A real estate agent is a realtor when he is a member of The National Association of Realtors. It is also a registered collective membership mark that identifies with a real estate professional who is a member of the NAR and follows a strict code of ethics.

Radon gas

Radon is a cancer-causing, radioactive gas that kills 21,000 Americans a year, according to the U.S. Environmental Protection Agency. Some states' real estate laws require a seller to inform potential buyers when it is present.


The percentage of interest a borrower pays for the use of money.

Rate after intro

The interest rate that will apply to the line of credit after the promotional or introductory period is over.

Rate index

This index is used to determine the interest changes on an adjustable rate mortgages and variable rate loans. It is expressed in a table format and quotes the yields that are being paid on debts like Treasury Bills and bank deposits.

Rate lock

A commitment guaranteed by a lender that an interest rate will not change on a quoted mortgage for a specific period of time.

Rate improvement mortgage

A mortgage with a one time interest rate cut that allows a borrower to save money on his mortgage without paying a refinancing charge.

Reaffirmation agreement

An agreement by someone involved in a Chapter 7 bankruptcy to continue paying a debt after the bankruptcy. This is typically used to keep a car from being repossessed during bankruptcy.

Real estate agent

A licensed person who negotiates a real estate transaction and represents either the buyer or the seller.

Real estate attorney

A lawyer who specializes in real estate title transfers and property tax issues.

Real estate broker

A broker is similar to an agent but often has agents working under them and takes a percentage of the agent's commission in exchange for office space and overhead. The broker will also represent a buyer or seller in a real estate sale.

Real estate bubble

A rapid increase in the prices of homes followed by a steep drop off.

Real estate investment trust

Referred to as a REIT. This trust invests primarily in real estate and passes the income and losses onto the investors.

Real estates

Land, building or improvements on the property,

Real Estate Settlement Procedures Act

Known as RESPA. A law protecting consumers from abuses and usury that requires lenders to give homebuyers advance notice of closing costs, settlement costs, relationships and lending practices.

Real financing cost

A rate that takes into account specific costs, fees, rate changes and the projected amount of time you will have the loan.

Real property

Unmovable property, like buildings and land.


Agreements between states that help reduce or eliminates non-resident fees at public universities to help lower costs for out-of-state residents.


The official transfer of the property title after the mortgage has been paid in full.


A public or government official who keeps and maintains real-estate records.

Recording fee

A fee charged by the government to file records of real estate.


Debtors sometimes may keep exempt secured property even though they owe money on it by paying the creditor the market value of the property rather than the amount of the debt.


The illegal practice sometimes used by shady lenders and insurance companies to deny loans and other services to people because of their neighborhood or ethnicity.


Repaying a mortgage with another mortgage which has a lower interest rate. Homeowners typically take advantage of turning their equity into cash.

Rehabilitation mortgage

A home loan that is used to make improvements and to reconstruct the property. Sometimes this type of mortgage is rolled into the initial mortgage.

Regulation Z

A federal banking rule that implements the Truth-in-Lending Act. It requires standardized disclosures of credit costs.


Land that is made available when a sea or river permanently recedes.

Relocation benefits

A benefit that a company gives an employee when the company has asked the employee to relocate for the company's benefit. These may include moving, packing, transportation, and storage. It may also encompass trips to look for real estate and temporary housing.

Remaining balance

The amount left to pay on a loan.

Remaining term

The amount of time it will take to pay off the loan.

REMIC (Real Estate Mortgage Investment Conduit)


Renter's insurance

An insurance policy that pays for the loss and damage of personal property but not the real estate.

Repayment plan

A modification of an existing loan after the borrower has been delinquent. Usually used when the borrower misses payments but the lender does not foreclose.


When a lender takes back the property when the borrower stops making payments.

Requested cash out

The amount of money you request to get back from your mortgage transaction.

Return on investment

A percentage which dictates how much you invest in making improvements versus how much it is worth to someone who is potentially interested in buying your home.

Resale value

The selling price that would be negotiated by a willing seller and buyer for an existing home or property.

Residual value

An agreed upon amount which represent the value of the car at the end of a lease.


See Real Estate Settlement Procedures Act

Restructured loan

When a mortgage's basic terms, such as interest rate, term and monthly payment, have been changed to prevent foreclosure.

Reverse mortgage

A type of loan that allows seniors homeowner to use the funds from their built-up equity. There are no payments due until the borrower moves, dies, or the property is sold. The final payment will not exceed the proceeds from the sale of the home.

Revolving credit

A line of credit, typically a credit card, that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal.

Right of first refusal

The agreement by an owner to give another party an opportunity to buy the property before offering it to anyone else.

Right of rescission

A right which allows a borrower to change his or her mind and cancel a loan within three days. Applicable to auto, home loans and refinancing.

Roll in

When you include certain closing costs, such as origination and settlement fees into the mortgage. This results in lower closing costs and higher monthly payments.

Roll in loans


Rural Housing Service

An agency of the US Department of Agriculture that provides farmers or other rural inhabitants financing to purchase land or homes when they cannot get a loan from other financial providers. These loans are have low interest rates and usually require no down payment.

Rabbi Trust

A Rabbi trust, also called a grantor trust, is a legal entity created by an employer to provide for non-qualified employee benefits. The name comes from the first IRS ruling on the subject, which involved a synagogue.

Rain check

A rain check is the promise by a business to a customer that a sold out sale item can be purchased at some later date for the discounted price. A rain check can also be a ticket entitling a person to a replacement event, when the original event is rained out.


RAL stands for refund anticipation loan; it's a short-term loan offered to a taxpayer who's expecting a tax refund. The borrowed funds are repaid when the tax refund arrives.

Rate and term refinance

Rate and term refinance is the restructure of a mortgage loan that involves changing the interest rate and maturity length of the loan. The loan amount doesn't change with a rate and term refinance. These mortgage loans are often less expensive than cash-out refinances, which are made in amounts larger than the original mortgages.

Rate shopping

Rate shopping is the process of applying for a loan with more than one lender, in an effort to find the most attractive terms.


Rate-improvement mortgage is a fixed-rate, real estate loan that includes a rate-improvement option. The rate-improvement provision allows the borrower to reduce the loan's interest rate one time during the loan's life. Without this provision, such a rate change would require a refinance.

Rate-improvement mortgage



A rating, in finance, is an assessment of the financial strength of a person, business, or debt issue. Credit ratings are used for people and businesses, stock ratings are used for equities, and bond ratings are used for commercial and municipal debt.

Real asset

A real asset is property that has value based on its utility. Land and equipment are real assets, but securities holdings are not.

Real estate

Real estate is land. Most of the time, the ownership of land includes ownership of the buildings and resources located on that land.

Real estate investment group

A real estate investment group is an organization that purchases a portfolio of properties that are resold in shares to investors. The group manages the tenants and property maintenance in return for a percentage of rent proceeds.

Real Estate Investment Trust - REIT

A Real Estate Investment Trust, or REIT, is an exchange-traded security that invests in real estate. REITs often specialize in certain types of real estate investments. For example, an Equity REIT owns rental properties and a Mortgage REIT purchases or funds mortgage loans.

Real Estate Limited Partnership - RELP

A Real Estate Limited Partnership, or RELP, is a business entity formed to profit from land holdings, either through development or capital appreciation. RELP partners participate directly in the business activities.

Real Estate Mortgage Investment Conduits - REMIC

Real Estate Mortgage Investment Conduits, or REMICs, are securities that are backed by segmented pools of mortgages. Each segmented pool supports a different class of security, each of which carries a different maturity and coupon.

Real Estate Operating Company - REOC

Real Estate Operating Company, or REOC, is an exchange-traded security that invests in real estate. REOCs are different from Real Estate Investment Trusts (REITs) because REOCs reinvest earnings back into the business, while REITs distribute all profits to investors. REOCs generally seek to provide investors with strong capital gains (rather than regular income).

Real estate or real property

Real estate or real property are both terms for land, inclusive of the buildings and natural resources on the land.

Real estate owned

Real estate owned is a lender's portfolio of properties that failed to sell at foreclosure auctions. Once the property fails to sell at the auction, the lender must try to sell it on the real estate market. Investors target these properties, because they typically sell at a discount.

Real interest rate

Real interest rate represents the rate earned by an investment, discounted for inflation. Say, for example, that an individual purchases a bond paying 6 percent interest, and the inflation rate is 5 percent. The real interest rate is 1 percent, or the portion of the rate that's in excess of the inflation rate.

Realized gain

Realized gain is the profit earned when an asset is sold for more than it cost to acquire. Realized gains usually have tax consequences.

Realized loss

A realized loss occurs when an asset is sold for less than it cost to acquire. Realized losses can be used to offset the taxes owed on realized gains.


A Realtist is one who maintains membership in the National Association of Real Estate Brokers.

Reasonable and customary charges

Reasonable and customary charges are standard fees charged by healthcare providers for a particular service or procedure.




Rebalancing is the process of re-allocating invested funds so that a portfolio follows an intended investment strategy. Periodic rebalancing is necessary because the allocation of funds will change as securities perform at different levels. For example, one security may experience a value increase of 25 percent, while the rest of the portfolio grows at an average of 8 percent. The investor will then have too much exposure in the out-performing security. Rebalancing will return the portfolio to the desired asset allocations.


A rebate is a partial refund of a purchase transaction. More generally, a rebate can also be a discount, incentive, or kickback, such as the discount provided when a bill of exchange is fulfilled before maturity. In a bond short sale, the lender will sometimes pay a rebate of interest earned on the sale's proceeds to the seller.

Rebate card

A rebate card is a plastic card that holds transaction data so that the customer can accrue cash or merchant credit. Rebate cards are used to foster customer loyalty.

Recast trigger

Recast trigger is a predefined event that will reset payments on a negative-amortizing mortgage loan so that the mortgage converts to a fully amortizing structure. Mortgages that allow for negative amortization, such as Option ARMs, will have defined recast triggers. Usually, there'll be a recast trigger date and a recast trigger amount. If the loan balance rises to a certain level, the mortgage automatically converts to fully amortizing payments. Otherwise, the loan will convert at the recast trigger date.


A receipt is the written documentation of a purchase transaction.


A receiver is an individual assigned to manage a bankrupt company's assets, such that creditors can be paid back as much as possible. The receiver's role may be limited to selling off the company's assets, or it could involve managing company operations for a short period of time.


Receivership is a stage of a business bankruptcy proceeding. The company is said to be in receivership when the court has assigned an individual to run the operations temporarily. This individual is tasked with managing the assets so that creditors can be repaid as much as possible.


Recession is an economic state where overall production is stagnant or declining. Generally, it's viewed as a fall in the Gross Domestic Product for two quarters in a row.

Recognized gain or loss

Recognized gain or loss is the profit earned, or deficit incurred, from the sale of an asset. When the asset is sold for more than its purchase price, the seller recognizes a gain. When the asset is sold for less than its purchase price, the seller recognizes a loss. Recognized gains are usually considered taxable income, but these gains can be offset by recognized losses.

Reconditioning reserve

Reconditioning reserve is a deposit paid by one who leases a car; the reserve amount is held by the lessor and used to offset any amounts owed at lease maturity.


Recording is the entering of a document into public record. Transactions affecting property titles, such as ownership changes, liens, and leases, are usually recorded (by a County Recorder for example), so that the general public has access to the information.

Recourse loan

A recourse loan is a secured debt facility extended to a direct participation program or limited partnership that provides the lender with an ownership claim on the entity's general assets in addition to the specified collateral. More generally, a recourse loan can also be a guaranteed loan, where the lender can go after the guarantor for payment if the borrower defaults.

Recurring debt

Recurring debt is any repeating payment obligation that can't be canceled. Child support payments and loan payments are both recurring debts. An individual's total recurring debt level is considered by the lender during the loan approval process.

Red flag

A red flag, in general, is a sign of a potential problem. In investing, a red flag is a factor that can potentially reduce the earnings power of a publicly traded company. A red flag, in this sense, can be almost anything that would affect the company's operations, from pending legislation to technological advances.

Redevelopment or Enterprise Zone

A Redevelopment or Enterprise Zone is an area that the government designates as needing incentives to promote business activity. Businesses that open or operate within the designated zone may be eligible for special tax breaks.

Refinance wave

A refinance wave is a trend of mortgage refinancing that is prompted by a large drop in market interest rates. The rate drop must large enough that borrowers can save a noticeable amount of money in total interest and monthly payment amount, even after considering the out-of-pocket closing costs associated with a refinance.

Refinancing risk

Refinancing risk is the chance that the costs for renewing a debt facility will be higher than expected. Say, for example, that a company owes $100,000 on a short-term, interest-only loan. At maturity, if the company can't pay off the debt, it must be refinanced at whatever rate is available, given prevailing economic conditions. There's a risk that the best rate available will be higher than the company can afford.


A refund is a return payment of previously collected funds. In taxes, for example, the government sends a refund check to taxpayers who overpay during the tax year.

Refundable credit

Refundable credit is a tax credit that can result in the government owing funds to the taxpayer. Refundable credits can reduce a taxpayer's tax liability to a negative number, such that the government then owes the negative amount to the taxpayer.

Regional bank

A regional bank focuses its services on a target customer base that's defined by a large geographic area, such as a state. Regional banks are somewhat larger than community banks, but they don't have a national presence.

Registered Education Savings Plan - RESP

Registered Education Savings Plan, or RESP, is a college savings program available in Canada. Contributions are made with after-tax money, but earnings made within the plan grow tax-free.

Registered Pension Plan - RPP

Registered Pension Plan, or RPP, is a pension benefit trust available in Canada. An employer establishes the RPP, and contributions are made by the employer and employee. Contributions are tax-free and earnings are tax-deferred. Taxes are incurred on withdrawals made from the plan.

Registered Retirement Income Fund - RRIF

Registered Retirement Income Fund, or RRIF, is an annuity program available in Canada. RRIFs are often funded by Registered Retirement Savings Plans (RRSPs). The RRIF is structured to provide a stream of income payments to the accountholder during retirement. These income payments are taxed as income.

Registered Retirement Savings Plan - RRSP

A Registered Retirement Savings Plan, or RRSP, is a retirement trust available in Canada. Similar to the U.S. IRA, the RRSP allows for tax-deductible contributions and tax-deferred earnings. Money held in the RRSP can be invested in stocks, mutual funds, bonds, etc.

Registered Retirement Savings Plan Contribution - RRSP Contribution

A Registered Retirement Savings Plan contribution, or RRSP contribution, is a tax-deductible deposit made to an RRSP, which is a retirement trust available in Canada. RRSP contributions are subject to annual limitations, but any allowable amounts not used during the year can be carried forward indefinitely.

Registered Retirement Savings Plan Deduction - RRSP Deduction

A Registered Retirement Savings Plan deduction, or RRSP deduction, is the tax break that occurs when a Canadian taxpayer deposits money into an RRSP retirement trust. The contribution amount can be deducted from the taxpayer's taxable income, thus reducing the individual's tax liability for the year.

Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit

Registered Retirement Savings Plan deduction limit, or RRSP deduction limit, is a cap on the tax breaks allowed for contributions made to a RRSP Canadian retirement trust. Deduction limits are calculated from the taxpayer's annual income, with adjustments made for certain pension transactions and unused RRSP deductions from previous years. The RRSP deduction limit is listed on the taxpayer's Notice of Assessment.

Regulation G

Regulation G is legislation pertaining to loans made by lenders and other corporations to fund the purchase of securities. It was adopted by the Federal Reserve Board in 1968.

Regulation T

Regulation T is legislation pertaining to cash and margin accounts offered to consumers by brokerages. This Federal Reserve Board regulation limits margin loans to 50 percent of the purchase price of the securities.

Regulation U

Regulation U is the Federal Reserve Board legislation that defines the requirements under which commercial lenders can offer credit secured by margin stock. Regulation U applies to commercial banks and credit unions, but not securities brokers or dealers.

Rehabilitation mortgage or rehab mortgage

A rehabilitation mortgage (rehab mortgage) is a real estate loan that finances both the purchase of a home and specified improvements to the property. Usually, the borrower will have to submit a detailed outline and cost estimate for the improvements during the loan approval process. After the purchase amount of the loan funds, the lender will set up an escrow account to hold and distribute the improvement portion.


Rehypothecation is a bank's pledge of customer-owned securities held in a margin account for the purposes of securing a loan.


To reinstate is to restore or renew something. A past-due loan, for example, can be reinstated to current status once the necessary repayments are made. Also, insurance coverage can lapse due to non-payment, but the insured usually has a certain period of time to make the necessary premium payments and have the coverage reinstated.


REIT stands for real estate investment trust. This is an exchange-traded security that invests in real estate holdings such as commercial office buildings or mortgage loans. REITs receive tax benefits in return for passing 90 percent or more of their earnings to shareholders.


Rejection is denial of an application, such as for a loan or an insurance policy.

Relationship or member of household test

Relationship of member of household test is one of five checks that confirm whether you can claim another individual as a dependent on your U.S. tax return. According to the relationship test, you can claim the individual as a dependent if that individual is your child, adopted child, stepchild, foster child, parent, stepparent, grandparent, sibling, half-brother, half-sister, step-sibling, child of a sibling, uncle, aunt, or relative by marriage (an in-law). Spouses are not dependents.

Release clause

Release clause is legal language in a mortgage loan agreement that allows a portion of the property to be released from the loan collateral after a certain percentage of the debt has been repaid.

Release of liability

A release of liability is the lender's termination of a debtor's responsibility to repay monies borrowed.

Relocation company

A relocation company is a business that earns fees for helping transferred employees move to a new community.

Relocation mortgage - relo

A relocation mortgage, or relo, is a real estate property loan designed specifically for transferred employees. Relos have special characteristics, such as discounted closing costs or closing costs paid for by the employer. Relos can also trade at a premium on the secondary market. Because data indicates that relocated employees tend to move at regular intervals, the prepayment rate on these mortgages tends to be more predictable.

Remaining principal balance

Remaining principal balance is the amount of borrowed funds that has not been repaid as of a certain date.

Remote deposit capture

Remote deposit capture is a banking service that eliminates the need for a bank to present a physical check to another bank for processing. Instead, the checkholder scans the check and forwards the scan (but not the check itself) to the paying bank for processing.

Renegotiable rate

Renegotiable rate is the interest rate attached to a short-term loan that's structured with a balloon payment due at maturity. During the short-term period, the interest rate is fixed; at maturity, however, the lender has the option to refinance the remaining amount due at a higher interest rate.

Rent loss insurance

Rent loss insurance is a policy that protects an investment property owner from a loss in the property's rental value due to damage.

Rent to own

Rent-to-own describes an agreement between a merchant and a consumer whereby the consumer may use certain goods (usually furniture or appliances) temporarily by paying a periodic fee. The consumer can stop paying the fee and return the goods at any time. The consumer can also choose to purchase the goods by paying the periodic fee for a specified length of time, or by making an additional lump sum payment. The exact terms of this option would be stated in the rent-to-own agreement.

Rental reimbursement

Rental reimbursement is an optional type of auto insurance that pays for the cost of a rental car while your insured car is being repaired after an accident.

Reorganization plan

Reorganization plan is a set of agreements made in a bankruptcy proceeding between a bankrupt individual or business, its creditors and the court. The plan specifies how certain past-due debts will be repaid over a specific timeframe, usually five years or less. During this time, the debtor must also remain current on other debts as they come due. Reorganization plans are an alternative to liquidation.


Repayment is the settlement, or paying back, of a debt.

Repayment period

Repayment period is the window of time when further draws cannot be made against a home equity line of credit or unsecured line of credit; the only transactions allowed are repayments.

Replacement cost

Replacement cost is the estimated expense of buying or building an asset to replace another asset. Replacement cost is relevant for insurance purposes, because the replacement of a used asset is likely to cost more than the asset's market value.

Replacement reserve fund

Replacement reserve fund is an account maintained by a homeowners or condominium association. The money in the fund is used to replace property in common areas, such as swing sets or greenbelt benches.


Replevin is a legal proceeding taken by one who wishes to recover personal property that's illegally held by someone else. Replevin can, for example, involve a creditor's seizure of personal property (not real estate) that was used as collateral for debt.

Required minimum distribution

Required minimum distribution, or RMD, pertains to traditional, SEP, and SIMPLE IRAs. The IRA accountholder must take a certain amount of money out of the account by April 1 of the year he turns 70-1/2, and then every year thereafter. The exact amount is dependent on the person's age and life expectancy. If the RMD isn't taken, the accountholder will be charged an excise tax by the IRS.

Required minimum distribution - RMD


Rescheduled loan

Rescheduled loan is a debt facility that has been restructured due to the borrower's inability to make scheduled payments under the previous terms. Usually a rescheduled loan will have the maturity date extended from what was specified in the original loan agreement.


Rescission is the cancellation or annulment of a contract or obligation, often by mutual consent of the parties involved. In mortgage lending, for example, federal law provides the borrower with the right to rescind a mortgage agreement within three days of signing the document.


Reserve is any amount set aside to cover unexpected circumstances. In personal finance, a reserve can be the household's emergency fund. In asset-based lending, the reserve is the value of the collateral over and above the debt outstanding.

Reserve fund

Reserve fund is an amount of money set aside to cover unexpected circumstances. A homeowners association, for example, might have a reserve fund that's used to pay for periodic repairs. Financial advisors recommend that households maintain a reserve fund that's equivalent to three to six months of living expenses. Reserve funds can also be called emergency funds.


Reset, in finance, refers to the update of an interest rate, so that it retains a specific relationship to a reference rate. On an adjustable-rate mortgage loan, for example, the rate is stated as a margin plus a specified reference rate. If this loan is structured to be reset annually, then the interest rate would be adjusted once a year to reflect any reference rate changes that occurred over the previous 12 months.

Reset frequency

Reset frequency is the rate of occurrence of changes to an interest rate on an adjustable-rate loan. Reset frequency is specified in the loan documentation.

Resident alien

A resident alien is an individual who lives in one country, but has citizenship in another. Resident aliens in the U.S. typically have a current green card, or have had a green card within the last calendar year. In the U.S., resident aliens generally pay the same taxes as U.S. citizens.

Residential mortgage

Residential mortgage is a loan that's secured by residential property. A residential mortgage is generally a long-term debt facility that can be structured with either fixed or adjustable interest. In the U.S., residential mortgage interest is tax-deductible.

Residual income

Residual income is the money left over from earnings after debts are paid. Typically, residual income is analyzed in terms of one month's income and debt requirements; the level of one's residual income is a factor that lenders consider when evaluating a borrower's creditworthiness. Higher residual income indicates that the individual will be more capable of meeting required debt payments when unexpected expenses arise.

Residual interest

Residual interest is the interest available to lower tranches of investors in a real estate mortgage investment conduit. Residual interest isn't paid out until all regular interest payments have been made to the higher tranches of investors.

Respite care

Respite care is temporary, short-term care of an ill, disabled, or invalid person, usually for the purposes of giving the primary caregiver a break. Respite care can be provided in-home or in another location, as agreed upon by the primary caregiver, the person needing care, and the respite provider.

Restrictive covenant

A restrictive covenant is a rule that limits someone's rights, usually either a borrower or a property owner. Homeowners associations place restrictive covenants on property owners to keep them from using the property in ways that are considered detrimental to the neighborhood. Commercial loan agreements also might include restrictive covenants, to prohibit the business from taking actions that may hinder its ability to repay the loan.

Retail lender

A retail lender is a financial institution that lends money to individual borrowers by way of mortgage loans, auto loans, and personal loans. Consumer banks, mortgage lenders, and credit unions are retail lenders.

Retail lending

Retail lending is the service of lending money to individual consumers, such as homebuyers and auto buyers.

Retail note

Retail note, also called a retail bond, is a type of debt investment that pays a fixed rate of interest for a specified time period. Retail notes are subordinated (meaning they have a lower priority relative to other debt) and unsecured. Investors purchase retail notes from a broker or from the issuer, which is usually a large corporation.


To retire, in terms of employment, is to leave a job, either to seek another job, or to stop working entirely. In terms of debt, to retire is to pay off or fulfill a debt obligation.

Returned or "bounced" check charge

Returned or "bounced" check charge is a fee charged to an accountholder when the bank returns a check unpaid because the account balance was not high enough to cover the check amount.

Reverse-annuity mortgage

Reverse-annuity mortgage is a type of real estate property loan that provides a stream of income payments to an elderly homeowner. These income payments are guaranteed until the borrower passes away. Debt repayments are not required until the borrower no longer lives in the home; at that time, the lender gains ownership of the home and sells it to recover the funds borrowed.

Revocable beneficiary

A revocable beneficiary is a designated person who will receive a payout from an insurance policy, and who does't have to consent to being removed from the policy. With a revocable beneficiary, the policyholder has the option to replace the designated person if circumstances change. This differs from an irrevocable beneficiary policy, which requires the beneficiary's permission for any changes made to the policy beneficiary.

Revocable trust

Revocable trust is a legal entity created to hold assets that allows the grantor of the trust to make changes to certain trust provisions. Income generated by trust assets are usually distributed to the grantor during her lifetime; after the grantor passes away, the assets are distributed to the trust beneficiaries.


Revolver describes a credit card holder who doesn't pay off the full balance outstanding at the end of each billing cycle. The majority of credit card holders are revolvers, because they allow some of the debt to roll over into the next billing period.

Revolving line of credit

Revolving line of credit is a debt instrument that allows the borrower to re-borrow amounts after they've been repaid. The lender approves the borrower for a certain debt limit, then allows the borrower to borrow (up to the limit), pay down, and borrow again until maturity. At maturity, the outstanding balance must be repaid, or the line of credit must be renewed.

RHS Loan

RHS loan is a debt that's either originated by the Rural Housing Service (RHS) through the United States Department of Agriculture (USDA), or guaranteed by RHS and the USDA. RHS is an agency of the USDA. The agency manages many programs, including some designed to support homeownership in rural areas. The term RHS loan can refer to any one of several RHS loan or mortgage loan programs.


Rich describes someone who has great wealth. The term can also be used to refer to the class of people who have great wealth. More generally, rich can describe something that has a large supply of something else, as in "Avocados are rich in nutrients."


Rider is an add-on option in an insurance policy, that's used to provide the insured with an extra type of coverage that would otherwise not be included in the policy.

Right of recourse

Right of recourse is a lender's privilege to pursue recovery of an unpaid debt through legal channels.

Right to use vacation interval option

Right to use vacation interval option is a type of timeshare ownership. The timeshare owner has the right to stay at the resort for a certain number of weeks per year, for a specified number of years. Alternatively, the owner may have a certain number of points, which can be exchanged for stays of a specified length. The timeshare owner doesn't stay in the same unit every time.


Risk is the danger of experiencing loss or harm. Risk is a primary concept in both insurance and in investing. Insurance companies set premium levels based on estimated risk of loss. Investors choose their securities positions based, in part, on the level of risk that they can tolerate.

Risk discount

Risk discount is the reduction in yield an investor accepts in return for reduced risk. As an example, an investor may voluntarily choose to purchase a government bond that yields 4 percent, rather than a corporate bond that yields 5 percent. The decision to take the lower yield (or risk discount) reflects the investor's preference for virtually risk-free government bonds versus low-risk corporate bonds.

Risk tolerance

Risk tolerance is an investor's capacity to accept declines in the value of her investment portfolio. An investor with a low risk tolerance accepts lower returns for the security of knowing that the portfolio won't suffer drastic decreases in value. An investor with a high risk tolerance is willing to take more chances in the hopes of a higher return.

Risk-based mortgage pricing

Risk-based mortgage pricing is the practice of offering lower-rate mortgage loans to more creditworthy borrowers, and higher-rate mortgage loans to less creditworthy borrowers.

Roll over

Roll over is a type of loan that gives the borrower the option of renewing the debt at the maturity date.



Rollover mortgage

Rollover mortgage is an intermediate-term debt secured by real estate. The rollover mortgage has a fixed rate, but the loan expires in three to five years without fully amortizing. At maturity, the mortgage is renewed at the then-current interest rate.

Roth 401(k)

Roth 401(k) is an employer-sponsored retirement savings plan that combines elements of a traditional 401(k) and a Roth IRA. As with the Roth IRA, contributions are made with after-tax money, but withdrawals and investment gains are tax-free. Notably, the Roth 401(k) has no income limitations, so anyone can contribute up to the specified limit, regardless of income.

Roth conversion

Roth conversion is the process of transferring assets from a Traditional, SEP, or SIMPLE IRA into a Roth IRA. There may be tax consequences associated with a Roth conversion.

Roth IRA

A Roth IRA is a type of tax-advantaged retirement savings account available in the U.S. Contributions to a Roth IRA are made with after-tax money, but earnings and qualified withdrawals are tax-free. Qualified withdrawals can't be made until the account has been open for five years and the accountholder reaches aged 59 1/2. Roth IRAs are subject to annual contribution limits and income limitations.

Routing Transit Number - RTN

Routing transit number, or RTN, is a nine-digit identification code used by U.S. banks. The RTN is printed on checks and facilitates clearing and processing.

Royalty income

Royalty income is fees paid for the right to use another's property, right, or artistic creation. Royalty income is usually paid as a percentage of sales. A product inventor, for example, might contract with a manufacturer to receive 2 percent of the sales revenue every time the manufacturer sells one of the inventor's products.

Rule of 72

Rule of 72 is a means of estimating how many years it will take to double an investment that's earning a certain interest rate. To make the calculation, divide the compound interest rate by 72. A 10 percent interest rate, for example, will double an investment in 7.2 years.

Rule of 78

Rule of 78 is a means of calculating an interest rebate on a prepaid installment loan where the interest is added to the loan balance upfront. The number 78 comes from the sum of 1 through 12, for the months of the year. If the borrower pays the loan after one month, the borrower will be charged 12/78 of the interest and refunded the rest. If prepayment occurs after two months, the charge will be 23/78, with the 23 representing 12 plus 11.

Rule of 78s


Running yield

Running yield is a portfolio's return divided by the portfolio's market value, expressed as a percentage.

