Washington State Department of Financial Institutions

Glossary of Terms

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Department of Veterans Affairs (VA) - a federal agency that guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.

Variable Rate - Interest rate that changes periodically in relation to an index.

Variable-Rate Loan - A loan plan where the interest charged, over the life of the loan, may vary in accordance with an index that is readily verifiable by the borrower and beyond the control of the lender.

Variable-Rate Mortgage - A mortgage with an interest rate that fluctuates during the life of the mortgage.

Volatility - The degree to which a security varies in price. In general, the more volatile a mutual fund or stock, the more risk is involved.