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Finance - Financial




Financial jargon

A

APR- Annual Percentage Rate- Total amount of interest charged on a loan or mortgage.

ARRANGEMENT FEE- The amount payable to a mortgage lender charged on a loan or mortgage.

ASU- ACCIDENT, SICKNESS OR UNEMPLOYMENT- An insurance taken to cover your mortgage payments.

ANNUITY- When a life insurance company makes regular payments to you for the rest of your life, in exchange for a cash lump sum or your accumulated pension fund

b

BANKERS DRAFT- A guaranteed payment arranged through a bank.

BLUE CHIP STOCK - Shares in a large company listed on the FTSE 100

BOOKING FEE- Administrative fee charged by the lender on application.

BUILDINGS INSURANCE- Cover taken out to cover the costs of rebuilding or making structure repairs to the building.

BUY TO LET- type of property that is taken out to buy a property that will be rented out to others

C

CAPITAL AND INTEREST MORTGAGE-(Repayment Mortgage)

CAPPED RATE MORTGAGE- A variable rate mortgage where interest rates may fluctuate. But can never go higher than the maximum (capped) rate.

CASH BACK- An amount paid back to you when you take out a loan or mortgage, either a fixed sum or a percentage of the total amount

CCJ (County Court Judgment)- A court order taken out against a borrower who has defaulted on credit payments.

COMPLETION-When the sale and process of a property has been finalized and the ownership of the house is transferred to the buyer.

CONCLUSION OF MISSIVES- (Term in Scotland), meaning a type of exchange of contracts.

CONTENTS INSURANCE- Covers the value of possessions and items in the event of a fire or theft.

CONTRACTS- Legal contract between the buyer and the owner (vender) of a property.

CONVEYANCING- The legal process concerning the sale of a property.

CREDIT SCORE- An assessment made by the lender to evaluate the level of risk you pose as a borrower

CREDIT SEARCH- A search carried out by a credit reference agency to check your credit record, whether you have a CCJ, a history of not paying loans or defaulting and not paying credit cards on time.

CRITICAL ILLNESS COVER- An illness, where a lump sum is paid out if you are diagnosed with a critical illness.

DAILY INTEREST- Interest rates calculated on a daily basis.

DEBT CONSOLIDATION LOAN- To consolidate current debt to another arrangement.

DEPOSIT- The amount of money you pay the bank or building society towards a mortgage.

DEPRECATION- The decrease in value of the purchase amount on a car or property.

DISCOUNT RATE- The reduction of a rate of interest for a fixed term.

DIVIDEND- Money paid to shareholders associated to the companies profits.

E

EARLY REDEMPTION FEE- What the mortgage lender charges you, if the agreement is re-paid or is switched to another lender before the agreed term.

ENDOWMENT MORTGAGE- An interest only mortgage and a endowment policy which will be paid as a lump sum when the policy matures.

EQUITY- The value of the property minus any money still owed on it.

EXCHANGE OF CONTRACTS- When the buyer and the vendor sign identical contracts agreeing to terms..

F

FIRST TIME BUYER- Taking out a mortgage for the first time.

FIXED RATE LOAN OR MORTGAGE- The interest remains the same through out an agreed time.

FLEXIBLE MORTGAGE- Paying over the agreed amount or under the amount without charges.

FREEHOLD- When the land of the property is owned by the owner.

FUND MANAGER- Someone who invests on behalf of the client on investment schemes.

G

GAZUMPING- When a higher offer is made to the seller after a price has been agreed.

GROSS INTEREST- The figure of interest before any deductions.

GROUND RENT- What the leaseholder pays to the freeholder.

H

HOME INSURANCE- To insure your home, for instance building insurance that would mean the outside of your home.

HOME BUYERS REPORT- A check on the structure of the building carried out by a professional surveyor.

HP- (Hire Purchase)- In effect a hire of an item for a fixed period of time, until the contracted period ends.

IFA- (Independent Financial Advisor) A consultant who gives independent financial advice..

INCOME MULTIPLIERS- The amount of money you can borrow from a lender based on your income.

IVA- (Individual Voluntary Arrangement) (or IVA for short) is a formal, legally binding solution to personal debt problems.

LIFE INSURANCE-A total sum is paid independents when the named policy holder dies.

LOYALTY BONUS- Existing mortgage holders receive deductions on interest rates and other benefits.

M

MORTGAGE- A loan from a provider to purchase property, where the property is used to guarantee payment of the mortgage.

MORTGAGE RATE- The rate of interest the lender charges reflecting on the general rate the Bank of England sets and can change up or down,

MORTGAGEE-The company giving the loan.

N

NATIONAL INSURANCE- A tax paid from wages to finance state benefits.

NEGATIVE EQUITY- When the value of a property is worth less than money owed on the mortgage.

NO CLAIMS BONUS- When a policy holder of insurance doesn't claim ( especially prevalent on car insurance).

P

PAYE- (PAY AS YOU EARN)- When deductions are automatically taken from wages or income and paid directly to the Inland Revenue.

PERSONAL LOAN- A loan for Individual persons on fixed repayments and interest rates are fixed.

R

REMORTGAGE- A mortgage taken out when the mortgage or doesn't move home.

REPAYMENT MORTGAGE- When the outstanding capital or any interest is paid on a monthly basis.

S

SEARCHES- A number of checks made during the purchase of a property with local authorities for any matter that mat effect the value of the home, such as planning.

SECOND CHARGE- Secured loans are secured against property which already has a mortgage

on it - so, the mortgage is the first charge and the loan is the second charge.

SECURED LOAN- When the loan is secured on an asset, (such as property) to guarantee payment of the loan.

STAMP DUTY- Paid by a purchaser of a property.

T

TITLE DEEDS- Documentation of proof of ownership of a property.

TERM- The length of time that the loan or mortgage is to be repaid.

TITLE DEEDS- Proof of ownership documentation.

TRANSFER DEEDS-Documentation to transfer proof of ownership.

U

UNSECURED LOAN- A loan when no security is needed to guarantee payment.

V

VALUATION- A surveyor employed to check the value of a property and check value.

VARIABLE RATE- Interest rates on a loan or mortgage can fluctuate.

VENDOR- The person or persons selling the property.

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