For capital gains tax purposes, the adjusted cost basis is how the IRS determines your profit or loss when you sell an asset such as a home or security. For an investment such as a mutal fund or stock, your cost basis is what you originally invested plus any reinvested money. For a home, you arrive at the adjusted cost basis by adding the original purchase price to the cost of any capital improvements (expenditures that increase your property's value and life expectancy).

Your gross income, less certain allowed business-related deductions.  These deductions include alimony payments, contributions to a Keogh retirement plan, and, in some cases, contributions to an IRA

The amount a cardholder pays to a credit card company for the right to hold a particular credit card

A stream of equal payments, as to a retiree, that occur at predetermined intervals (for example, monthly or annually). The payments may continue for a fixed period or for a contingent period, such as the recipient's lifetime.  Annuities are most often associated with insurance companies and retirement programs.

Annual Percentage Rate (APR): The figure that states the total yearly cost of a loan experessed by the actual rate of interest paid. The APR includes the base interest rate and any other add-on loan fees and costs.  The APR is thus inevitably higher than the rate of interest that the lender quotes.

Adjustable-Rate Mortgag (ARM): A mortgage whose interest rate and monthly payments vary throughout its life.  ARMs typically start with an artifically low interest rate that gradually rises over time. The interest rate is determined by a forumal: margin (which is a fixed number) plus index (which varies). Generally speaking, if the overall level of interest rates drops, as measured by a variety of different indexes, the interest rate of your ARM generally follows suit.  Similarly, if interest rates rise, so does your mortgage's interest rate and montly payments.  Caps limit the amount that the interest rate can flucuate. Before you agree to an ARM, be certain that you can afford it's highest possible payments.

a high-quality investment involving a lower-than-average risk.  Blue-chip investment is generally used to refer to securities of companies having a long history of sustained earnings and dividend payments

In this insurance, part of the premium is used to provide death benefits, and the remainder is available to earn interest.  Cash-value life insurance is a protection plan and a savings plan that changes charges significantly higher premiums than term insurance

A receipt for a deposit of funds in a financial institution that permits the holder to receive interest plus the deposit at maturity

Assets pledged as security for a loan.  If a borrower defaults on the terms of a loan, the collateral may be sold, with the proceeds used to satisify any remaining obligations.  High-quality collateral reduces risk to the lender and results in a lower rate of interest on the loan.

A measure of the relative cost of living compared with a base year (currently 1967).  The CPI can be a misleading indicator of inflationary impact on a given person because it is constructed according to the spending patterns of a urban family of four.  Used as a measure of inflation

A share of a company's net profits distributed by the company to a class of its stockholders.  The dividend is paid in a fixed amount for each share of stock held.  Dividends are usually fixed in preferred stock; dividends from common stock vary as the company's performance shifts.

A security issued by the Federal National Mortgage Association (FNMA) that is backed by insured and conventional mortgages.  Monthly returns to holders of Fannie Maes consists of interest and principal payments made by homeowners on their mortgages.

A privately owned profit-seeking corporation that adds liquidity to the mortgage market by purchasing loans from lenders. It finances the purchases by issuing its own bonds or by selling mortgages it already owns to financial institutions.

Prepaid interest paid as a fee to a mortgage lender to cover the cost of applying for the loan. One point is one percent of the loan's value.

taxes assessed on real estate. Most common are municipal and school taxes. Also called real estate tax.