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Mortgage glossary listings for C

cap and collar
- see capped rate

- 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.

capital raising
- 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.

capped rates
- the mortgage interest rate will not exceed a specified value during a certain period of time, but it will fluctuate up and down below that level.

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 mortgages.

cash back
- 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.

centralised lender
- 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.

clearing bank
- see bank.

- 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%.

commercial mortgage
- 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.

conditional insurance
- 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 commission.

contents insurance
- 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.

contract work
- 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.

converted flat
- a self contained flat that has been converted out of part of a larger property.

conveyancing fee
- 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.

credit check
- 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.

credit scoring
- 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.





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