D

Debt
An amount of money owed from one person or firm to another.

Debtor
A person or entity (such as a bank) that owes money.

Debt Service
The sum of monthly payments required on credit cards, installment loans, home equity loans, and other debts, but not including payments on the loan applied for.

Debt-to-Income Ratio
A measure of creditworthiness that calculates your debts as a percentage of income, and is calculated by dividing the total of your long-term debt payments by your gross income.

Deed
A legal document that conveys title to real property.

Deed in Lieu of Foreclosure
When a homeowner can’t make the mortgage payments and can’t find a buyer for the house, the lender may accept ownership of the property in place of the money owed on the mortgage.

Deed of Trust
The document used in some states instead of a mortgage; title is vested in a trustee to secure repayment of the loan.

Default
Failure to make scheduled monthly payments according to the agreed-upon terms.

Deferred Interest
When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance.

Deferment
A period during which a borrower, who meets certain criteria, may suspend loan payments. For some loans the federal government pays the interest during a deferment. On others, the interest accrues and is capitalized, and the borrower is responsible for paying it.

Deficiency Judgment
A court order to pay the balance owed on a loan if the proceeds from the sale of the security are insufficient to pay off the loan. Deficiency judgments are not allowed in all states.

Delinquency
Failure to make monthly loan payments when due.

Deposit
A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

Depreciation
A decline in the value of property because of physical or economic changes such as wear and tear; the opposite of appreciation.

Disclosure Statement
Statement of the total cost and amount of a loan, including the interest rate and any additional finance charges.

Disclosures
Information that must be given to consumers about their financial dealings.

Discount Point
A unit of measurement used for various loan charges; one point equals one percent of the amount of the loan.

Documentary Stamps
A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each State.

Dower
The rights of a widow in the property of her husband at his death.

Down Payment
The portion of the purchase price usually paid immediately upon purchase, in the form of cash or trade-in value.

Due Diligence
If a borrower fails to make payments on their loan according to the terms of the promissory note, the federal government requires the lender, holder, or servicer of the loan to make frequent attempts to contact the borrower (via telephone and mail) to encourage him or her to repay the loan and make arrangements to resolve the delinquency.

Due-On-Sale Provision
A provision in a mortgage home loan that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the loan.

Due-On-Transfer Provision
This terminology is usually used for second mortgages. See due-on-sale provision.