Personal Finance - Lives Big Purchases Part 1

529 Plan

tax-advantaged investment account for education savings

Amortization Period

The amortization period is the total time (usually 15-30 years for mortgages) over which a loan's principal and interest are fully repaid

Appraisal

an expert's independent assessment of the value of an asset

ARM (Adjustable Rate Mortgage)

Associates Degree

a two-year undergraduate college degree

Bachelor's Degree

an undergraduate university credential earned after 3-4 years of study

Buyer's Market

when there are lots of houses for sale

Career Earnings

total money earned over a lifetime

Closing Costs

Closing costs are the fees and expenses paid to finalize a mortgage and transfer property ownership

College Savings Plans

tax-advantaged investment accounts designed specifically to save for future education expenses

CSS Form

a specific online application used to apply for non-federal financial aid

Deferred payment

an agreement to delay payment for goods or services until a future date

Doctorate Degree

the highest academic qualification

Down Payment

upfront cash portion of a large purchase (like a house or car) that you pay to the seller

DTI Ratio (Debt to Income)

your total monthly debt payments divided by your gross monthly income

Education Premium

higher earnings from a college degree

EFC (Expected Family Contribution)

a number from the FAFSA showing your estimated ability to pay for college

Equity

the ownership value in an asset or company

Escrows

money collected in advance when mortgaging a home

FAFSA

free form from the U.S. Department of Education that students fill out to apply for federal financial aid

Financial Aid

grants

Financial Aid Package

a personalized offer from a college