Glossary of Terms
Brush up on your terminology. Start with the ones below.
- APR (Annual Percentage Rate)
- How much it costs you to borrow from the bank. Essentially, it is a percentage of the money you borrowed that you will be paying to the bank every year.
- The amount borrowed or the amount still owed on a loan, separate from interest.
- Home Equity
- The percent of your home that you own and can borrow money against.
- Fixed Rate
- A secure and stable rate for the entire life of the loan. Your payments will stay the same, leaving no room for surprises.
- Variable Rate
- Fluctuates depending on the market. It is useful if you plan to play off a debt quickly, while rates are still low.
- The paying off of debt with a fixed repayment schedule in regular installments over a period of time.
- LTV (Loan-to-Value)
- A ratio that is calculated by dividing the remaining loan balance by the present market value of your home.
- Debt Consolidation
- A smart option that combines several higher interest debts into a single, new loan at a lower rate.
- Replace an existing loan with a new loan offering better terms.