My Financial Healthcheck

Interest Rate: the amount of interest charged on a monthly loan payment; usually expressed as a percentage.

Interest: a fee charged for the use of money.

Index: a measurement used by lenders to determine changes to the interest rate charged on an adjustable rate mortgage.

Inflation: the number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation.  It results in a decrease in the dollar’s value.

Insurance: protection against a specific loss over a period of time that is secured by the payment of a regularly scheduled premium.

Judgement: a legal decision; when requiring debt repayment, a judgment may include a property lien that secures the creditor’s claim by providing a collateral source.

Loan- money borrowed that is usually repaid with interest.

Lien: a legal claim against property that must be satisfied when the property is sold.

Loan-to-Value (LTV) Ratio: a percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.

Lease Purchase: assists low-to moderate-income homebuyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment.

Loan Fraud: purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Lock-In: since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss Mitigation: a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan.