Introduction to Personal Finance - Loans and Housing Decisions

A collection of vocabulary flashcards covering key concepts from personal finance related to loans and housing decisions.

Depreciation

The decrease in the value of an asset over time, often due to wear and tear.

Use Assets

Assets that are intended to support the current standard of living, which typically depreciate in value.

Loan Term

The duration over which a loan must be repaid.

Mortgage

A loan secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments.

Equity

The value of an ownership interest in property, calculated as the difference between the property's market value and the amount owed on the mortgage.

Rental Lease

A legal agreement outlining the terms by which one party agrees to rent property owned by another party.

Tenant Rights

The legal rights that tenants have concerning their rental agreements, including the right to a habitable living environment.

Real Estate Agent

A professional who assists buyers and sellers in the process of purchasing or selling real estate.

Homeowners' Association (HOA) Fee

A fee paid by homeowners to cover the costs of common areas and planned amenities within a residential community.

Closing Costs

Fees and expenses paid by the buyer and seller during the closing of a real estate transaction.

Housing Payments-to-Income Ratio

A measurement used to determine if a borrower can afford a mortgage, typically should be less than 31% of monthly income.

Security Deposit

An upfront payment made by a tenant to cover potential damages to the rental property.