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cap and
collar
- see
capped rate
capital
- 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.
There are two main types of capital & interest mortgage,
constant net payment and gross profile.
capital raising
- When you remortgage, (change your mortgage but
stay in the same property) your new loan pays off the existing/outstanding
mortgage but leaves 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. Payments made as cashbacks may be treated as gifts and subject
to capital gains tax.
CCA
Consumer Credit Act (CCA) - the principal legislation covering the
provision of loans to individuals.
A regulated loan is a loan not exceeding £15,000 and would hence not include
a mortgage loan over £15,000. For this reason many lenders set a minimum
loan of £15,001 to ensure it is not treated as a regulated loan.
CCJ
County Court Judgement - (CCJ) - judgement for debt in the county court. If
a judgement is settled in full within 30 days of the date of the judgement
it will not appear in the credit register. In the event of a payment after
that date the judgement will appear in the register but will be shown as
being satisfied.
If a judgement 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 judgements are shown. A small
number of lenders will offer loans when a judgement 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.
CML
- The Council of Mortgage Lenders publishes various booklets on buying
property to protect the borrowers.
co-ownership
- 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.
completion
- 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.
constant
net payment
- a form of capital and interest repayment mortgage where the monthly
repayments to the lender remain the same throughout the mortgage term.
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.
criteria
- 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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C
cap and collar
capital
capital and
interest
capital raising
capped rate
cash back
CCA
CCJ
centralised
lender
clearing bank
CML
co-ownership
commercial mortgage
completion
conditional
insurance
constarnt net payment
Consumer Credit Act (CCA)
contents
insurance
contract work
converted flat
conveyancing fee
Council of Mortgage
Lenders (CML)
County Court
Judgement (CCJ)
credit check
credit scoring
criteria
(mortgage)
current service
(employment)
Introduction
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