Page 134 - The Informed Fed--Hearn Wealth Management

Mortgage Corporation (FHLMC) guidelines. Such loans include jumbo
loan, sub-prime loans and high-risk loans. Also known as the type of

loans that caused the mortgage crisis!

Note: Note is a legal document that acknowledges a debt and the terms

and conditions agreed upon by the borrower.

Open-end fund: An Open-end mutual fund continuously issues and
redeems units, so the number of units outstanding varies from day to
day. Most mutual funds are open-end funds. The opposite of closed-end

fund.

Origination fee: The origination fee on a mortgage is usually the

amount charged by the lender for originating the loan. Origination fees
vary by lender and are expressed in points where one point is equal to
1% of the original loan balance.

Over-the-counter (OTC) Market: Market created by dealer trading as

opposed to the auction market, which prevails on most major exchanges.

Paper gain (loss): Unrealized capital gain (loss) on securities held in

portfolio, based on a comparison of current market price to original cost.

Payroll Deduction: Payments made on your behalf by your employer.
They are automatically deducted from your paycheck.

Points: Points are charges added to a mortgage loan by the lender and

are based on the loan amount. One point is equal to 1% of the original
loan balance.

Policy: A contractual arrangement between the insurer and the insured
describing the terms and conditions of the life insurance contract.

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