Glossary

- Adjustable-rate mortgage (ARM)

A mortgage having an interest rate that can change at designated intervals, based on a financial index.

- Amortization

The gradual reduction of the principal of a mortgage by scheduled installment payments.

- Amortization schedule

A schedule that shows the portions of each payment that are applied to interest and to principal. It also shows the loan balance remaining after each payment.

- Annual Percentage Rate (APR)

How lenders state the interest rate on a loan. The lower the APR, the lower the amount of interest you'll pay.

- Annual Percentage Yield (APY)

How credit unions and banks tell you how much money you'll earn on your savings if you leave a lump sum in your account for one full year. Use it to compare what institution can give you the best return on your money.

- Appraisal

A professional assessment of the market value of a property.

- Automatic Teller Machine (ATM)

A machine that can be used to withdraw money from your account, check your account balance, or transfer money between your checking and savings accounts. You must have an ATM card in order to use the machine.

- ATM Surcharge

A fee charged by an ATM owner to a non-customer using the ATM. They range from 50 cents to $5.00 or more. Heavily used ATMs (such as those at tourist attractions, airports, and casinos) often have the highest surcharges. Typically the ATM will give the user a chance to cancel the transaction before the account is charged.

- Certificate

An account where you deposit money for a specific amount of time (at St. Anne, between 6 months and 5 years). The amount that you earn on a certificate is greater than what you earn in other types of saving accounts, but there is a penalty or fee for taking your money out early.

- Check Card

A Check Card is a dual-purpose plastic card you use to access your accounts. When it functions as a Debit Card, it's being used to make purchases "debited" against the balance in your checking account. These purchases can be made at merchants by choosing the “credit” where you don't enter your PIN and purchases clear in a day or two, or by electronic Point-of-Sale where you "swipe" your card through a terminal and enter your PIN (you select "debit" and the funds immediately come out of your checking account). When it functions as an ATM Card, you can access every account available to you at the ATM for transactions.

- Closing

The legal procedure in which the transfer of property becomes final. Also called settlement.

- Closing costs

Costs incurred by the buyer and seller in transferring ownership of a property.

- Collateral

Anything of value that you promise to give the lender if you can't pay back a loan.

- Co-signer

A person who signs and assumes joint liability with another person for repayment of a debt.

- Credit report

A report of an individual's credit history prepared by a credit bureau and used by a lender to determine a loan applicant's credit worthiness.

- Credit Union

A cooperative financial institution, owned and controlled by the people who use its services.

- Creditor

A person or business to which you owe money.

- Deed

The legal document conveying title to a property.

- Delinquency

Failure to make a loan payment on time; the loan is not yet in default.

- Deposit

To put money into an account.

- Depreciation

A decline in property value; opposite of appreciation.

- Direct Deposit

At most companies, employees can have their employer deposit the employee’s pay directly into a financial institution checking account or savings account instead of giving the employee a paycheck to deposit themselves. This is done by an ACH (Automated Clearing House) where the funds are wired instantaneously from the employer's financial institution to the employee's financial institution. The money arrives faster, there is no risk of loss or theft, and there are no payday lines to stand in. Direct deposit is always set up by the employee through their employer's payroll department.

- Dividends

Portion of earnings companies pay their owners. There are two kinds: (1) money you earn on your credit union savings accounts (as a member, you are an owner of St. Anne Credit Union) or (2) the share of earnings companies pay you when you own their stock.

- Down Payment

The cash difference between the sale price and the loan amount.

- Endorse

To sign one's name as a payee on the back of a check.

- Equal Credit Opportunity Act (ECOA)

A federal law prohibiting lenders from denying loans on the basis the borrower's race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

- Equity

The difference between the market value of a property and the owner's outstanding mortgage balance; measures the degree of ownership.

- Field of membership

The groups with a common bond that a credit union serves. May include employers, schools, communities, etc. Over the years, a credit union's field of membership may expand by merger or acquisition of new sponsor groups.

- Fixed Rate

An interest rate that remains the same for an agreed upon amount of time.

- Fixed-rate mortgage

A mortgage in which the interest rate does not change during the entire life of the loan.

- Home Equity Loan

This is a loan against the portion of a home's appraised value on which you do not owe money – basically the value of a home, minus the current balance of any mortgage loan on the property. There are primarily two kinds of home equity loans. A Home Equity Line of Credit allows you to borrow money, pay it back, and borrow it again as with a credit card account. The interest rate can change during the loan. A Home Equity Installment Loan typically is for a pre-set length of time at a fixed interest rate.

- IRA

Individual Retirement Account. A government-sponsored retirement savings plan, offering tax incentives to individuals.

- Loan

Money given to a person who agrees to repay it at a certain time.

- Member

A person who holds an ownership share in a credit union and is thus eligible for its membership benefits.

- Money Market Account

A liquid deposit that typically pays higher dividends than regular savings accounts in exchange for limited electronic or third-party withdrawal privileges.

- NCUA

National Credit Union Association – a U.S. government agency that regulates and insures credit unions.

- Notary Public

One who attests or certifies writings (as a deed) to make them authentic and takes affidavits, depositions, and protests of negotiable paper.

- Non-Sufficient Funds

This is when a check, purchase, or ATM transaction is charged against an account and there is not enough money in the account to cover it. All financial institutions charge fees when this occurs unless there is some kind of overdraft protection in place. Purposely writing checks when there are no funds to cover them is considered a crime.

- Overdraft Protection

A contingency plan that transfers funds to checking from some other source when the checking balance is insufficient to cover checks or other items presented for payment.

- PIN

Your Personal Identification Number is the secret code you need to use your Check Card or ATM Card at an ATM or POS terminal.

- PMI (Private Mortgage Insurance)

Insurance provided by a private company protecting the lender against loss in the form of a percentage of the loan amount which can be financed.

- POS (Point-of-Sale)

A purchase made from a merchant using an ATM or check card. Funds are deducted automatically from your checking account to cover the purchase.

- Stop Payment

This is when you instruct your financial institution not to honor a check you have written on your account when it is presented for payment. Financial institutions charge a fee for this service.

- Share Draft Account

A checking account, where funds are "drafted" or withdrawn from your balance or "shares" by check or electronic means.

- Statement

A periodic report of transactions on your account, including deposits, withdrawals, payments and earnings.

- Term

A set amount of time for a financial product. This term usually refers to the number of months before a particular loan must be completely repaid or the number of months funds in a certificate account must be on deposit before they may be withdrawn without penalty.

- Transfer

Moving funds from one of your accounts to another account.

- Variable Rate

An interest or dividend rate that can fluctuate during the term of the account.

- Withdrawal

Taking money out of your account.