Financial jargon can be pretty overwhelming. Words that you've known all your life suddenly seem to make no sense whatsoever in this context.
That's why we've compiled a list of terms—some of which you've probably seen on this very website—that we think every member should know more about.
Of course, if you still have questions, just pick up the phone. The folks at our Call Center know all about this stuff.
Adjustable Mortgage Loans (ARM)
A mortgage loan or deed of trust, which allows the lender to adjust the interest rate in accordance with a specified index periodically and as agreed to at the inception of the loan.
Annual Percentage Rate (APR)
Sometimes also called the interest rate. The yearly interest rate or percentage that one pays on an outstanding balance in the form of interest.
Amortization
The process of fully paying off indebtedness by installments of principal and earned interest over a definite time.
Amortization Schedule
The schedule of payments for paying off a loan.
Appraisal
A professional opinion of an asset's market value as of a specific date.
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Balance Transfer
The process of moving an unpaid credit card balance from one issuer to another.
Collateral
Also referred to as security. Property that is offered to secure a loan or other credit and that becomes subject to seizure on default.
Compound Interest
Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods.
Cosigner
Another person who signs for a loan and assumes equal liability for it.
Credit
The promise to pay in the future in order to buy or borrow in the present. The right to defer payment of debt.
Credit Union
A financial cooperative organization of individuals with a common affiliation (such as employment, labor union membership, or place of residence). Credit unions accept deposits of members, pay interest (dividends) on them out of earnings, and primarily provide consumer installment credit to members.
Credit History
A record of how a person or company has borrowed and repaid debts, used as a guide to determine whether the consumer is likely to pay accounts on time in the future.
Custodial Account
A Savings, Money Management or Term Account managed by a parent or legal guardian for a minor. Only the custodian of the account (the primary member) may conduct transactions. Click here to visit the Custodial Account page.
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Default
Failure to meet the terms of a credit agreement.
Discount Points
Amount payable to the lending institution by the borrower or seller to increase the lender's effective yield. The more discount paid results to a lower interest rate; the less discount points paid results to a higher interest rate.
Dividend
A share of earnings distributed to shareholders of a credit union
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Electronic Signatures (E-Signatures)
The term 'electronic signature' means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record (U.S. E-Sign Act - Section 106).
However, for such an electronic "symbol" to be legally binding, it is important that the symbol provide authentication of the party who created it, ensure that what was signed cannot be altered, ensure that the party understood that by creating the symbol the party was willingly signing, and that the party is able to keep an original of the data and his/her electronic signature for his/her own records.
Electronic signatures are legally recognized, even when a statute uses terms like "in writing" or "signed."
Escrow
Money, documents, real estate or securities deposited with a neutral third party (the escrow agent) and then disbursed upon fulfillment of certain established conditions. The escrow agent's role is to protect either side of a transaction from the other side's unauthorized use of funds and to ensure an arms-length transaction between buyer and seller.
Equity
In real estate, the difference between fair market value and current indebtedness; also referred to as the owners interest.
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FHA Loan
A loan insured by the Federal Housing Administration, a part of the Department of Housing and Urban Development. FHA insurance enables lenders to loan a very high percentage of the sale price.
Finance Charges
The price paid to a lender for the use of borrowed money. Interest is charged as a percentage of your outstanding balance (purchases and charges reduced by payments or credits posted). This percentage, or interest rate, can vary from card to card.
Fixed Rate
A set APR that does not change in response to interest rate changes and conditions. A Variable Rate periodically goes up or down based on fluctuations in market interest rates as reflected in a published index (e.g., the Prime rate published in the Wall Street Journal).
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Home Equity Loan
A fixed- or variable-rate loan, secured by a mortgage lien, that allows a homeowner to borrow against equity in their house to pay for repairs or other home improvements, refinance other debt or use for other purposes.
Interest Rate
The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the credit risk of the borrower and the inflation rate. Interest rates can be calculated as simple, compounded or effective.
Individual Retirement Account (IRA)
A retirement savings account for individuals. Deposits may be tax-deductible. These contributions cannot exceed specific amounts without penalties.
Interest
The amount paid for the use of money. Thus, financial institutions pay savings depositors interest for the use of the funds on deposit, and borrowers pay financial institutions interest for the use of the money advanced to them.
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Lien
A legal claim against an asset, like a home or auto, which is used to secure a loan.
Loan-to-Value Ratio
Also known as LTV. It is the amount borrowed (loan) divided by the appraised value of the collateral. It is expressed as a percentage. The collateral value is determined by either an appraisal or recent arms-length transaction. For example, a $20,000 loan on a car that was recently appraised at $25,000 has an LTV of 80 percent.
Login ID
Your Login ID is your member number (account number), unless you elected to create an alternative ID. If you do not remember your Login ID, please contact our Member Service Team at (800) 874-5544. (Overseas members please call 001-914-641-3700)
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Money Management Account
This is a tiered, dividend-bearing, liquid savings account. Click here to visit our Money Management page.
Mortgage Insurance (MI)
Insurance which protects mortgage lenders against loss in the event of default by the borrower. This allows lenders to make loans with lower down payments. Also known as private mortgage insurance or PMI. PITI Acronym for the items included in a monthly mortgage payment: principal, interest, taxes, and insurance.
Overdraft
When the amount of a paid check or other withdrawal exceeds the available balance in a checking account (can result in fees).
Password
For your first-time login to Online Banking, your password is your four-digit VoiceConnect /Kiosk PIN. After your first-time login, you will be prompted to select a new password with six or more digits (numbers and/or letters).
PIN
Personal Identification Number. Secret code you choose for your card that enables you to access your money or perform banking transactions through the ATM as well as make purchases without signing a sales receipt at merchants that have PIN pads. Your PIN should not be shared with anyone.
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PMI
See Mortgage Insurance.
Pre-Qualification
Evaluation of a potential borrower's financial status to determine the size and type of mortgage available to the borrower.
Principal
The amount borrowed, or the part of the amount borrowed which remains unpaid (excluding interest). Also known as the part of a monthly payment that reduces the outstanding balance of a mortgage.
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Secure Access Code
A one-time Online Banking access code for security purposes obtained by phone or e-mail. This code must be obtained on both the first and second logins if using a new computer (one that you have not previously used to access Online Banking) or new browser on your computer (e.g., Internet Explorer, Firefox). On the second login, you will have the opportunity to "register" your computer and/or browser so that you will not need a Secure Access Code for every login going forward on that computer. For additional assistance contact our Member Service Team at (800) 874-5544. (Overseas members please call 001-914-641-3700)
Term
The period of time of a loan. Auto loans are generally two to fours years in duration, while home mortgage loans generally have 15- or 30-year terms.
Term Account
This dividend-bearing savings account has a fixed term and interest rate. It is intended that the money in the account be held until maturity, at which time it may be withdrawn together with the accrued dividends. A penalty will be imposed if funds are withdrawn prior to the maturity date (refer to the Credit Union fee schedule). If the money is not withdrawn (by contacting the Member Service Team at (800) 874-5544), it will be rolled over to another term account. Click here to visit our Term Account page.
Title
A legally binding document that establishes evidence of ownership of an asset and any liens or other claims filed against the asset. A title should be examined for any recorded liens, which "encumber" a title and make its transfer more difficult than that of an unencumbered title. An unencumbered title is also referred to as a "clean" title.
Title Insurance
Insurance against loss resulting from defects of title of public record.
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Underwriting
A loan review process that begins with the acceptance of a loan application and ends with a decision to either approve or deny the loan request.
VoiceConnect/Kiosk PIN
A four-digit number used for your first-time login to Online Banking, VoiceConnect (24-hour phone service) and Quorum Kiosks. You may have received this number when you opened your membership online or in the mail, if you established membership at a Quorum Service Center, over the phone with a Member Service Representative, or by mailing us a paper application.
