A

Adjustable-rate mortgage: a mortgage with an interest rate that may change depending on a standard rate index. Adjustable rates may result in either higher or lower payments throughout the entire length of the loan, unlike a fixed-rate loan, whose payments always remain the same. The interest rate typically adjusts on a yearly basis and there is usually a limit on how high or low it may become.

Amortization: the length of time it takes to repay the installments of a loan. For example, a mortgage with a 30-year amortization will take 30 years to repay.

Annual fee: a charge issued yearly by some credit card companies for the right to use or hold a credit card. Notre Dame Federal Credit Union's credit cards do not have any annual fees.

Annual Percentage Rate (APR): a percentage which states the total cost, including fees, interest, and other charges, a person may expect to pay annually, in addition to the original amount borrowed. Financial institutions are required by the Truth in Lending Act to disclose the APR of all loans so consumers may easily shop different lenders for the most affordable loans.

Appraisal: an assessment of a property's worth by a qualified real estate appraiser. Appraisals tend to be most commonly used when selling or refinancing property or using property as collateral for a loan. Real estate appraisers will usually compare the appraised property with other sales of similar nearby properties to determine its current market value.

Annual Percentage Yield (APY): a percentage which states the amount of dividends a deposit may earn based on a yearly dividend compounding method. Financial institutions may calculate their APY differently depending on the amount of money deposited and the length of time the funds stay deposited in the account.

ATM surcharge: a fee which is charged when a person uses an ATM not owned by his/her financial institution. Notre Dame Federal Credit Union is part of a nationwide network of surcharge-free ATMS, which allow NDFCU members to use certain ATMs not solely owned by NDFCU without incurring a fee from the owner of the ATM. (For more details on avoiding ATM surcharges, see Surcharge-Free ATMs).  

ATM tampering: a method thieves may use to steal personal account information or cash from automated teller machines (ATMs). They may use high-tech devices to capture ATM card numbers or Personal Identification Numbers (PINs) or to physically trap ATM cards inside the machine or prevent cash from being dispensed.

AutoPay: a service NDFCU offers in which payments are automatically taken out of an account and electronically transferred to NDFCU to pay off a NDFCU loan payment. NDFCU may offer discounts on certain loans for members who pay their loans with AutoPay.

B

Balance transfer: shifting the amount owed on a loan to a new lender. Balance transfers are primarily associated with credit cards, in which the remaining balance on a credit card is moved onto a new card. Consumers may transfer their high-rate credit card balances onto lower-rate credit credits to save money on interest.

Balloon mortgage: a mortgage loan which begins with fixed monthly payments but requires a large final amount at the end of the agreed upon terms.

Balloon payment: a lump sum that may be due at the end of a loan's term.

Bill payment: an online service NDFCU offers in which members may provide the name and account numbers for bills and NDFCU uses funds from their accounts to pay the bills. Bill payment may be set up to be performed automatically each month or members may set it up manually for each billing cycle. (For more information on bill payment, see Online Bill Payment and Presentment).

Bill presentment: a service for receiving and viewing bills online instead of receiving paper bills in the mail. The bills can then be paid electronically online. (For more information on bill presentment, see Online Bill Payment and Presentment).

Blackout date: a period which prevents cardholders the access to redeem rewards on credit cards. NDFCU's Visa^® Platinum credit card has no blackout dates for its Cash Back reward. (For more information, see Visa^® Platinum).

Blocked countries: countries in which Visa^® credit cards and NDFCU Visa^® Check Cards cannot be used. These include all countries on the Office of Foreign Assets Control (OFAC) list, as well as six other countries: Brazil, Turkey, Russia, Mali, Ukraine, and Nigeria. If members give NDFCU a minimum of two days notice, they will be allowed a limited number of transactions in those six countries. (For more information, see Traveling Out of the Area).

C

Cardholder agreement: a statement which details all of the terms and conditions of a credit card for an account holder. The Federal Reserve requires that all cardholder agreements include disclosures of any annual fees, how the monthly minimum payments are calculated, the Annual Percentage Rate (APR), and account holders' legal rights for disputes. Although changes to the agreement may be made, the credit card company must give the cardholder written notice with the option to opt-out.

CARD Act: technically known as the Credit Card Accountability Responsibility and Disclosure Act. This act, which took effect in August 2009, requires credit card issuers to give cardholders notifications of at least 45 days before raising fees or the Annual Percentage Rate (APR). The CARD Act also requires due dates to be on the same day each month and prevents young adults from opening accounts without proof of ability to pay.

Cashier's check: a check written from a financial institution and drawn from its own funds. Members may deposit funds and then get a cashier's check for up to the amount of the funds available. Since the funds are deposited in exchange for the cashier's check, the funds are already secured. (See our Fee Schedule to learn more about the cost of this service).

Certificate of Deposit (CD): a savings certificate which requires funds to remain deposited in a bank for an agreed upon period of time. In exchange for limiting withdrawals, the bank may guarantee higher interest rates for the deposits than for regular savings accounts. The length of required time may range from a few months to years and account holders may incur a penalty fee for withdrawing early. Credit unions do not offer CDs, but rather Share Certificates.

Closing costs: costs in addition to the price of the property which occur during the buying and selling of property, such as loan origination fees, taxes, and appraisal fees.

Construction loan: a loan used to fund the building of a home. Construction loans generally have much shorter terms than mortgages and the funds may be disbursed to the borrower in stages of the construction process, rather than all at one time.

Construction-permanent loan: a short-term loan used to fund the building of a home. The loan is then converted into a long-term mortgage loan for the completed home. Borrowers may prefer a construction-permanent loan because it may be less time and effort than applying for two separate loans.

Consumer Credit Counseling Service: a service used to advise people on personal finances in order to manage and reduce debt. The counseling topics may include budgeting income against expenses, a specific plan on repaying debts, and communicating with creditors. The service may be used to help prevent loan defaults, foreclosures, or bankruptcies. NDFCU provides this service free to our members.

Credit report: a compilation of a person's history of credit accounts, including types of accounts, current balances, payment history, collections, or bankruptcies. It also includes personal information, such as name, address, and Social Security Number.

Credit union: a not-for-profit financial institution that is owned by its members who belong to select groups in order to qualify for membership. Since credit unions are not out to make a profit, they generally have lower fees and interest rates. Credit union funds are federally insured for up to $250,000 by the National Credit Union Administration (NCUA).

D

Debt consolidation: transferring the balances of multiple loans onto one single loan. Consolidating may be used to help reduce monthly payments by extending the repayment terms.

Direct Deposit: funds from a third party which are electronically deposited into a checking or savings account instead of in the form of a paper check. NDFCU offers discounts on certain products and services for members with Direct Deposit. (For more information, see Direct Deposit).

Disclosure: information for account holders, including fees, Annual Percentage Rate (APR), and any other terms of a loan or account, which are based on regulatory requirements. Disclosures are required by law under acts such as the Truth in Lending Act, Truth in Savings Act, Fair Credit Reporting Act, USA Patriot Act, and Equal Opportunity Act.

Discount points: mortgage interest which borrowers may pay prior to a mortgage loan in exchange for the lender lowering the interest rate. Each point is the equivalent of one percent of the mortgage amount. For example, on a $100,000 mortgage, a borrower could purchase one discount point at $1000.

Dividend: money earned from deposited funds. It is similar to interest paid from a bank, but is paid only to shareholders of an organization.

Draw: a series of construction loan payments made in installments to a contractor or builder as the work is completed, rather than in one lump sum at the start or completion of the project.

E

Electronic funds transfer: the moving of money from one account to another through electronic transfer systems. These include electronic account-to-account quick transfers, electronic bill pay, and automated teller machines (ATMs).

Equal Credit Opportunity Act: a federal law which makes it illegal for lenders to deny credit on the basis of religion, race, age, sex, color, national origin, marital status, usage of government public assistance, or because a right was exercised under the Consumer Credit Protection Act.

Equal housing lender: any mortgage lender who complies with Federal Fair Lending Laws and does not base loan denial or loan amounts or interest rates on discriminatory factors, such as religion, race, age, sex, color, national origin, marital status, usage of government public assistance, or because a right was exercised under the Consumer Credit Protection Act.

Equity: the value of an item after all charges, such as taxes or loan balances, are subtracted. In regards to mortgage, it is how much a property is worth after subtracting the amount still owed on the mortgage loan.

Escrow: a financial arrangement in which a third party is selected to hold funds for a deal between two other parties. For example, borrowers may tack additional funds for property taxes onto their monthly mortgage payments, so the lenders may pay their property tax liabilities on the borrowers' behalf.

eStatement: an electronic form of a monthly paper financial statement, which lists all completed ingoing and outgoing transactions and the amount of funds available. eStatements are saved on the NDFCU online server and are viewable for free with Online Banking. (For more information, see eStatements).

Estimated financial contribution (EFC): the determined amount of money a student or student's parents may be expected to pay toward the student's college tuition and other educational expenses. The amount is chosen according to the income of the student or his/her parents, as well as other financial information provided by the applicant on the Free Application for Federal Student Aid (FAFSA).

Excess Share Insurance: guaranteed protection of an extra $250,000 worth of deposited credit union funds in addition to the $250,000 already federally guaranteed by the National Credit Union Administration (NCUA), for a total of $500,000 of insured deposited funds. This insurance is provided by the Excess Share Insurance Corporation, a private insurance company that only provides insurance to select credit unions, like Notre Dame Federal Credit Union, that meet their high standards of safety and soundness.

F

Fair Isaac Corporation: a business consultation firm founded in 1956, which is most well-known for its creation of the FICO credit score, a model used to determine a borrower's risk factors for repaying lenders.

FICO score: the most frequently utilized type of credit score. Developed by the Fair Isaac Corporation, it uses the information in a person's credit report, such as payment history, amount of debt versus available credit, types of accounts, and lengths of accounts, to calculate the odds of the person repaying lenders as agreed. FICO scores can range from 300 to 850. The higher a person's score is, the more likely it is that he/she will be approved for loans or offered lower interest rates.

Finance charge: the cost of obtaining or using credit. Credit card finance charges generally apply when a borrower does not pay off his/her entire monthly balance.

First mortgage: the primary loan on a home. If a property has more than one loan, the lender of the first mortgage is the one who receives the property if the borrower defaults on the loan.

Fixed rate mortgage: a mortgage which has an interest rate that stays the same throughout the entire length of the loan.

Free Application for Federal Student Aid (FAFSA): a form for both prospective and current college students to fill out in order to determine the amount of federal and state financial assistance they qualify for to pay for college tuition and other educational expenses.

G

Grace period: the length of time between the date of a credit card transaction and the date it is billed, in which no interest is charged. The length of a grace period may depend on the issuer, but under the CARD Act, it can be no less than 25 days. If the balance is not paid in full by the end of the grace period, interest may be charged.

H

Home equity: the value of a property minus the amount of the mortgage balance owed on it.

Home equity line-of-credit: a revolving debt with a credit limit that is secured by the amount of equity. A home equity line-of-credit is open-ended, meaning it does not necessarily have a maturity date.

Home equity loan: an installment loan with a fixed interest rate whose total is based on the amount of equity. Unlike a home equity loan-of-credit, it has a fixed term with a maturity date. Once the maturity date is reached, the borrower must pay off the total balance.

HUD: also known as the United States Department of Housing and Urban Development. It is a federal government organization which regulates housing policies. Its mission is to ensure everyone, regardless of age, sex, marital status, religion, or race, has equal opportunities for affordable housing and home ownership.

I

Index: a published set of interest rates that are statistically calculated according to economic conditions. This index is used to adjust the rates of adjustable-rate loans.

Interest: a fee charged by a lender in exchange for loaning a borrower money. It is generally an annual percentage of the total amount borrowed. (See Annual Percentage Rate for more information).

Individual Retirement Account (IRA): type of savings account used strictly for retirement savings. There are two main types of IRAs: Traditional and Roth. 

L

Land/lot loan: a loan used for the purchase of property which does not include houses or other structures.

Line-of-credit: an agreement between a financial institution and a borrower that determines the highest amount that the financial institution will loan the borrower at any given time. The borrower may use any amount from the line-of-credit at any time, as long as it doesn't exceed the maximum amount agreed upon, and then pay back the balance with minimum monthly balances determined by the lender.

Loan-to-value ratio (LTV): the amount of the total mortgage loan amount compared to the value of the home or its selling price, whichever is smaller. A home that has an appraised value of $150,000 with a mortgage balance of $120,000 has an 80 percent LTV.

M

Money market account: a type of savings account that generally has a higher dividend rate, but also may require larger minimum deposit amounts and allow fewer withdrawals than other savings accounts.

Modification: a change in the structure or amount of a loan.

Mortgage: a lien placed on a home or other type of property that can offset the loan balance owed by allowing the lender to sell the home or property if the borrower does not pay the loan as agreed. If the home or property sells for less than the remaining debt owed, the borrower is still responsible for the outstanding balance.

Mortgage refinance: the process of using a new mortgage loan to pay off an existing mortgage loan. This may be useful for borrowers who want to lower their payments by extending the length of their mortgage loans or for those who want lower interest rates.

N

National Credit Union Administration (NCUA): an agency of the federal government that regulates federal credit unions and insures funds, similar to the Federal Deposit Insurance Corporation for bank deposits.

National Credit Union Share Insurance Fund: account ran by the National Credit Union Administration (NCUA) that insures credit union deposited funds for up to $250,000 per member.

National education loan network (Nelnet): a loan company that primarily handles the distribution and collection of student loans from a variety of lenders, including both private and federal student loans.

Non-sufficient funds (NSF) fee: a fee charged to a member whose account does not have enough funds to pay a check, Automated Clearing House (ACH) electronic transfer, or debit card transaction off his/her account. NDFCU charges $32 per non-sufficient funds transaction.

O

Online Banking: a service that allows members to view their account information and conduct financial transactions, such as account transfers and bill payment, on a secured website. (For more information, see Online Banking).

Origination fee: fee from a lender to cover the costs of processing a loan, such as running credit history or conducting property appraisals.

Overdraft protection: an arrangement between a financial institution and member in which the member authorizes the financial institution to pay a check, Automated Clearing House (ACH) electronic transfer, or debit card transaction off his/her account, even if sufficient funds are not currently available in the member's account, in exchange for a fee. NDFCU charges $32 per non-sufficient funds transaction.

P

Per item fee: fee charged when an account holder has more transactions on an account than the agreed upon free amount. These fees generally apply to accounts that offer higher dividends in exchange for more stringent regulations on the number of transactions or minimum balance amounts.

Personal Identification Number (PIN): a confidential numerical code used by members to gain access to their financial accounts at an Automated Teller Machine (ATM).

Pharming: an identity theft technique in which thieves use computer software to steal personal information in order to access a person's account funds or open up new accounts in the person's name. The software can be installed on a person's computer if he/she clicks on links in pop-up advertisements or opens e-mail attachments. Clicking the link may redirect the person to an imposter website that appears to be the person's financial institution or other trusted website in the hopes that the person will enter in his/her log-in information so the software can record it. Thieves can then use the recorded information to gain access to the victim's actual accounts. Always contact NDFCU if you believe you are a victim of this type of crime. (See Account Security for more information).

Phishing: an identity theft technique in which thieves use fake e-mail posing as correspondence from legitimate companies in an attempt to get people to reveal their personal or account information. The e-mail may ask them to update or verify their information by clicking a link, which takes them to a fraudulent website prompting them to enter their personal information. The information can then be used by thieves to gain access to victims' accounts or open up new accounts with the information. Always contact NDFCU if you believe you are a victim of this type of crime. (See Account Security for more information).

Points: an amount charged to a mortgage in which each point is the equivalent of 1 percent of the mortgage loan. Discount points may be paid by the borrower to lower his/her interest rate, while mortgage lenders may charge points to cover the costs required to set up the loan.

Prime lending rate: interest rate that financial institutions may charge to borrowers with the best credit scores. It is based on the federal funds rate, or the rate other financial institutions charge one another to borrow funds overnight.

Principal: the amount of money a lender loans a borrower, minus the interest.

R

Regulation D: a limitation which states that during any month, you may not make more than six (6) withdrawals or transfers to another credit union account of yours or to a third party by means of a preauthorized or automatic transfer or telephone order or instruction.

Revolving debt: also known as line-of-credit. A type of credit in which a lender grants a borrower a maximum credit limit and the borrower is permitted to charge any amount up to the limit, while making minimum monthly payments that are typically a percentage of the balance, rather than fixed installment payments. Interest is charged on any portion of the balance that is not paid in full and the borrower may continue to use any remaining credit as long as he/she does not exceed the credit limit and makes the minimum payments.

Roth IRA: a type of Individual Retirement Account (IRA) with contributed funds that are not tax deductible, unlike a Traditional IRA. Once Roth IRA funds are withdrawn between ages 59 1/2 and 70 1/2, no tax is owed upon withdrawal. Penalties may be charged if the funds are withdrawn early.

S

Safe deposit box: a locked box that is rented from a secure institution, such as a bank or credit union, which can be used to keep valuable possessions or personal documents. Contents of safe deposit boxes are not insured by the National Credit Union Administration (NCUA).

Secured credit card: a credit card with a limit that is backed by an upfront lump sum deposit by the cardholder. Card issuers reduce their risk because they have the deposited amount to keep in the event the cardholder does not pay as agreed. People with limited or bad credit history may choose secured credit cards as a way to establish or improve credit scores.

Secured loan: any type of loan that has collateral, such as a house or car, which can be repossessed by the lender if the borrower defaults and does not pay the loan as agreed.

Select Employee Groups (SEG): groups that are eligible for membership to a credit union.

Share Certificate: a savings certificate from a credit union that requires the funds to remain deposited for an agreed upon period of time. Banks refer to these as certificates of deposit (CDs). In exchange for limiting withdrawals, the financial institution generally guarantees higher dividends for the deposits than for regular savings accounts. The length of required time may range from months to years and account holders may incur a penalty fee for withdrawing early. Share certificates are federally insured by the National Credit Union Administration (NCUA) for up to $250,000 and by Excess Share Insurance for an additional $250,000.

SmiShing: an identity theft technique in which thieves send smart phone users SMS messages to encourage them to go to a website that will cause them to inadvertently download computer software. The software may record personal, account, or log-in information so the thieves can gain access to accounts or open new accounts in victims' names. Always contact NDFCU if you believe you are a victim of this type of activity. (See Account Security for more information).

Student loans: financial aid used by students to pay for college expenses. Student loans may have lower interest rates than other loan types, particularly if the student loans are backed by the federal government. They must be repaid and typically cannot be discharged, even if the borrower files for bankruptcy.

Subsidized Stafford Loan: student loan that is backed by the federal government and awarded to students based on their financial needs. The interest on these loans is paid by the government while the student is in school and only starts to accrue after graduation.

T

Term: the length of time for a deposit or loan to mature. For example, many auto loans have terms of 60 months.

Touch-Tone Teller: a free service that allows members to gain access to their account information and perform financial transactions over a touch-tone phone. (For more information, see Touch-Tone Teller).

Traditional auto loan: a loan with a fixed interest rate which is used to purchase a new or used automobile.

Traditional IRA: a type of Individual Retirement Account (IRA) with contributed funds that may be tax-deductible until they are withdrawn, and then taxes are applied. Anyone under 70 1/2 with qualifying income can contribute to a Traditional IRA. Penalties may be charged if the funds are withdrawn before age 59 1/2.

Truth-in-Lending: a disclosure required by federal law in which lenders must provide the terms and conditions of a loan, such as annual percentage rate (APR), annual fees, or other applicable charges, in writing to borrowers.

TurboTax: software that prepares taxes by assessing a user's income, deductions, and other applicable information, to determine the amount of tax to be owed or refunded.

U

Underwriter: a person who determines the credit risk of a borrower.

Underwriting: the process lenders use to determine whether to issue a loan, using factors such as the borrower's credit risk, debt-to-income ratio, and any other criteria specific to the lender.

Unsecured loan: any type of loan that does not have collateral that can be repossessed by the lender in the event of the borrower defaulting.

Unsubsidized Stafford loan: student loans backed by the federal government that are awarded to students regardless of financial need. The interest on unsubsidized Stafford loans is not paid by the federal government while the student is in school and starts to accrue immediately upon disbursement.

V

Vishing: an identity theft technique in which thieves attempt to lure people to dial into a voicemail system that records personal information. Thieves may pose as financial institutions and call or send e-mails to people to lure them to call a number to verify their account information on a voicemail system. The recorded information can then be used by thieves to access the victims' accounts or open up new accounts. Always contact NDFCU if you believe you are a victim of this type of activity. (See Account Security for more information).

W

Wire transfer: a service used to electronically transfer funds between financial institutions throughout the world. (For more information, see Wire Transfers).