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GLOSSARY
Disclaim
To disclaim is to deny or give up a right, ownership interest, or obligation. The action of disclaiming is usually done in writing, and it may or may not be enforceable.
Disclaimer trust
A disclaimer trust is a legal entity that holds assets for the purposes of passing them on to a beneficiary or beneficiaries at some future date. A surviving spouse can renounce ownership of assets and have them passed into the disclaimer trust without incurring the usual estate tax liabilities. The trust can then make regular payments to the beneficiaries.
Disclosed dual agency
Disclosed dual agency is a situation where a real estate broker represents both buyer and seller in a transaction; both parties are informed of the dual representation, and are made aware of the limitations of the situation. Limitations include the inability to represent the interests of both buyer and seller at the same time.
Disclosure
The release of information which is relevant to the matter at hand. A statement identifying potential defects to a property, such as the existence of lead paint or chemicals known to cause cancer. Disclosure also refers to the act of the lender informing the borrower of all of the terms of the loan at the time of signing, including interest rates and other pertinent information.
Disclosure statement
A disclosure statement is any document that spells out the terms of a debt arrangement, or other type of contractual relationship. Financial institutions must provide IRA applicants with a disclosure statement that clearly states the rules of the IRA. Lenders must provide a prospective borrower with a disclosure statement prior to loan funding, so that the borrower has a written explanation of the proposed loan terms.
Discount loan
A discount loan is a mortgage where the buyer has been given a reduced rate on a home loan when paying extra cash at closing. By purchasing mortgage points at closing, where each point equals one percent of your total loan amount, you can receive a discount loan.
Discount point
An amount or fee a borrower pays to a lender which will help decrease the interest rate on a mortgage loan. One point is equal to one percent.
Discount rate
The discount rate, in banking, is the interest rate charged to financial institutions when they borrow short-term funds directly from the Federal Reserve Bank. In finance, the discount rate is a factor in the relationship between the present and future values of cash. For example, a bond that's purchased for $60 now, and pays $100 in one year, has a discount rate of 40 percent; in other words, the future payment of $100 can be purchased now for $60, i.e., at a discount of 40 percent.
Discrete compounding
Discrete compounding is a method of calculating interest on a deposit, where accrued interest is rolled into the interest-earning balance at regular intervals. These intervals might be daily, monthly, or quarterly. Discrete compounding is an alternative to continuous compounding, where accrued interest is added to the interest-earning balance at infinitely small intervals.
Discretionary ARM
A discretionary ARM is a type of mortgage loan that gives the lender the option of changing the borrower's interest rate without limitation. Usually, the lender must only provide a certain notice to the borrower before implementing a rate change, and the rate can change in any amount. Discretionary ARMs are not offered in the U.S.
Discretionary income
Discretionary income is the amount of one's earnings that's available for voluntary spending after covering the cost of food, shelter, clothing, taxes, and other essentials.
Dishonor
To dishonor is to deny or refuse an obligation, such as failing to perform a promise made in a contract.
Disposable income
Disposable income, also known as disposable personal income or DPI, is the amount of one's income remaining after taxes have been paid. This amount represents what's available to the individual for spending and saving. DPI is monitored as an economic indicator.
Disposition fee
A fee imposed onto the lessee by some lessors at the end of a lease. The sum, spelled out in the lease, charges consumers for the privilege of giving back the vehicles they had leased from the dealer. This fee helps defray the cost for the dealer of preparing and selling the car after your lease is completed.
Distressed property
A piece of property that is in poor condition. This may also apply to the owner of the property if he or she is in poor financial condition.