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Glossary of
FinanciaI & Real Estate Terms

Index of Terms | Complete List of Terms

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Sale-Buyback : A financing arrangement in which an investor buys property from a developer and immediately sells it back under a long-term sales agreement, wherein the investor retains legal title.

Sale-Leaseback : A financing arrangement whereby an investor purchases real estate owned and used by a business corporation, then leases the property back to the business.

Satisfaction of Debt : The payment of debt.

Secondary Mortgage Market : A market where mortgage originators may sell them, freeing up funds for continued lending and distributes mortgage funds nationally from money-rich to money poor areas.

Second Mortgage : A mortgage that has a lien position subordinate to the first mortgage.

Secured Creditor : An individual or a business holding a claim against the debtor that is secured by collateral or a lien.

Secured Debt : These types of debts are usually backed up by collateral in case the borrower fails to pay a loan within the given time. These loans are taken at times the borrower is undergoing a financial crunch. Auto loans, mortgages, are some important examples of secured debts.

Secured Loan : A loan that is backed by collateral.

Security : Property pledged to the creditor in case of a default on a loan.

Security Deposit : This is an additional assurance for a lender, in case the borrower defaults while repaying the loan.

Security Interest : The creditor's right to take property or a portion of property offered as security.

Seller Carry-Back : An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.

Seller's Points : A lump sum paid by the seller to the buyer's creditor to reduce the cost of the loan to the buyer. This payment is either required by the creditor or volunteered by the seller, usually in a loan to buy real estate. Generally, one point equals one percent of the loan amount.

Senior Debt : Debt that takes priority over other debt securities sold by the issuer.

Senior Loan : Real estate loan in first priority position.

Service Charge : A component of some finance charges, such as the fee for triggering an overdraft checking account into use.

Servicer : An organization that collects principal and interest payments from borrowers and manages borrowers' escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.

Servicing : A complete evaluation and updated transaction kept by a lender during the post loan period. This includes collection and payment of taxes, insurance, property estimations and similar type of dealings.

Settlement Costs : Fees that are paid by the borrower when a property is purchased or refinanced. Also, fees paid to a debt settlement agency, upon the negotiated settlement of a debt

Short-Term Debt : Debt obligations requiring payment within the year.

Sign Up Fee : When a customer gets registered with a particular company to avail the required services, the company might end up charging a certain amount of money from the customer. This is known as sign up fee.

Simple Interest : The interest rate that is charged on the basic amount that is borrowed. This interest rate is not compounded and thus is considered to be the most lucrative.

Sinking Fund : Monies deposited in advance in anticipation of satisfying a debt in the future.

Statement : The monthly bill from a credit card issuer that describes and summarizes the activity on an account. A statement includes the outstanding balance, purchases, payments, credits, finance charges and other transactions for the month.

Statement Date : The date on which a statement is generated, and the month's finance charges (interest) are added to the balance.

Statutory Debt Llimit : The cap that Congress imposes on the amount of public debt that may be outstanding whether temporary or permane. When this limit is reached, the Treasury may not sell new debt issues until Congress raises the limit.

Stop Date : Date on a term loan when the balloon payment is due.

Straight Debt : Loan at a specific interest rate to be repaid over a set number of months.

Structured Debt : Debt that has been customized for the buyer, often by incorporating special options.

Student Credit Cards : These are credit cards especially designed for the use of a student. These cards have a considerably low purchase limit on them and a lower interest rate for the benefit of the students. The students with a respectable credit history find these cards convenient for their limited use.

Subordinate Financing : Any mortgage or other lien that has a priority lower than that of the first mortgage, or senior loan. See second mortgage.

Subordinated Debt : A finance term to describe debt that is unsecured or has a lesser priority than that of an additional debt claim on the same asset. This means that if the party that issued the debt defaults on it, people holding subordinated debt get paid after the holders of the "senior debt". A subordinated debt therefore carries more risk than a normal debt.

Surcharge : An extra charge imposed on those who purchase with a credit card instead of cash. (Currently, surcharges for credit card purchases are prohibited.)

Surplus Income : This is the amount you are left with if you subtract all your living expenses (housing costs, food, travel, clothing insurances etc.) from your incomes (wages, pensions, benefits etc). This is the amount of "surplus income" available for the creditors.

Survey : A drawing or map the shows the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Sweat Equity : Increase in property value due to improvement by the owners.


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Index of Terms | Complete List of Terms


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