Personal Finance Ch. 8 Flashcards
Depreciation
Decrease in the value of an asset.
Unsecured Debt
Borrowing money or purchasing goods or service by just signing your name not backed by specific asset.
Secured Debt
Debt backed by collateral such as a car or home.
Collateral
property accepted as security for a debt such as a car home.
Installment Loan
A purchase that is paid for in equal monthly payments.
Car Lease
A contract allowing you the use of a vehicle in exchange for payment.
Lessee
Person paying for the use of a vehicle or housing.
Lessor
The property owner granting the use of a vehicle or housing.
Security Deposit
Amount required for a leased property as assurance that the property will be in good condition when you return it.
Apartment Lease
A contract outlining the conditions of an agreement to rent an apartment for a certain length of time usually a year.
Mortgage
A type of secured loan used for buying property.
Equity
The difference between what you owe on your house and it’s current market value.
Foreclosure
A process in which the lender takes possession of the house if you fail to make mortgage payments.
Private Mortgage Insurance (PMI)
Required by lenders to insure payment if borrows default on a mortgage one down payment is less than 20%.
Escrow Account
In account for holding money in trust for others.
