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Houston Mortgage > Glossary >
Credit Card > D 1-10
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Debit card
A payment card that is linked directly to a customer's bank account. Some cards require a personal identification number. Others require a customer's signature. A PIN-based or direct debit card removes a purchase price from a customer's checking account almost immediately. A signature-based or deferred debit card has a Visa or MasterCard logo and removes the purchase price from a customer''s bank account in two or three days.
Debt
Money one person or firm owes to another person or firm.
Debt consolidation
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan.
Debt-to-income ratio
The percentage of before-tax earnings that are spent to pay off loans for obligations such as auto loans, student loans and credit card balances. Lenders look at two ratios. The front-end ratio is the percentage of monthly before-tax earnings that are spent on house payments (including principal, interest, taxes and insurance). In the back-end ratio, the borrower''s other debts are factored in.
Debtor
Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes.
Default
1. The condition that occurs when a consumer fails to fulfill the obligations set out in a loan or lease. 2. A designation on a credit report that indicates a person has not paid a debt that was owed. Accounts usually are listed as being in default after several reports of delinquency. Defaults are a serious negative item on a credit report.
Digital wallet
Encryption software that conducts secure transactions online in a fashion that resembles using a physical wallet.
Discount rate
The interest rate at which financial institutions that are members of the Federal Reserve System (Fed) may borrow on a short-term basis directly to cover temporary deficiencies in the bank’s reserves. Banks borrow from the Fed as a last resort because frequent borrowing would raise concern by bank regulators.
Down payment
An initial, partial payment on a purchase. This payment is typically a small portion of the total purchase price, and reduces the amount of the purchase that must be financed. When buying a home or automobile, for example, your down payment might be 5 percent, 10 percent, or 20 percent of the total purchase price.
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Houston Home Mortgage