|
Collateral
Assets used as security for a lease/loan.
Debt Consolidation is combining debt from different financial institutions or products into one loan.
Default is the failure to carry out the terms
of a contract.
Fixed
Rate
Predetermined,
nonadjusting rate of interest applied to the principal balance of a
loan.
Freehold
The buyer of a Freehold property owns both
the property and the land it stands on indefinitely. See also
Leasehold.
Leasehold
The buyer of a Leasehold property owns the property for a
set number of years, but doesn't own the land on which it stands.
See also Freehold.
Interest Only mortgages
With this method the initial loan amount remains the same
throughout the term of the loan, while the monthly mortgage
repayments only pay off the interest being charged on this
amount.
LIBOR
(London Interbank Offered Rate)
Rate that the most creditworthy
international banks dealing in Eurodollars charge each other for
loans.
Loan-to-Value
The difference between the actual loan amount funded to
the borrower and the value of collateral received as security for
the loan.
Refinancing
Paying off one loan with the proceeds from
another.
Security
Collateral or other items used to secure a transaction
through a financial institution.
Self
Build
This is a
mortgage for property under construction. The loan is paid out in
stages as the property is completed, in order to ensure the LTV does
not rise too high at any point.
Stamp
Duty
This is a
government tax charged on properties with a purchase price in excess
of £175,000. Properties are charged 1% from £175,000 to £250,000, 3%
from £250,001 to £500,000 and 4% above £500,000. It is not payable
on remortgages.
Standard Variable Rate (SVR)
This is a variable rate determined entirely at each
Lender's discretion. Unless linked to Libor or the Bank of England
Base Rate, the SVR is the reverting rate at the end of any special
offer period, such as a Capped, Discounted or Fixed rate.
Working Capital
Cash available for daily business operations.
Variable Rate
A transaction with an interest rate that may fluctuate.
The rate is often tied to an index that reflects changes in market
rates of
interest. |
