Consumer Credit — page 2 of 2

Consumer Credit terms

101. Loan Term The period of time between the start date and the termination date of a note or mortgage.
102. Loan-to-Value Ratios (LTV) (LTV) The ratio of mortgage amount to value or sales price of a home. (Mortgage amount divided by value or sales price.).
103. Loan/Mortgage Broker An organization that provides (or offers to provide) the service of improving your credit record, obtaining a loan for you, or providing advice or…
104. Locking Your Interest rate on a mortgage loan request for a specified period of time.
105. Maine State Housing Authority (MSHA) (MSHA) A mortgage program available only to first-time homebuyers within the State of Maine . Income limitations are applicable.
106. Margin See Margin, or margin costs
107. MCCC-1 Annual notification/reporting form required under Title 9-A M.R.S.A.§6-202 for all creditors conducting Maine consumer credit business.
108. Membership fee See annual fee.
109. Minimum interest charge The minimum amount of interest you will be charged if you are charged any interest. For example, if your total interest charge is $0.
110. Minimum Payment The minimum dollar amount that must be paid each month on a loan, line of credit, or other debt.
111. Mortgage A debt instrument used in a real estate transaction where the property is the collateral for the loan.
112. Mortgage Company (Supervised Lender) A Supervised Lender is any person authorized to make or take assignments of supervised loans either under a license issued by the Bureau, or as a…
113. Open-ended credit A plan in which the creditor anticipates repeated transactions, and for which there is a finance charge computed on any unpaid balance.
114. Opt-In Giving your credit card company or bank permission to include you in a particular service.
115. Opt-out Declining a particular service offered by your bank.
116. Origination Fee An origination fee is an amount, usually calculated as a percentage of a mortgage loan or home equity loan, which a lender charges for processing your…
117. Over-the-limit fee A fee charged if your account balance goes over your credit limit. You will not be charged this fee unless you have authorized your credit card company to…
118. Overdraft When the amount of money withdrawn from a bank account is greater than the amount actually available in the account, the excess is known as an overdraft…
119. Participation fee See annual fee.
120. Penalty APR The APR charged on new transactions if you trigger the penalty terms in your credit card contract.
121. Penalty fees Fees charged if you violate the terms of your cardholder agreement or other requirements related to your account.
122. Periodic Rate The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily…
123. Pest Inspection Required for FHA loans in some areas to determine if there is an infestation of wood-boring insects or other pests in the home.
124. Points and Origination Fees Fees paid to the lender for the loan. One point equals 1 percent of the loan amount. Points are usually paid in cash at closing.
125. Premium credit card A credit card that offers high credit limits and often has additional features like product warranties, travel insurance, or emergency services.
126. Prepayment Penalty (Mortgages) A charge assessed by a creditor when the consumer pays off all or part of the loan before it is due.
127. Prime Rate The prime rate is a benchmark for interest rates on business and consumer loans.
128. Principal Face value of an obligation, such as a bond or a loan, that must be repaid at maturity.
129. Principal, Interest, Taxes, and Insurance (PITI) (PITI) Common acronym for principal, interest, taxes, and insurance—used when describing the monthly charges on a mortgage.
130. Private Mortgage Insurance (PMI) (PMI) Insurance offered by a private insurance company that protects the bank against loss on a defaulted mortgage up to the limit of the policy (usually 20 to…
131. processor a person who acts as a liason between your Loan Officer and the Underwriter to help facilitate the flow of paperwork which takes you from loan application…
132. Protected balances Protected balances are amounts owing on the account that under law are not subject to an increase in interest rates or fees.
133. Purchase APR The APR you will pay for purchases if you carry a balance on your credit card. For many cards, you only have to pay interest on purchases if you carry…
134. Purchases A purchase is the use of your card to buy or lease products or services. The purchase of cash or cash equivalents, like casino chips or lottery tickets…
135. Rate Lock The period of time that a mortgage company will guarantee a loan's interest rate, usually 30 or 60 days.
136. Recording Fees Charged by the Registry of Deeds for the filing of documents or details of a legal document to make them a matter of public record.
137. Refinance The repayment of a debt from the proceeds of a new loan using the same property as security.
138. Rescission The cancellation, or “tearing-up,” of a contract. Some consumer loans (home mortgages) feature a 3-day right of rescission during which the borrower…
139. Retail credit card A credit card associated with a retail store. Depending on the type of card, you may be able to use it at locations other than the one where you received…
140. Returned payment This is a payment that you make to us that is not honored by your financial institution.
141. Rural Development (RD) (RD) The "Rural Development" mortgage program is governed by the USDA and is designed to promote homeownership in rural areas.
142. Secured credit card A secured credit card is linked to a savings account you open with the bank or other financial institution offering the card.
143. Security The term "security" covers a broad variety of financial instruments, including stock, promissory notes, bonds, debentures, limited partnership interests…
144. Security Interest The creditor’s right to take property or a portion of property offered as security.
145. Set-up fee A fee that may be charged when you open a new credit card account.
146. Standard payment instructions You must pay your credit card bill in a manner that meets all the following conditions: You must pay in U.S.
147. Supervised Lender A person authorized to make or take assignments of most consumer loans and residential mortgages, either under a license issued by the Administrator…
148. Supervised Loans Consumer loans, including loans made with open-end credit, in which the finance charge is greater than 12.
149. Telemarketing Fraud Unsolicited telephone call from a criminal who tries to trick the consumer into disclosing personal information (bank account number, credit card number…
150. Third Party Fees a fee that you pay up front for a mortgage broker to pay to another party, such as to obtain a credit report, order an appraisal, or to do a title search.
151. Title A title is a legal document proving ownership of a piece of property. If you are buying real estate you authorize a title search, or examination of…
152. Title Insurance Title insurance protects your lender's interest in your home and real property in case its ownership is contested in court.
153. Title Search A title search is an examination of property records by a title company or attorney to ensure that the person from whom you are buying a piece of property…
154. Treasury bill rate The rate paid by the government on its short-term borrowing. See index.
155. Underwriting The purchase for resale of a new issue of securities by an investment dealer or group of dealers.
156. Variable-rate APR An APR that may change depending on other factors, such as the prime rate or Treasury bill rate.
157. Variable-Rate Loans See Adjustable Rate Loans
158. Waiver Under the conflict of interest statute, 18 U.S.C. § 208, a waiver permits an employee to participate in specified Government matters which would…
159. Workout agreement A type of debt management plan.
160. Workout arrangement This is a special arrangement between us and you in which we agree to a temporary reduction in applicable interest rates or fees in return for your…