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GLOSSARY
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.
Distribution
A distribution is a payment or allocation. The term is most commonly associated with withdrawals from retirement or other tax-advantaged savings accounts, dividend or capital gain payments made from a mutual fund to its investors, or cash or stock payments made from a company to its shareholders.
Diversification
Diversification is a tenet of conservative investing. It calls for spreading out investment funds among different classes of assets, different industries, and/or different companies, in order to reduce risk.
Divestiture
Divestiture is the act of selling off all or part of an investment. When a company sells off a business unit, for example, it's said to be divesting that unit. Divestiture is also known as divestment, i.e., the opposite of investment.
Dividend
A taxable distribution or payment of earnings to shareholders as declared by a company's board of directors. In credit unions, a dividend is the money paid to members for deposits. This is similar to the interest banks pay to their customers for their deposits.
Do Not Call Registry
The Do Not Call Registry is a list of telephone numbers that telemarketers are not allowed to call. The Registry is maintained by the U.S. Federal Trade Commission; numbers are registered upon request and without charge.