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A Message from AmeriFirst Bank
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Safe Deposit Boxes

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Protect your important papers, records, and valuables from fire, theft, or accidental loss. The renter of the box pays the bank a fee for the use of the box on an annual basis. The box can only be opened with production of the assigned key for that box, the bank’s guard key, the proper signature, or perhaps a code.
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Customer Service

Glossary of Terms

Adjustable Rate Mortgage (ARM)
A mortgage loan that allows the lender to adjust the interest rate periodically to reflect changes in market conditions. Your mortgage payments may adjust up or down as the interest rate changes, in accordance with a stated index and with pre-determined limits (or caps). (Also known as Variable Rate Mortgages.)

Amortization
The repayment of a mortgage loan with periodic payments of principal and interest, at the end of a fixed period of time.

Annual Percentage Rate (APR)
The interest rate that reflects the actual cost of credit on a yearly basis expressed as a percentage. Because the APR may include points and other costs associated with the loan, it more accurately reflects what you'll be paying, and allows you to compare different mortgages based on actual costs.

Annual Percentage Yield (APY)
The interest rate that reflects the actual interest earned on a yearly basis expressed as a percentage.

Appraisal
An estimate of the fair market value of a home made by a professional appraiser.

Automated Clearinghouse (ACH)
A computer-based clearing and settlement operation, often operated by a Federal Reserve Bank, established for the exchange of electronic transactions among participating depository institutions. Such electronic transactions can be substituted for paper checks used to make recurring payments, such as payroll checks, loan payments, insurance premiums, etc.

ATM (Automated Teller Machine)
Machines that allow the user to perform various banking transactions, including withdrawals and deposits.

Automatic Transfer Service (ATS)
An arrangement which allows funds to be transferred from a depositor's checking account or statement savings account to the same depositor's checking account to cover a check written and avoid overdraft.

Caps
Percentage restrictions on an adjustable rate mortgage that limits the amount the interest rate may change per year and over the life of the loan.

Certificate of Deposit (CD)
A deposit account that cannot be withdrawn from before a specified maturity date without being subject to an interest penalty for early withdrawal.

Closed-end Credit
Any loan in which the funds borrowed, plus any finance charges, are expected to be repaid in full over a definite time.

Closing Costs
Fees paid at a mortgage closing. Fees may vary, but some examples include title insurance, attorney fees, appraisal fees, recording fees and taxes.

Collateral
Property that is used to secure a loan or other credit and that becomes subject to seizure on default. (Also called security.)

Cosigner
Another person who signs for a loan and assumes equal liability for it.

Debit Card
A card that resembles a credit or ATM card, but which debits a transaction account (checking account) with the transfers occurring simultaneously with the customer's purchase. Generally, a debit card may be used at specified automated payment terminals, such as retail stores and gas stations, or at an ATM.

Direct Deposit
A method of payment, which electronically credits your checking, or savings account; most commonly, payroll and government checks.

Electronic Fund Transfer System (EFTS)
A variety of systems and technologies for transferring funds electronically rather than by check. Includes Fedwire, ACH and other automated systems.

Equity
The value of your home after the outstanding balance of any loans is subtracted. For example, if the borrower's home is worth $100,000 and the borrower owes $60,000 on the mortgage loan secured by the home, the borrower's equity is $40,000, or 40% equity in the home.

Escrow Account
An account established with a mortgage lender in which a portion of the monthly mortgage payment funds is held to pay for taxes and insurance when they become due.

Federal Deposit Insurance Corporation (FDIC)
Agency of the federal government that insures accounts at most commercial banks and mutual savings banks. The FDIC also has primary federal supervisory authority over insured state banks that are not members of the Federal Reserve System.

Fixed Rate Mortgage
A mortgage with an interest rate that stays the same for the life of the loan.

Good Faith Estimate
A document provided at application that provides estimates of all costs associated with obtaining and closing a mortgage loan.

Interest
The amount the lender charges to lend you money, or the amount the depository institution pays you for funds you keep on deposit.

IRA (Individual Retirement Account)
A personal retirement account, which allows the individual to defer taxes on earnings until withdrawn. Also, certain contributions may be tax deductible in the tax year for which they are made.

Lien
An encumbrance on property that acts as security for the payment of a debt.

Mortgage Insurance
Insurance that protects the lender if the homebuyer defaults on the mortgage payments. Typically, Private Mortgage Insurance (PMI) policies are required if your down payment is less than 20% of the purchase price of the home.

Open-End Credit
A line of credit that may be used repeatedly up to a certain limit.

Origination Fee
The fee charged by a lender to prepare all the documents associated with your mortgage.

POS (Point of Sale)
Terminals that allow you to pay for retail purchases with your debit card.

Points
Prepaid interest on your mortgage, charged by the lender at the time of closing, that allows the borrower to obtain a lower interest rate. Each point equals one percent of the loan amount.

Pre-Approval
A conditional commitment by a lender based on all standard documentation except a property appraisal and title search.

Pre-Qualification
A process in which the loan officer calculates the housing-to-income ratio and the total debt-to-income ratio to determine an approximate maximum loan amount.

Principal
The amount borrowed, not including interest.

Transaction Account
An account which allows transfers to third parties, such as a checking account or negotiable order of withdrawal (NOW) account at a bank or other depository institution.

Treasury Bills
Short-term U.S. Treasury security usually issued in minimum denominations of $10,000 and usually having original maturities of 3, 6 or 12 months. Investors purchase bills at prices lower than the face value of the bills; the return to the investors is the difference between the price paid and the amount received when the bills are sold or when they mature. Treasury Bills are the type of security used most frequently in open market operations.

Truth-in-Lending Disclosure
Federal law requires that the lender must provide this document to the homebuyer within three business days after loan application. This disclosure gives details of the mortgage payments along with the corresponding APR and finance charges.

Truth-in-Savings
You will be provided a T.I.S. Disclosure Statement every time you open a new account, in conjunction with the maturity notice on certain certificates of deposit, and upon request for any existing account.

Variable Rate
An interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. Limits (or caps) are often placed on the level to which the interest rates can vary.

Wire Transfer
Electronic transfer of funds.