Glossary of Terms. Automated Clearing House (ACH) -Electronic method that allows debits and credits to run through member s account.

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1 1 ABIL (Avoid Being In Line) -Automated service which allows members to make transfers, payments, and check balances. Accessible 24/7. Automated Clearing House (ACH) -Electronic method that allows debits and credits to run through member s account. Annual Percentage Rate (APR)- The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan origination fee (points). Applicant/Borrower -An applicant is an individual applying for a loan. If the loan is approved and the applicant accepts the loan, the applicant then becomes the borrower. APY Annual percentage yield.- The APY is the actual rate of interest paid, or earned, during a year, with compounding. APY is in contrast to APR, or annual percentage rate, that is usually advertised. Annual percentage yield (APY) is a rate that reflects the total amount of interest paid on an account, based on the interest rate and the frequency of compounding for a 365-day period. It is a point of comparison and is based on the dividend rate. The APY is how much you would earn on an account if the minimum balance required to earn the dividend was maintained, and all dividends earned were left on deposit in the account for one year. The APY assumes the dividend rate will remain constant. The APY is used to forecast earnings on the account. For example, a credit union advertising a 3-month Share Certificate with an APR of 5.00% would have an APY that's higher, due to compounding. If the 3-month Certificate were rolled over four times in the year, the APY would equal 5.00% divided by 4 and then compounded over 4 periods, which would equate to an APY of 5.09% (1.0125^4-1=5.09%). So if you purchased a Certificate with an APY of 5.09%, on January 1st for $10,000 and rolled it over 4 times, your balance at the end of the year will be $10,509.45, not $10, APYE Annual percentage yield earned. -The Annual Percentage Yield Earned (APYE) is the actual percentage the account earned. It only appears on the member's statements. The APYE is affected by: days in the dividend period, account activity (withdrawals, deposits, crediting and compounding of dividends), and changes in the dividend rate. Truth-In-savings requires certain disclosures on periodic statements. One of the disclosures required on dividend-bearing accounts is the annual percentage yield earned, or APYE. The APYE is an annualized rate that reflects the relationship between the amount of dividends actually paid to the member s account during the period and the average daily balance in the account for that period. NOTE: This calculation uses the member's average daily balance for the period, even though the dividend calculation may be simple daily, compound daily, etc. The general formula is as follows (this requires the use of a scientific calculator for the exponent): 100 [(1 + (Dividends earned Balance)) 365 days in period - 1] = APYE Balance = the average daily balance in the account for the period Dividends earned = the actual amount of dividends earned for the period Days in period = the actual number of days over which the dividends disclosed on the statement were earned Adjustable-Rate Mortgage (ARM) / Variable Rate A mortgage loan in which the interest rate and payment are subject to change according to the terms of the loan agreement. Appraisal - A written analysis of the estimated value of a property prepared by a qualified appraiser.

2 2 Appraiser -A person qualified by education, training, and experience to estimate the value of real and personal property. Appreciation - An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation. Asset - Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). ATM Card- Plastic card that allows members to make withdrawals from their accounts through automated teller machines. Bill Payment -Allows members to pay their bills directly from their checking account. Member must sign up for Online Banking first. Bluebook - Listing of vehicle values. Buy-down -When an up-front fee is paid to lower the interest rate on a Real Estate loan. Certificate of Deposit - Term account. Member must leave funds in the certificate for the full term otherwise a penalty is assessed. Closed-end Credit (Installment Loan) - A one time loan, with a predetermined principal amount and a predetermined repayment term. Co-Applicant/Co-Borrower - An individual applying for a loan with another individual. The co-applicant s income and credit profile is merged with the primary applicant s information for loan consideration. If the loan is approved and accepted by the applicant and co-applicant, the co-applicant becomes the co-borrower. Collateral - An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract. Conforming Loan - A mortgage loan of $417,000 or less. Consumer reporting agency (or bureau) - An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources. Courtesy Pay - Service which allows member to overdraw their checking accounts subject to a preset dollar amount. Specific requirements must be met and maintained. Fees apply. Co-Signer (Co-Maker) - An individual who agrees to assume responsibility for a loan if the primary borrower defaults. Credit - An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date. Credit history -A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner. Credit report -A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.

3 3 Credit-Scoring System-A statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness. DBA (Doing Business As) - When the member owns a small business. In order for us to take checks for deposit with the companies name we need to have a current DBA on file. Debt Ratio A major factor used in making a lending decision. Monthly Obligations divided by Monthly Gross Income. Deed of trust -The document used in some states instead of a mortgage; title is conveyed to a trustee. Default - Failure to meet one or more conditions of the loan contract. Direct Deposit - When the member has their entire check deposited to the credit union. Also can be referred to as net pay. Dividend - Interest the member earns on their account. Dormant Account - An account that has been inactive for a period of three years. If NuVision does not receive contact from the member, the funds are escheated to the state of California. Draft - Share draft which is a personal check that is drawn on the member s account. Equal Credit Opportunity Act (ECOA)-A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs. Equity - A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage. EZ Access Check Card-This is like an ATM but with the Visa logo. This added feature allows members to make purchases through the member s checking account. Fair Credit Reporting Act -A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record. FICO (Fair Isaac Credit Score) -An Industry Standard, a FICO Credit score is used by credit agencies to determine credit worthiness. First mortgage - A mortgage that is the primary lien against a property. Fixed-Rate Loan - A loan with a fixed interest rate and fixed payments. GAP (Guaranteed Auto Protection)- This is a protection to the member if their vehicle is totaled or stolen and they financed % of their vehicle. This is needed because primary insurance carriers will only replace the actual cash value of the vehicle, based on the Blue Book value. Most vehicles depreciate as soon as they are driven off the dealer s lots. A member could experience a gap of value it they financed it for more than the now current cash value. The coverage also includes $1,000 down payment towards a new replacement vehicle. This will only be offered to the member when purchasing a vehicle. The policy has a one time fee of $399.

4 4 HELOC (Home Equity Line of Credit) - A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. Home Banking -Allows member to electronically transact on their account. Bill payment and online statements are also available online. Index -A financial indicator used to determine the interest rate on an adjustable/variable rate loan. Sample indexes include: U.S. Treasury Bill (T-Bill), 11 th District Cost of Funds and the Prime Rate. The indexes are outside of lender s control and are published in the Wall Street Journal and other financial publications. Interest-The charge paid for borrowing money. Interest Rate - The annual rate of interest on a loan. IRA (Individual Retirement Account)- Funds that are used for retirement. IRA can not have a joint, it s individual. Kelly Blue Book - The primary source for defining the monetary value of an automobile. Car dealerships use the Kelly Blue Book to value used cars for trade-ins, as well as individuals when buying a selling. Kelly Blue Book is available online Lender- The bank, mortgage company, or mortgage broker offering the loan. Loan-to-Value (LTV) -The percentage of the Loan Amount vs. the Value of the Real Property. To calculate Loan-to-value, first mortgage balance + new loan amount value Margin/Spread - A fixed percentage which is added to the index to determine the interest rate on an adjustable/variable rate loan. The margin/spread remains fixed throughout the life of the loan. MRC (Mechanical Repair Coverage) is an optional vehicle protection that pays for the cost of parts and labor. There are four tiers in this program: Platinum, Gold, Silver and Bronze. Amount of package can be paid in full by member or financed in the loan. Mortgage/Deed of Trust - A lien against of Real Estate given by the borrower to the lender as security for a loan. Non-Conforming Loan (Jumbo Loan) - A mortgage loan of $417,001and up. NSF (Non Sufficient Funds) - Money was not in the account for a check to clear. OAC (On Approved Credit) Open-end Credit (Revolving Credit) -An on-going loan with a credit limit, which is available as it is repaid. (Line of Credit, Credit Card and Home Equity LOC) Overdraft Protection -This allows us to cover checks for the member if they do not have adequate funds in their checking account. Member must sign up for this service. Payroll Deductions -Where a portion of the member s check gets distributed to a specific share. POA (Power Of Attorney) -This is when a member becomes disabled/incapacitated and they choose someone to perform financial transactions on their behalf. In order for us to change/add a POA we need the original notarized form from the attorney. **If primary signer passes away the POA is voided. The member can revoke the POA at any time.

5 5 Point - A mortgage loan fee. (1 point = 1% of the loan amount, 2 points = 2% of the loan amount, etc ) Pre-payment Penalty - A fee charged by some lenders for the early payoff of a loan. Pre-approval- When an applicant applies for a loan approval to see how much he/she qualifies to borrow, prior to buying a vehicle or a home. Principal- The original amount borrowed or the remaining amount owed excluding interest and fees. Purchase Agreement/Purchase Order- A contract between a buyer and a seller, which specifies the purchase price and gives a legal description of a vehicle. Rate - The annual rate of interest on a loan, expressed as a percentage of 100. Refinance- When a borrower gets a new loan to pay off a current loan. Usually, the borrower is refinancing to lower payments, lower the interest rate, change the terms or to get additional funds. Risked Based Lending-The process of basing a loan decision on the borrower s credit worthiness. Routing Number- A personal number assigned to a financial institution that identifies that institution from others. NuVision s routing number is Second Trust Deed (2 nd TD) - Loan taken out on the equity in ones home. The loan is closed-end and has a conforming fixed rate by financing 80% loan-to value. Secured Loan- A loan secured with collateral. UCF (Uncollected funds)- Funds were in the account but on hold. Check did not clear. Unsecured Loan- A loan not secured with collateral. Voucher- Another term used for receipt. Wire Transfer- When a member had money being sent in or out of the credit union electronically.

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