Amortization

A loan payment schedule set up in installments over an agreed-upon period, during which the principal and interest are paid off. 


APR - Annual Percentage Rate

The annual cost of a loan, which includes the principal, interest, and any origination fees, and is expressed as a percentage. 


APY - Annual Percentage Yield

A percentage rate reflecting the total amount of interest paid on a deposit account (checking, savings, CDs, IRAs), based on the interest rate and the effect of interest compounding for one year. 


Assets

Personal possessions of value, including cash, real estate and investments. 


ATM

A machine which enables a customer to perform basic banking activities (e.g., check your balance, withdraw cash, deposit or transfers funds, etc.)


ATM Card 

A bank card which allows you to make withdraws or deposits through an Automatic Teller Machine. (ATM). 


Automated Clearing House (ACH)

A nationwide electronic funds transfer network that enables participating financial institutions to distribute electronic credit and debit entries to bank accounts and to settle such entries. 


Automated Teller Machine (ATM) 

Commonly called an ATM, it's a terminal activated by a magnetically encoded card that allows customers of a bank or other financial institution to perform basic banking activities (e.g., check your account balance, withdraw cash, deposit or transfer funds, etc.) An interconnection of these terminals allows customers to conduct certain transactions around the nation and the world, usually subject to a surcharge fee. 


Automatic transfer 

An arrangement that moves money at certain specified times, often monthly, from an interest-bearing or savings account into a non-interest, usually checking, account for the payment of checks or other drafts. 


Browser

Short for Web browser, a software application used to locate and display Web pages. The two most popular browsers are Microsoft Internet Explorer and Netscape Navigator. Both of these are graphical browsers, which mean that they can display graphics as well as text. 


Cashier's Check

A check drawn on and issued by a bank.


Certificate of Time Deposit (CD) 

A time deposit that is payable at the end of the specified term. A Certificate of Deposit generally pays a fixed interest rate and generally offers a higher interest rate than other types of deposit accounts. If a withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. 


Check Card 

A bank card that lets you access your money from an ATM or make purchases at merchants that accept Visa. The amount of purchase is withdrawn from your checking account as if you had written a check. 


Collateral 

Property (real, personal or otherwise) pledged as security for a loan. Collateral may also be any supplementary promise of payment, such as a guarantee. 


Co-signer

A person who signs co-signs a promissory note that is taken out by another individual(s) or business. All parties take responsibility for the debt if any of the others renege. 


Credit Bureau

An agency which collects information on an individual(s) to determine their creditworthiness.


Credit Rating / Scoring

A ranking (based on detailed financial analysis by a credit bureau) of one's financial history, specifically as it relates to their ability to meet debt obligations. Lenders use this information to decide whether to approve a loan. 


Electronic Funds Transfer 

Any transfer of funds initiated by electronic means, such as an electronic terminal, telephone, computer, ATM or magnetic tape. 


Encryption 

The conversion of data into a secret code and used to provide security in the transmission of data. Nationwide requires devices to support 128 bit encryption to access Internet Banking. 


Equity 

The difference between the value of the property and the total dollar amount of any recorded mortgages and other liens secured by the property. 


Escrow

Escrow includes all funds collected to cover expenses to be paid under the Mortgage including, but not limited to taxes, special assessments, ground rents and other charges that are or may become first liens on the Mortgaged Property, as well as property insurance premiums and mortgage insurance premiums. 


Financial Statement

This is a written report taken by a lender which describes the financial status of a commercial or agricultural account. This includes an income statement and a balance sheet, and often also includes a cash flow statement. Financial statements are usually compiled on an annual basis. 


Fixed interest rate

An interest rate that's fixed for a length of time: it will not go up or down - even if the variable mortgage rate does. 


Gross

The total amount before anything is deducted. 


IRA - Individual Retirement Account

A tax-deferred retirement account for an individual that permits them to set aside up to $2,000 per year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). 


Liability

A financial obligation, claim, debt, or a potential loss to an individual or business. 


Line of Credit

An agreement negotiated between a borrower and a lender establishing the maximum amount of money a borrower may draw. The agreement also sets out other conditions, e.g., how and when money is to be repaid. 


Money Order

A financial instrument which is issued by a bank or other institution, allowing the individual named on the money order to receive a specified amount of cash on demand. 


Non-sufficient funds (NSF) 

A situation in which a check (or other type of withdrawal) may not be paid off an account because the account balance is less than the dollar amount being withdrawn. 


Point-of-Sale: (POS)

An electronic payment system used for retail goods and services that uses a debit card to directly access and deduct the funds from a customer’s checking account.


Refinancing 

The restructure of current debt with a new loan using the same property as security. 


Rescission 

The cancellation or annulment of a transaction or contract by the operation of mutual consent. Consumer mortgage loans require a 3-day rescission period after closing. 


SSL - Secure Socket Layer

An encryption method used for secure data transfer. 


Tax deferred 

Income or other earnings that are not now, but will eventually be, subject to taxation. For example, some retirement plan earnings may be taxed when the owner takes distributions. 


Tiered interest rates 

The interest rate you receive depends on the balance in your account. When the balance goes beyond a certain level, your entire balance automatically earns interest at the higher rate. Alternatively, if a withdrawal takes your balance below a certain level, your entire balance earns interest at the lower rate. 


Underwriting 

The analysis of risk and individual information used to determine the appropriate rate and term of a loan.


URL 

Uniform Resource Locator, the global address of documents and other resources on the World Wide Web, e.g. www.firstbankhampton.com 


Variable interest rate 

An interest rate, which can go up or down in line with general interest rates. The rate change is usually based on a quarterly basis. 

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