Money has a language all its own. By learning about the words that are associated with money and financial matters, you can take a step towards increasing your financial literacy. Here are a few money words to get you started.
An adjustable rate mortgage, also known as an ARM, is something that you want to make absolutely sure you want before you get it. With an ARM, the interest rate on your mortgage starts out low. This can help people qualify for ARMs more easily than for fixed rate mortgages. However, the catch is that at the end of a specified time frame, usually five or seven years, the interest rate becomes variable. This means that your interest rate can rise. It can also fall, but it is most important to be aware that it can rise because you may have trouble affording a higher monthly payment.
Bankruptcy is something that can happen if you become unable to pay your debts. When you go through a bankruptcy, you discharge your debts and give up some if not all of your assets. There are a couple of forms of bankruptcy that individuals can choose. Attorneys trained in helping individuals go through bankruptcy can advise on which type is the best for an individual’s situation. Some forms of bankruptcy allow you to keep some of your assets like your home or car. It is important to note that certain types of debt such as student loans may not be discharged through bankruptcy, and that bankruptcy does appear on your credit report and can affect your ability to obtain credit.
Check hold is something that I recently discovered and I do not really like it. Check hold is when you deposit a check into your bank account and the bank delays in crediting the deposit to your account for a specific period of time. Federal law requires that certain types of deposits be made available on the next business day following a deposit, but for other deposits a hold of one to five business days may be applied depending upon the type of check and the type of deposit slip that you use as well as whether you take cash back when you make the deposit.