- the principal part of a loan, i.e. the original amount borrowed.
capital and interest
- otherwise known as a repayment loan. The borrower pays an amount
each month to cover the amount borrowed or principal and the interest
charged on that.
- When you remortgage, (change your mortgage but stay in the same
property) your new loan pays off the existing/outstanding mortgage
but MAY leave a surplus at the disposal of the borrower.
If the surplus is to be used for home improvements (i.e. increase
the value of the property) then some lenders do not regard this
as capital raising. See also remortgage.
- the mortgage interest rate will not exceed a specified value during
a certain period of time, but it will fluctuate up and down below
Some capped products will have a ceiling and a floor between which
the rate payable may move, such loans may be known as cap and collar
- an incentive payment made by the lender to the borrower upon completion
of a mortgage.
Consumer Credit Act (CCA) - the principal legislation covering the
provision of loans to individuals. First charge mortgages are now
regulated by the FSA and no longer fall within the remit of the
Consumer Credit Act.
A regulated loan is a loan not exceeding £25,000 and would
hence not include a mortgage loan over £25,000. For this reason
many lenders set a minimum loan of £25,001 to ensure it is
not treated as a regulated loan.
County Court Judgment - (CCJ) - judgment for debt in the county
court. If a judgment is settled in full within 30 days of the date
of the judgment it will not appear in the credit register. In the
event of a payment after that date the judgment will appear in the
register but will be shown as being satisfied.
If a judgment has not been settled and is outstanding this is likely
to lead to a lender's refusing a mortgage application. In fact applications
are still likely to be declined if satisfied judgments are shown.
A small number of lenders will offer loans when a judgment has been
satisfied if the amount involved is small.
- generic term applied to mortgage lenders, other than building
societies and high street banks, who generally do not have retail
outlets and operate wholly from a head office location.
- The Council of Mortgage Lenders publishes various booklets on
buying property to protect the borrowers.
- shared ownership - method of property purchase in partnership
with a Housing Association. The borrower purchases part of the property
and rents the remainder from the Housing Association.
Also known as co-ownership, this arrangement is designed for people
who could not otherwise become homeowners.
Under most arrangements, the minimum purchase amount is 25% of
the property value with the remainder available to be purchased
in blocks of 25%.
- a loan granted for a commercial purpose, normally secured against
commercial property, although residential property may be used.
Usually carries a higher rate of interest than a residential mortgage
because the lender perceives a higher degree of risk.
- the point at which the legal formalities of a property purchase
or mortgage are finalised and the funds are drawn down from the
lender, normally into the solicitor's account.
In the case of a purchase, the purchasers should not be allowed
to take occupation until after completion has taken place.
- an insurance policy that has to be taken out as a condition of
obtaining a loan. Normally conditional insurances must be taken
out via the lender's agency so that they benefit from any resultant
- the insurance of property within your home i.e. furniture, clothing,
personal possessions etc. as distinct from the buildings insurance.
Whilst lenders will be keen to offer contents insurance to borrowers,
it is not essential that you should have it. Cover is normally provided
for insurance of fire, a full range of perils (e.g. water damage)
and theft. Some policies offer a wider, all-risks wording.
Contents policies normally cover goods within the home, although
most will extend to include small amounts of cover outside the home,
possibly upon payment of an additional premium.
- In order to limit their liabilities in respect of redundancy payments
and to have greater control over staffing costs many employers now
offer employment under fixed-term contracts without the right to
continued employment at the end of the term.
- a self contained flat that has been converted out of part of a
- fee charge by a solicitor or licensed conveyancer for arranging
the necessary legal work in transferring the ownership of a property.
The total cost of the legal work also includes profit
cost, stamp duty, land registry
fees and disbursements.
- enquiry made on the credit history of an applicant,
normally by reference to one of the major credit agencies such as
Equifax, CCN or Westcott Data.
- method of loan assessment carried out by scoring the various answers
given on a loan application.
Almost all loan applications are credit scored and as a result
it becomes essential for all questions on any application to be
fully completed Missing answers on an application will normally
result in the maximum negative score being allocated to that question.
- the lender's standard terms and conditions for acceptable loan
applications. These vary from mortgage to mortgage.
current service (employment)
- length of time that you have spent with your current employer.