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GLOSSARY
Reverse-annuity mortgage
Reverse-annuity mortgage is a type of real estate property loan that provides a stream of income payments to an elderly homeowner. These income payments are guaranteed until the borrower passes away. Debt repayments are not required until the borrower no longer lives in the home; at that time, the lender gains ownership of the home and sells it to recover the funds borrowed.
Revocable beneficiary
A revocable beneficiary is a designated person who will receive a payout from an insurance policy, and who does't have to consent to being removed from the policy. With a revocable beneficiary, the policyholder has the option to replace the designated person if circumstances change. This differs from an irrevocable beneficiary policy, which requires the beneficiary's permission for any changes made to the policy beneficiary.
Revocable trust
Revocable trust is a legal entity created to hold assets that allows the grantor of the trust to make changes to certain trust provisions. Income generated by trust assets are usually distributed to the grantor during her lifetime; after the grantor passes away, the assets are distributed to the trust beneficiaries.
Revolver
Revolver describes a credit card holder who doesn't pay off the full balance outstanding at the end of each billing cycle. The majority of credit card holders are revolvers, because they allow some of the debt to roll over into the next billing period.
Revolving credit
A line of credit, typically a credit card, that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal.
Revolving line of credit
Revolving line of credit is a debt instrument that allows the borrower to re-borrow amounts after they've been repaid. The lender approves the borrower for a certain debt limit, then allows the borrower to borrow (up to the limit), pay down, and borrow again until maturity. At maturity, the outstanding balance must be repaid, or the line of credit must be renewed.
RHS Loan
RHS loan is a debt that's either originated by the Rural Housing Service (RHS) through the United States Department of Agriculture (USDA), or guaranteed by RHS and the USDA. RHS is an agency of the USDA. The agency manages many programs, including some designed to support homeownership in rural areas. The term RHS loan can refer to any one of several RHS loan or mortgage loan programs.
Rich
Rich describes someone who has great wealth. The term can also be used to refer to the class of people who have great wealth. More generally, rich can describe something that has a large supply of something else, as in "Avocados are rich in nutrients."
Rider
Rider is an add-on option in an insurance policy, that's used to provide the insured with an extra type of coverage that would otherwise not be included in the policy.
Right of first refusal
The agreement by an owner to give another party an opportunity to buy the property before offering it to anyone else.
Right of recourse
Right of recourse is a lender's privilege to pursue recovery of an unpaid debt through legal channels.
Right of rescission
A right which allows a borrower to change his or her mind and cancel a loan within three days. Applicable to auto, home loans and refinancing.
Right to use vacation interval option
Right to use vacation interval option is a type of timeshare ownership. The timeshare owner has the right to stay at the resort for a certain number of weeks per year, for a specified number of years. Alternatively, the owner may have a certain number of points, which can be exchanged for stays of a specified length. The timeshare owner doesn't stay in the same unit every time.
Risk
Risk is the danger of experiencing loss or harm. Risk is a primary concept in both insurance and in investing. Insurance companies set premium levels based on estimated risk of loss. Investors choose their securities positions based, in part, on the level of risk that they can tolerate.
Risk discount
Risk discount is the reduction in yield an investor accepts in return for reduced risk. As an example, an investor may voluntarily choose to purchase a government bond that yields 4 percent, rather than a corporate bond that yields 5 percent. The decision to take the lower yield (or risk discount) reflects the investor's preference for virtually risk-free government bonds versus low-risk corporate bonds.