glossary

GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

V (Variable)

IF the letter V is after the APR on your interest rate that means that is it variable and subject to change.

VA loan

A mortgage that is guaranteed by the Department of Veteran's Affairs and made available to a borrower with a low down payment.

Vacation home

Vacation home is a second residence that's used by the owner only periodically.

Valuable consideration

Valuable consideration is a legal concept that refers to something of worth that underlies an agreement. For a contract to be valid, there must be valuable consideration, meaning that there must be some value associated with the obligations described in the contract. An example of an arrangement that lacks valuable consideration would be a contract obligating one party to give his house to another party for nothing in return.

Value averaging

Value averaging is an investment strategy whereby the investor makes periodic contributions according to a monthly value growth target. Say, for example, that an investor's target is to build the account value by $1,000 quarterly. After one quarter, the account has grown by $800. The investor, therefore, would contribute another $200 to the account to reach the $1,000 goal. This strategy leads the investor to purchase more when values are decreasing, and less when values are increasing.

Variable death benefit

Variable death benefit is a type of payment made to an insured's beneficiary following the insured's death. The exact amount of a variable death benefit is dependent upon how the investment component of the insurance policy performed. Where the performance is sufficient, an additional amount is added to the insured's guaranteed, minimum death benefit.

Variable interest rate

An interest rate which fluctuates up and down based on the rate index.

Variable rate mortgage

A mortgage in which the interest rate is changed periodically based on a financial index. Also referred to as an adjustable-rate mortgage.

Vehicle identification number

Vehicle identification number, or VIN, is a unique series of characters assigned to an automobile by the manufacturer. Since 1980, VINs have been standardized to be 17 characters in length.

Vendor financing

Vendor financing is a loan made by a company to its customers; loan proceeds are used by the customer to buy products or services from the company that made the loan. Companies that offer vendor financing can increase sales and earn interest. Generally, vendor financing is slightly more expensive than bank financing.

Vendor take-back mortgage

Vendor take-back mortgage is a first or second purchase mortgage that is financed by the home seller. If the buyer doesn't qualify for a traditional mortgage, the seller can finance part or all of the purchase to facilitate the sale. Generally, a vendor take-back mortgage is priced below market value so that it's affordable for the buyer.

Verbal agreement

A verbal agreement is an arrangement made between two or more parties that's not backed by written documentation. Verbal agreements are legally valid where their existence can be proven. Unfortunately, the lack of supporting documentation makes verbal agreements very difficult to enforce.

Verification of deposit

A document signed by the borrower's financial institution verifying the balance of the applicant's financial accounts.

Verification of employment

A confirmation that the loan applicant is being truthful about where he or she works and their income.

Veterans administration

A government agency that guarantees mortgage loans given to eligible veternas to protect the lenders against loss.