Terms with Category Financial Banking

  • Electronic Funds Transfer (EFT) Acronym, Important,
    • The transfer of money between accounts by consumer electronic systems such as automated teller machines (ATMs), and electronic payment of bills.
    Also known as e-Transfer.
  • Capital Gain (CG) Acronym, Important,
    • The profit made by the seller when real estate or other capital assets are sold. Capital gains are taxed more favourably than earned income. However, this can be dependent on your tax bracket and the length of time you owned the asset before it was sold. You could pay approximately one-third to one-half less tax than you would pay on the same amount of earned salary.
  • Repossession Definition,
    • The taking back of property after a borrower has stopped making payments.
  • Trust Definition,
    • A fund established like a will, specifying how money or property will be disbursed, lists the recipients or beneficiaries and names one or more trustees to manage the assets. An irrevocable trust can't be changed after the terms are finalized; a revocable trust has more legroom in how much can be transferred, but is usually costlier to maintain.
  • Authorized User Definition,
    • Any person to whom you give permission to use a credit card account.
  • Large Value Transfer System (LVTS) Acronym,
    • System being created by the Canadian Payments Association that will settle large value payments, possibly $50,000 and over, at the central bank on a same-day basis.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
  • Reverse Mortgage Definition, Important,
    • A loan that allows an older homeowner to convert built-up equity into cash. The loan comes due when the owner dies, sells the house or moves out.
  • Foreclosure Definition,
    • The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
  • Foreign Currency (FCY) Acronym,
    • Paper money and coins from other countries.
  • Four Pillars Definition,
    • Refers to the main types of financial institutions: banking, trust, insurance, and securities.
  • Pre-authorized Payments Definition,
    • A way to set up a monthly payment to be automatically paid from a bank account.
  • Qualifying Rate Definition,
    • The mortgage rate that one must qualify for when applying for a variable rate or a term less than 5 years, so that if rates increase, the borrower can continue to make payments.
  • Option Definition,
    • A legal agreement giving someone the right to buy, sell or lease a property or item at specified terms for a specified period.
  • Payday Loan Definition,
    • A short-term loan with an extremely high interest rate.
  • Valuation Definition,
    • The estimation of a property's price value through an appraisal.
    • The process of finding the worth of an asset or business.
  • Electronic Data Interchange (EDI) Acronym,
    • EDI is a system that companies use to exchange business information electronically, virtually eliminating paperwork.
  • Co-branded Card Definition,
    • A type of affinity card issued through a partnership or alliance between a bank and another retail company. For instance, a large department store may co-brand a card with a bank. The card would have two brand names on it -- the bank's name and the store's name. Usually, the attraction of the card is special deals with the retail partner. Many -- particularly the ones affiliated with airlines that offer air miles -- are popular enough to command a hefty annual fee.
  • Rate Definition,
    • Percentage a borrower pays for the use of money, usually expressed as an annual percentage.
  • Mint Condition Definition,
    • A term describing a building or item that's just like new.
  • Penalty Definition,
    • In mortgage terms, a penalty is a set rate or length of time the penalty will be charged based on the remaining loan amount. The penalty is usually three months interest or interest rate differential.
  • Loan Shark Definition,
    • A lender that provides loans at usuriously high interest rates, often ensuring repayment with the threat of force.
  • Non-recourse Debt Definition,
    • A loan secured by collateral where the borrower is not personally liable.
  • Capitalization Definition,
    • An estimate of the value of a rental or commercial property using the rate of return on investment and the property's annual net operating income.
  • Mortgage Banker Definition, Important,
    • An employee of a large bank who finds financing for the general public.
  • Credit Rating (CR) Acronym, Very Important,
    • A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.
    A metric to measure the credit worthiness of a debtor.
  • Loan Application Definition,
    • A document in which a prospective borrower details his or her financial situation to qualify for a loan.
  • Return Definition,
    • Any increase in value or in income you earn on purchase or investment.
  • Late Payment Definition,
    • A sum a borrower sends to a lender that is received past the date when it was due.
  • Microeconomics Definition,
    • Looking at the individual parts of the economy, with emphasis given to the market process and how it works.
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