APR
Annual Percentage Rate - The APR is a measure of the cost
of credit, expressed as a yearly rate. This reflects the annual
cost of the loan over the repayment period. The Annual Percentage
Rate includes specific costs of financing, both those paid
at the time of borrowing and those paid over the term of the
loan.
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Assurance
- Life
A specific type of life insurance
policy that can be linked with a mortgage or loan. A percentage
of the premium goes toward insuring your life, and would
pay off the loan in the event of your death. The rest is
invested and would pay you a lump sum at the end of the
term.
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Assurance
- Level Term
Life assurance that pays out
a lump sum if you should die during the term. This is suitable
for interest only loans as the amount owed on the loan remains
the same throughout the period of the loan.
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Cashback
Type of loan where the borrower
is given back a sum of money (usually a percentage of the
loan). Commonly used by lenders as an incentive to promote
their products.
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CCJ
County Court Judgement. A court
order against a debtor to pay money owed.
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IFA
Independent Financial Advisor.
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Insurance
Term
A life insurance policy that
is often linked with a mortgage or loan. The premium goes
towards insuring your life, and will pay off the loan in
the event of your death.
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Lender
The actual company that provides
the finance to meet with a request for a loan or mortgage.
Loan
- Secured
The equity in the property is
used as security against the loan not being repaid.
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Loan
- Unsecured
The credit rating or financial
position of the applicant is such that no security for the
loan is required.
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Rate
- Capped
Usually a rate for a set number
of months/years where the interest rate can go up and down
but there is a maximum (capped) interest rate which it can
not go above.
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Representatives
Local representatives (Reps)
who are available, if required, to pay home visits to give
help and advice in the completion of loan applications.
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Security
Address
When taking a secured loan or
mortgage, the security address is the address of the property
which is being offered as collateral for the loan. Where
property is offered as security in this way, lenders are
generally prepared to offer more flexible terms and lower
interest rates.
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Status
The credit-worthiness or otherwise
of a potential borrower.
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Term
Period of a loan expressed in
months or years.
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Underwriting
The process by which the ability
of a prospective borrower to repay a loan is assessed (this
is also the name of the department that undertakes this
work). The process takes into account various factors including
employment history, financial status, previous credit history
and current earnings.
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