Glossary of Terms
Credit Glossary
It's hard enough trying to stay on top of your credit let alone learn the industry lingo. We've compiled a glossary of industry terms to help you stay ahead of the curve when dealing with your credit, auto loans, home loans, debt, and savings.
- Rate lock
- A commitment issued by a lender to a borrower, or another mortgage originator, guaranteeing a specified interest rate and lender costs for a specified period of time.
- Real estate agent
- An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.
- Real Estate Settlement Procedures Act (RESPA)
- A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices and relationships.
- Recast
- In negative-amortizing mortgages, the process of adjusting the monthly payments so the balance will be fully repaid over a specified period. A typical pay-option ARM is recast on its fifth anniversary. At that point, the monthly payments rise so that the mortgage will be paid off in 25 years (30 years after the loan was initiated). Pay-option ARMs are also recast automatically if the loan balance exceeds a limit (or "recast trigger"), often 110% of the original loan amount.
- Receipt
- A hard copy document that records when a transaction took place at the point of sale. The receipt contains a description of the transaction, which usually includes the date, the merchant name/location, the primary account number, the amount and the reference number.
- Recent balance
- The most recent balance owed on an account as reported by the creditor.
- Recent payment
- The most recent amount paid on an account as reported by the creditor.
- Recording fees
- Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.
- Recurring Billing
- Transactions for which a cardholder grants permission to the merchant to periodically charge his account number for recurring goods or services.
- Refinancing
- Paying off one loan by obtaining another. Refinancing is generally done to secure better loan terms (like a lower interest rate).
- Rehabilitation mortgage
- A mortgage that covers the costs of rehabilitating (repairing or improving) a property. Some rehabilitation mortgages - like the FHA's 203(k) - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.
- Released
- Occurs when a lien has been satisfied in full.
- Reported since
- The date a creditor began reporting information on a specific account to the credit bureau.
- Request for Your Credit History
- A credit inquiry. A credit grantor, direct marketer or potential employer or others with a permissible purpose may request information from a consumer's credit report.
- Rescission
- The cancellation of a contract. With respect to mortgage refinancing, the law that in some cases gives the homeowner three days to cancel a contract once it is signed if the transaction uses equity in the home as security.
- Reset
- Another term for the interest rate adjustment (almost always an increase) made on an adjustable-rate mortgage at the end of a specified term.
- Reverse annuity mortgage
- A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as collateral for and repayment of the loan. Also known as a home equity conversion mortgage (HECM).
- Revolving account
- Credit automatically available up to a predetermined maximum limit so long as the consumer makes regular payments.
- Revolving liability
- A credit arrangement, such as a credit card, that allows a customer to borrow against a pre-approved line of credit when purchasing goods and services.
- Risk scoring models
- A numerical determination of a consumer's creditworthiness. Tool used by credit grantors to predict future payment behavior of a consumer.
