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GLOSSARY
Second chance loan
A second chance loan is a debt offered to a borrower who has prior credit problems. Generally, this type of loan is characterized by restrictive terms and a high interest rate. The borrower generally stays with the second chance loan just long enough to rebuild her credit history, then refinances to a more affordable debt as soon as she qualifies.
Second mortgage
A mortgage made subsequent to the previous one or subordinate to the first one. The lenders of the second mortgage gets paid after the first mortgage is paid. See further First mortgage
Second-chance auction scam
Second-chance auction scam is the practice of offering non-winning bidders the opportunity to purchase the item through unauthorized forms of payment, after the close of an online auction. Sometimes, this scam is used to obtain the bidder's bank account information fraudulently.
Second-to-die insurance
Second-to-die insurance is a policy that's written to two people, and pays benefits when the last surviving person dies. Usually, this type of insurance is used by married couples for the purpose of paying estate taxes or supporting surviving children.
Secondary CD
Secondary CD is a time deposit issued by a brokerage that can be bought or sold prior to maturity. Secondary CDs are theoretically more liquid than bank CDs (which must be held until maturity), but there's no guarantee that the investor will be able to sell the CD for his full investment plus interest.
Secondary mortgage market
Buying and selling of mortgages to collect more funds and grant new loans. It gives more liquidity to lenders.
Seconds
Seconds is the term used for merchandise that's badly damaged or flawed. Seconds are usually sold at huge discounts off the standard prices.
Section 1031
Section 1031 is the part of U.S. tax law that defines a method for investors to defer capital gains taxes. Such deferral is allowed when the appreciated property is exchanged for a "like-kind" property that's to be used for business or investment purposes. An investor, for example, may sell one rental property and buy another with no tax effect. If the second property is sold with no corresponding reinvestment, taxes would then be assessed. The gain is calculated from the cost basis of the original investment.
Section 1035 exchange
Section 1035 exchange is the name for a tax-free trade of one annuity contract for another, as defined by Section 1035 of the U.S. tax code. Such a trade must involve the same policyholder on both contracts and contracts that are equivalent in value.
Section 1245
Section is 1245 is the part of the U.S. Tax Code that explains how the sale of depreciable property may qualify as a taxable capital gain rather than taxable income.
Section 1250
Section 1250 is the part of the U.S. Tax Code that mandates the treatment of gains earned from the sale of real estate that has been depreciated on an accelerated basis. Any gain in excess of what would have been earned had the property been depreciated on a straight line basis, is taxed as regular income.
Section 179 expense
Section 179 expense is the name for a fixed asset purchase that's expensed through the income statement immediately, rather than being capitalized on the balance sheet and depreciated over time. This treatment is allowed under Section 179 of the U.S. Tax Code.
Secure option ARM
Secure option ARM is a real estate mortgage loan that's characterized by payment options and an initial fixed-rate period followed by an adjustable-rate period. For a specified period of time, the borrower has the option to make one of generally three payment amounts. Making the lowest amount results in negative amortization; making the middle amount pays only the monthly interest; and making the largest amount reduces the principal balance. Because the mortgage carries a fixed-rate initially, these payment levels remain stable unless the negative amortization limit is reached. At some point, the fixed-rate period will end, and the loan will convert to an adjustable rate.
Secured card
Secured card is a credit card that's tied to a cash deposit. The cash deposit serves as collateral; the card issuer can dip into that deposit if required minimum payments on the account are not made. Secured credit cards are used by individuals who don't qualify for a traditional credit card because they have poor or no credit.
Secured credit card
Secured credit card is a credit card that's tied to a cash deposit. The cash deposit serves as collateral; the card issuer can dip into that deposit if required minimum payments on the account are not made. Secured credit cards are used by individuals who don't qualify for a traditional credit card because they have poor or no credit.