And there's no reason why you should speak bank, unless you're a banker. But there are some terms, such as those you might find on an application or in a disclosure statement, that you might want to know. Here's where to go to find them. Annual Percentage Rate (APR) is a measure of the cost of credit expressed on a year basis. The APR is not the same as the interest rate since it reflects other costs of credit beyond interest, such as loan fees. An Annuity is a fixed-rate, tax-deferred investment. Annuities offer fixed payments for a specified period of years, which is why they're popular as a way to save for retirement. Equity is the money value of a property or an interest in a property in excess of the amount owed or liens against it. An Equity Credit Line is just like an equity loan except that as you repay it, more of the credit line becomes available to you again. In addition, rather than requiring fixed monthly payments, an equity credit line lets you pay as much or as little as you wish above a minimum monthly payment amount. An Equity Loan is a loan based on the equity you've built up in your home (see equity). It has several advantages over conventional loans: loan amounts tend to be higher (because you can borrow an amount near the amount of equity you've built up) and the interest you pay may be tax deductible. One disadvantage of an equity loan is that if you fail to repay it, you could lose your house. A Fixed Rate is an interest rate that remains locked in at the original rate for the term of your loan or deposit. Interest is what a bank charges you when you borrow money. It is also the amount the bank pays you for allowing them to keep your money, as in a Time Deposit, CD, savings account, or interest-bearing checking account. Liquidity refers to the degree of ease or difficulty involved in converting financial assets like CDs or savings or investments into cash. For example, if you put money into an IRA, you can't take it out again and use it until you're 59 1/2 or older without paying sever penalties. Thus, it's not very liquid. Tax Deductible refers to an investment that lets you deduct the amount you pay into it over the course of a year from your taxable gross income. For example, if you pay $1,200 per year in interest on a mortgage loan, that amount would generally be deductible from your gross income to reduce your income tax burden. Tax Deferred refers to an investment that you don't have to pay taxes on now, but will have to later. An example would be the interest you earn on an IRA. A Variable Rate is an interest rate that may change during the term of the loan or deposit.

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