Jargon Buster O, P, and R Offer of advance The formal offer of a mortgage from a lender. Offset mortgages Your main current account, savings account or both are linked to your mortgage. Each month, the amount in these accounts is offset against your outstanding mortgage before working out the interest you owe. You are unlikely to earn interest on your savings which are offset against your mortgage. On risk The point at which your policy comes into effect. Policy holder The policy holder is the owner of the policy and responsible for paying the premiums. The sum assured will be paid to the policy holder unless other arrangements are made. Portabality Your mortgage broker or lender will be able to tell you if your mortgage is portable or not. A portable mortgage may enable you to transfer borrowing from one property to another, sometimes to avoid additional fees or keep a specific discounted rate. Provider The company providing the cover i.e. life asurance or buildings and contents. Redemption Paying off a mortgage. Remortgage If you are looking to change your mortgage to a different deal, but youre not looking to move home then you are remortgaging. Renewable premiums Where the premium is subject to review and potential increase over the term of the policy. Renewable Term Assurance A term assurance of life assurance policy that contains an option, which can be exercised at the end of term, to renew the policy for the same sum assured without further medical evidence. Repayment mortgage With this type of mortgage (also known as capital and interest) you repay part of the amount borrowed together with the interest being charged each month. In the earlier years, the majority of your monthly repayment is made up of interest, however towards the latter part of your mortgage term the situation is reversed with the majority of your monthly payment reducing the amount borrowed. Reservation fees This is a front end charge levied by several home lenders. The idea is youre asked to pay the fee (typically £100 to £300) to secure the funds you are intending to borrow. It is sometimes described as an administration or booking fee.
Posted on: Wed, 28 May 2014 07:25:14 +0000
Trending Topics
Recently Viewed Topics
© 2015