Business / Loan Glossary

Settlement: The time when loan and mortgage documents are formally signed and the loan transaction is completed. Sometimes called 'Closing.'

Settlement Agent: The person who organizes and is in charge of the loan closing. The settlement agent is the person who can explain any document the borrower must sign.

Settlement Statement: A mortgage loan closing form required by HUD that is often called a HUD-1. It provides details of all charges and payments made in connection with your loan, and shows to whom they are distributed.

Short Term Debt: Financing used to secure cash for accounts payable and inventory.

Small Business Administration: Established by Congress, the SBA provides financial, technical and management assistance to help Americans start, run, and grow their businesses.

Sub Prime Loans: These loans are priced higher than prime loans, often much higher. Loans to borrowers whose credit is less than perfect will almost always be subprime loans. There are also other circumstanc . . . View Full Definition

Subordinated Debt (Junior Debt): Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debt-holders receive payment only after senior debt is paid in full. A subordination of security interest . . . View Full Definition

Subsequent Draw Fee: It's a fee that the financial institution may charge each time you use the line of credit after the initial use.

Survey: A drawing or map showing the precise legal boundaries of a property and other physical features, prepared by a registered land surveyor

Term: The period of time during which loan payments are made. At the end of the loan term, the loan must be paid in full.

Term Loan: A loan for a specific amount of money. It has either have a fixed or variable interest rate, matures in between one and ten years and has a set repayment schedule.

Total Liabilities: Total value of financial claims on a firm's assets. Equals total assets minus net worth.

Transfer Tax Or Charge: This is a government tax or charge that is usually based on a percentage of the property value or loan amount and imposed by state or local law. Many states do not require this charge for a . . . View Full Definition

Transunion Corporation: One of three leading providers of personal credit information.

Truth In Lending Act (TILA): This is a federal law designed to protect borrowers and to give them enough information to comparison shop for loans. TILA requires certain disclosures about the loan and when they must be g . . . View Full Definition

Truth In Lending Disclosure Statement: This is a very important document that federal law requires for all consumer loans.] It provides key information to enable borrowers to shop around and compare loan terms from various lenders.

Underwriting Fee: This is a fee charged by the lender to evaluate whether the borrower qualifies for a mortgage loan. An underwriting fee may be charged to the borrower and shown on the Settlement Statement (HUD-1).

Unsecured Loan: A loan granted upon the good credit of the borrower. No collateral involved.

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