Debit
Decreases in a bank account caused by withdrawals or transfers. For example, when a check is written against an account, it is recorded as a debit.
Debt-to-income ratio
Many lenders use a debt ratio (also called debt-to-income ratio, or DTI) to approve loan applicants. Debt ratio equals combined monthly debt payments divided by gross monthly income. For example, combined monthly debt payments of $2,000 divided by a gross monthly income of $4,000 equals a debt ratio of 50%.
Deed
The legal document that transfers ownership of a piece of property (in some states). The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of that state where they property is located, and should be delivered to the buyer at closing. There are two parties to the deed: the grantor and the grantee.
Default
To default on a loan is to breach its terms. Defaults on a reverse mortgage can include but are not limited to: Failure to maintain the property, failure to pay property taxes, failure to hold hazard insurance on the property, and failure to repay a loan after a repayment notice has been issued.
Delinquent
A status indicating that you are late in paying your debts, such as monthly credit card or car loan payments. Being delinquent on your debts often means being more than 30 days late twice, or 60 days late once. Being delinquent may result in your account being transferred to a collection agency for payment, which may lower your credit score.
Deposit
An addition of funds into a bank account. This may be done in person, or by Automatic Clearing House (ACH). Many people find it convenient to have their salary checks automatically deposited into one or more bank account.
Deposit Slip
A written form that may be used when depositing funds into a bank account. A deposit slip indicates the date, the customer's name and account number, and the amounts of checks and cash being deposited. Also called a deposit ticket.
Direct deposit
Electronic deposit of wages or benefits, such as pension or social security, into a personal bank account; deposits are handled through the automated clearing house (see ACH).
Discount points
Also called points or mortgage points. A discount point is equal to 1% of the loan amount. For example, 1 point on a loan of $150,000 is $1,500. Lenders consider mortgage points as interest that you pay in advance to lower your interest rate. If you qualify, you may be able to deduct mortgage points in the year you close the loan for tax purposes. Otherwise, you will have to amortize the points paid over the term of the loan. (This definition does not constitute tax advice; please consult a tax advisor regarding your situation.)
Down payment
A down payment is the cash you deposit towards the purchase of a home. The larger the down payment, the less you'll need to borrow. For home loans, a down payment of 20% of the home purchase price is generally required to avoid paying private mortgage insurance (PMI) premiums.
