insurance
- A provision added to a life insurance policy for payment of an additional benefit in case of death as a result of an accident. This provision is often called "double indemnity."
- Browse Related Terms: Accelerated Death Benefits, Accidental Death Benefit, Beneficiary, Cash Value (Cash Surrender Value), Current Assumption Whole Life, Double Indemnity, Face Amount, Living Benefits, Mortality Table, Rider, Variable Life Insurance
The contract governing your open-end credit account, it provides information on changes that may occur to the account.
Office of the Comptroller of the Currency, U.S. Department of the Treasury - Cite This Source - This DefinitionThe contract governing your open-end credit account, it provides information on changes that may occur to the account.
- Browse Related Terms: Account Agreement, Adverse Action, Adverse Action Notice, application, authorization, Available Credit, Billing Error, Credit card account agreement, Credit limit, Debit card, Individual Account, Missing payment, Money market deposit account, Overlimit, Personal Identification Number (PIN), Previous Balance, statement
All > Business > Finance > Personal Finance
An agreement that defines membership eligibility and conditions of your share accounts. It also defines many other important banking operations such as how to order a stop payment on share drafts, transaction limitations on your accounts, overdrafts fees, and what happens if your account becomes dormant. The agreement may disclose if the credit union has a security interest if your loan becomes delinquent or your share account becomes negative. The agreement also discloses if the credit union has a cross collateralization clause for your automobile, for example, it can hold the automobile for security for other loans you have with the credit union.
- Browse Related Terms: Account Agreement, Checking Account (Share Draft Account), Credit card issuer, Credit Union, Credit Union Statement, Dividends, Drawee, Drawee Institution, Financial Performance Report (FPR), Furnisher, Index-linked Share Certificate (SC), Peer Average Ratio, Percentile Rankings, Personal Savings Account, Share Account, Share Certificate, Share Draft Account, Wire transfer
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Your account balance is the amount of money you have in one of your financial accounts. For example, your bank account balance refers to the amount of money in your bank accounts.
Your account balance can also be the amount of money outstanding on one of your financial accounts. Your credit card balance, for example, refers to the amount of money you owe a credit card company.
With your 401(k), your account balance, also called your accrued benefit, is the amount your 401(k) account is worth on a date that it's valued. For example, if the value of your account on December 31 is $250,000, that's your account balance.
You use your 401(k) account balance to figure how much you must withdraw from your plan each year, once you start taking required distributions after you turn 70 1/2. Specifically, you divide the account balance at the end of your plan's fiscal year by a divisor based on your life expectancy to determine the amount you must take during the next fiscal year.
- Browse Related Terms: Account balance, Accumulation period, Accumulation unit, Annuitant, Annuitization, Annuitize, Annuity, Annuity principal, Deferred annuity, Fixed annuity, Hybrid annuity, Immediate annuity, Income annuity, Life expectancy, Lump-Sum Distribution, Minimum required distribution (MRD), Nonqualified annuity, Split-funded annuity, Systematic withdrawal, Variable annuity, Withdrawal
The payment history of an account over a specific period of time, including the number of times the account was past due or over limit.
The payment history of an account over a specific period of time, including the number of times the account was past due or over limit.
Office of the Comptroller of the Currency, U.S. Department of the Treasury - Cite This Source - This Definition- Browse Related Terms: Account History, Bank Statement, Billing Cycle, Cut-off time, Demand deposit, Escheat, Escrow Analysis, Exception Hold, Hold, Inactive Account, Individual retirement account (IRA), Overdraft, Preauthorized electronic fund transfers, Residual interest, Time deposit
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The history of an account over a specific period of time for either shares or loans.
- Browse Related Terms: Account History, Appraisal, Average daily balance, Billing Date, Cash basis accounting, Cash Flow, Credit History, Credit Repair Organization, Grace Period, Minimum finance charge, Periodic rate
Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account.
Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account.
Office of the Comptroller of the Currency, U.S. Department of the Treasury - Cite This Source - This Definition- Browse Related Terms: Account holder, ChexSystems, Electronic banking, Escrow, Foreign transaction fees, Joint Account, Online Banking, Payment Due Date, Service Charge, Trust administrator
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All persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the credit union. The signature authorizes that person to conduct business on behalf of the account without the other account holders consent.
- Browse Related Terms: Account holder, ATM surcharge, Canceled Check (Share Draft), Check Deposit Return, Early Withdrawal Penalty, fee, Fee Charged for Use of Other ATM, Fee Charged for Use of Your Own ATM, Minimum Balance Required, Money Order Fee, Monthly or Annual Fee, Overdraft Fee, Overdraft Protection, Per Check Fee (If Minimum Balance is Not Maintained), Per Check Fee (If Minimum Balance Maintained), Service Fee Per Month
All > Business > Small Business
An account in the general ledger representing the amount owed by the business to its creditors on open purchased of goods and/or services.
- Browse Related Terms: Accounts Payable, Accounts Receivable, Bank Reconciliation, Corporation, Hawaii Capital Loan Program (HCLP), Market, Marketing, Obligations, Partnership, Ratio, Return on Investments (ROI), Services Corps of Retired Executives (SCORE), Subchapter "S" Corporation
All > Business > Small Business
An account in the general ledger representing the amount due the business from its customers for goods and/or services sold on credit.
- Browse Related Terms: Accounts Payable, Accounts Receivable, Bank Reconciliation, Corporation, Hawaii Capital Loan Program (HCLP), Market, Marketing, Obligations, Partnership, Ratio, Return on Investments (ROI), Services Corps of Retired Executives (SCORE), Subchapter "S" Corporation
All > Business > Finance > Personal Finance
An accredited investor is a person or institution that the Securities and Exchange Commission (SEC) defines as being qualified to invest in unregistered securities, such as privately held corporations, private equity investments, and hedge funds.
The qualification is based on the value of the investor's assets, or in the case of an individual, annual income.
Specifically, to be an accredited investor you must have a net worth of at least $1 million or a current annual income of at least $200,000 with the anticipation you'll earn at least that much next year. If you're married, that amount is increased to $300,000.
Institutions are required to have assets worth $5 million to qualify as accredited investors. The underlying principal is that investors with these assets have the sophistication to understand the risks involved in the investment and can afford to lose the money should the investment fail.
- Browse Related Terms: Accredited investor, Appreciation, Boiler room, Capital preservation, churning, Collectible, Financial pyramid, Formula investing, Haircut, Indexed annuity, Inflation-adjusted return, opportunity cost, Real interest rate, Risk, Risk Tolerance, Time value of money
Interest that has been earned but not yet paid.
Office of the Comptroller of the Currency, U.S. Department of the Treasury - Cite This Source - This DefinitionInterest that has been earned but not yet paid.
- Browse Related Terms: accrued interest, Delinquency, Home Equity Line of Credit (HELOC), Interest rate, Lien, Minimum Payment, Past Due Item, Refund
The estimated amount of interest that would be received upon a sale. In most cases, it is calculated from the date of the last coupon payment up through the closing date of the account statement.
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Interest that has been earned, but not yet paid, to the account holder for a share account; or interest due, but not yet paid by a borrower on a loan.
Accrued interest is the interest that accumulates on a fixed-income security between one interest payment and the next.
The amount is calculated by multiplying the coupon rate, also called the nominal interest rate, times the number of days since the previous interest payment.
Interest on most bonds and fixed-income securities is paid twice a year. On corporate and municipal bonds, interest is calculated on 30-day months and a 360-day year. For government bonds, interest is calculated on actual days and a 365-day year.
When you buy a bond or other fixed-income security, you pay the bond's price plus the accrued interest and receive the full amount of the next interest payment, which reimburses you for the accrued interest payment you made when you purchased the bond. Similarly, when you sell a bond, you receive the price of the bond, plus the amount of interest that has accrued since you received the last interest payment.
On a zero-coupon bond, interest accrues over the term of the bond but is paid in a lump sum when you redeem the bond for face value. However, unless you hold the bond in a tax-deferred or tax-exempt account, you owe income tax each year on the amount of interest that the government calculates you would have received, had it been paid.
- Browse Related Terms: accrued interest, Bonds (Corporate), Coupon Rate, Debt, Full faith and credit, General obligation (GO) bond, Insured bond, Senior bond, Treasuries