Personal Finance Dictionary

We know just how hard it can be to understand all the terms related to personal finance. It may even be a little intimidating when you're looking for a loan, but you can't understand all the difficult terms you read about. That's why we created this dictionary, as an indirect way of helping you secure the best possible loan for yourself. The dictionary words are listed in order from A to Z, for easy browsing. Good luck!

Subprime Mortgage

A mortgage type usually made out to borrowers with bad credit ratings. The mortgage lender decides that the borrower may have a high risk of defaulting on the loan, due to low credit ratings, and therefore charge a higher interest than on a normal mortgage loan to make up for it.

Temporary Mortgage Lender

A lender that, instead of holding the loans themselves, sell the loans into the secondary market. This is the most common procedure amongst mortgage lenders.

Two-Step Mortgage

A specific type of mortgage that allows the borrower to get a fixed-interest rate for an initial period of time. After that period, the interest rate is adjusted to the current market rates. At that time, the borrower might be given an option of selecting a fixed-interest rate or switch to a variable interest rate.

Unsecured Loan

A loan that is given to the receiver without him/her being able to give any guarantess of paying back. No physical assets are used for collateral either. Very risky for the lender, and is therefore most often used for small or short-term loans.

VA Loan

A special kind of mortgage loan, designed to help war veterans finance a home. Requires a certificate of eligibility from the borrower and allows them to borrow up to 100% the value of the home.