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ACH -
Automated Clearing House
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APR -
Annual Percentage Rate
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APY -
Annual Percentage Yield
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APYE -
Annual Percentage Yield Earned
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ARM -
Adjustable Rate Mortgage
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ATM -
Automated Teller Machine
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Abstract of Title -
A summary of the successive title deeds to a piece of property.
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Account -
Term is usually associated with checking accounts. See "Demand Deposits"; share (savings), or checking account held by HFCU and established primarily for personal, family, or household purposes. Accounts are products that have been opened or activated. There are three characteristics that further define an account: (1) An account has identification or an account title indicating to whom it belongs. By using the name, address, Social Security number or account number, it can be determined to whom the account belongs. (2) The second feature is that an account has a balance. (3) The third feature is that debits and credits can be posted to the account. This term is applied to both deposit and loan products, but is generally used more often when discussing deposit products.
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Account Relationship -
This is a term that is used when discussing a member's portfolio. It represents all the products and services that a member maintains with the credit union at a given point in time. This relationship could include deposit products, loan products, and other products. An account relationship could represent an 1) individual member or a 2) member's household (which could include more than one individual).
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Accrued Interest -
Interest earned but not yet credited or posted to an account.
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Adjustable Rate Mortgage (ARM) -
Mortgage agreement between the credit union and a real estate buyer stipulating predetermined adjustments of the interest rate at specified intervals. Mortgage payments are tied to some index outside the credit union, such as the interest rates in U.S. Treasury bills or the average national mortgage rate. Adjustments are made regularly, usually at intervals of one, three, or five years. In return for taking some of the risk of a rise in interest rates, borrowers get lower rates at the beginning of the ARM than they would if they took out a fixed rate mortgage covering the same term. A homeowner who is worried about sharply rising interest rates should probably choose a fixed rate mortgage, whereas one who thinks rates will rise modestly, stay stable, or fall should choose an adjustable rate mortgage. Critics of ARMs charge that these mortgages entice young homeowners to undertake commitments beyond their means.
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Amortization -
Systematic and continuous payment of an obligation through installments until the debt has been paid in full.
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Amortization Schedule -
Table that shows the periodic payment, interest and principal requirements, and unpaid loan balance for each period of the life of a loan.
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Annual Percentage Rate (APR) -
Cost of credit on a yearly basis which is expressed as a percentage, resulting from an equation that considers three factors: the amount financed, the finance charge and the term of the loan. According to the federal Truth in Lending Act, every consumer loan agreement must disclose the APR prominently.
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Annual Percentage Yield (APY) -
Total amount of dividends paid based on the dividend rate and compounding frequency for 365 days.
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Annual Percentage Yield Earned (APYE) -
Total amount of dividends paid based on the dividend rate and compounding frequency for 365 days.
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Applicant -
Member who applies for a loan.
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Appraisal -
Report made by a qualified person setting forth an opinion or estimate of property value. The term also refers to the process by which this estimate is obtained.
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Appraisal fee -
Charge for estimating the value of collateral being offered as security.
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Appreciation -
Increase in value.
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Asset-Liability Management -
Matching the maturities of member deposits and credit union investments with the length of member loan commitments to keep from being adversely affected by rapid change in interest rates.
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Assumption -
Taking on primary liability for payment of an existing mortgage while the seller remains secondarily liable unless specifically released by the lender.
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Automated Clearing House -
A funds transfer system governed by the rules of NACHA - The Electronic Payments Association, which provides for the interbank clearing of electronic entries for participating Depository Institutions. One of the most common transactions moving through the system is direct deposit entries, whereby an individual's payroll or retirement funds are automatically deposited to an individual's financial institution account.
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Automated Teller Machine (ATM) -
Unmanned equipment used by a member to obtain financial services, activated by a plastic card, push buttons, and a personal identification number (PIN) for each user.
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Automatic Loan Payment (Automatic debit) -
Loan payments made for the member directly debiting the member's account either manually (by suspense card) or automatically through the computer. Can also be done by ACH.
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Average Collected Balance -
Sum of daily balances in an account, less the total of uncollected items, divided by the number of days in the period, usually a month.
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Average Daily Balance -
Dividends are calculated by average daily balance method which applies a periodic rate to the average daily balance in the account for the period. Calculated by adding the balance in the account for each day of the period and dividing that figure by the number of days in the period.
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