a
Accumulation Unit
Type of unit in a unit trust where the income is reinvested automatically, thereby increasing the price of the unit.
Adjustable Rate
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.
AER
Annual Equivalent Rate - the interest you would earn in a year if you left all your monthly interest in your savings account.
Aggressive Growth Fund
An investment portfolio that seeks maximum growth by investing in stocks believed to have above-average growth potential, often
All Share Index
A weighted average of the market prices of all shares listed on the Johannesburg Stock Exchange. The index gives the best indica
Amortization
The gradual, systematic payment of a debt, such as a mortgage or other loan, in installments of principal and interest for a def
Annual Cap
A limit on the amount of adjustment in the interest rate on an adjustable rate mortgage over a twelve-month period. Also called
Annual Percentage Rate (APR)
The APR is the interest rate figure that indicates the total cost of borrowing, including any charges.
Annuity
A stream of equal payments to an individual, such as to a retiree, that occur at predetermined intervals (monthly or annual).
Appraisal
A written opinion by a professional of the market value of property.
Appreciation
An increase in the value of a property due to improvements made by the owner or to changes in the market.
APR
Annual Percentage Rate. The effective rate taking into account compounding and other fees.
ARM
Adjustable Rate Mortgage
Arrangement Fee
A charge made by some lenders for arranging your credit facilities.
Asset
An item that is intended to be used for several years such as a building or a vehicle.
Authorised Limit
This represents the maximum amount of our debt at any one time during the year, under the new Prudential borrowing regime.
Average Maturity
Bond investors can average the maturity dates of a portfolios debt securities to come up with the portfolios average maturity.
b
Bad Credit
A rating you receive when you default on loan obligations. A bad credit rating can affect your chances of credit approval.
Balance Transfer
The process of moving an unpaid credit card debt from one creditor to another.
Balloon Mortgage
A mortgage that offers low rates for an initial period of time ( 5, 7, or 10) years; after which the balance is due
Balloon Payment
The final payment (balance due) of a balloon note.
Bank Draft
A check drawn by one bank against funds deposited into its account at another bank, authorizing the second bank to make payment
Bankruptcy
A federal law Whereby a persons assets are turned over to a trustee and used to pay off outstanding debts.
Bear Market
A market that is experiencing a consistent fall in share prices.
Bridge Financing
the purchase of the second property happens before the sale of the first is completed then another loan may be needed.
Broker
An agent who brings two parties together, enabling them to enter into a contract to which he is not a principal.
Building Society
A financial institution owned by its members (rather than by shareholders)
Bull Market
A market with the general prices advancing
c
C P R ( Constant Prepayment Rate)
CPR, the Constant Prepayment Rate (CPR), is the rate at which the securities prepay principal.
Cap
The maximum amount that an interest rate can increase on an adjustable-rate mortgage.
Capital
When investing, this is your original investment. When borrowing, this is the amount of debt, excluding interest.
Capital And Interest Mortgage
Also known as a repayment mortgage.
Capital Appreciation
When the value of an investment increases, this is appreciation. Capital appreciation is the investment objective of mutual fund
Capital Gain
Profit from the sale of an asset or security.
Capitalization
A companys amount of capital. Usually measured as the sum of a companys market value of equity and debt.
CD(Certificate Of Deposit)
Receipts for funds deposited in bank or S&L for a fixed period. The funds earn a fixed interest rate.
ChargeOff
When a creditor elects to transfer a delinquent account to a bad debt category and turns the account over to collection agency
Collar
An upper and lower limit on the interest rate on a floating-rate note.
Collateral
Assets that are used as security for a loan.
Compound Interest
This is interest earned on interest and can make a big difference to the value of long-term savings.
Credit Rating
A score awarded to you by lenders to indicate whether you are creditworthy or not.
Credit Score
A statistically derived, numerical score, based on various characteristics of an individuals credit history, which measures cred
Credit Union
is an agency providing some financial services to its members.
Creditor
A person or business from whom you borrow or to whom you owe money.
d
Daily Compounding
An interest calculation in which interest is added to the principal each day. Interest is then earned on the new balance.
Debit
With a savings or checking account, an amount withdrawn or removed from the account balance (see Credit).
Debit Card
A bank card with direct access to a cardholders account, usually a checking or savings account.
Debt
IOU, such as bank loans, bonds, commercial paper, government bonds and bills.
Debt Consolidation Loan
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period.
Debtor
A person or entity (such as a bank) that owes money.
Deferred Income
The liability that occurs when a business receives payment in advance for a service to be rendered in the future.
Deferred Payments
Payments to be made at some future date. See graduated payment mortgage.
Depreciation
Decrease in the value of an asset over time.
Direct Deposit
A system wherein amounts are transferred from a payors checking account to the accounts of payees no matter where they bank.
Discharge Of Debts
A bankruptcy courts erasure of the debts of a person or business that has filed for bankruptcy.
DiscountARM
In an ARM with an initial rate discount to give the borrower a lower payments for part of the mortgage term.
