Accrual rate

Rate at which pension benefits grow within an Occupational Pension Scheme for each year in service. Usually expressed as a fraction of final salary.

APR

Annual percentage rate. This figure is provided so you can compare the true cost of borrowing between different loan products. This rate takes into account all the costs, interest charges and arrangement fees and allows you to compare credit facilities on a like for like basis.

Advance

Amount of money being lent under the loan agreement.

Adverse Credit

Credit or a loan that has not been paid well by the borrower in accordance with either a loan or credit agreement.

Annuity

This is a series of regular payments that you receive for the rest of your life, in exchange for a lump sum /pension fund that you have built up over your working life.

Arrears

Payments on a loan or credit agreement which have been missed or are over 30days due. When mortgage payments have not been paid on time and/or are not made at the correct amount, borrowers are said to be in arrears.

AVC

Additional Voluntary Contributions - the contributions you pay as a member of an Occupational Pension Scheme, to that scheme, over and above the normal contribution level in order to purchase additional retirement benefits.

Base rate

Interest rate set by the Bank of England, used to determine borrowing and savings rates across the UK.

Broker

A company which searches a range of lenders for available loan products and matches against the borrowers circumstances. A broker introduces a borrower to a lender who is able to help with the loan that is required.

CCA

Consumer Credit Act - UK legislation which sets the rules for the way in which banks and other lenders lend money to members of the public.

Consolidation Loan

A loan taken out to pay off all your debts. A consolidation loan is a loan which is used to pay off all or a majority of your existing credit which may comprise of secured loans, unsecured loans, car loans, and credit cards or store cards.

A consolidation loan is often used to reduce the amount of interest you pay by having your various pieces of credit with separate companies, paid off and having a lower interest rate on one larger loan.

This also gives the benefit in most cases of a reduced monthly outgoings amount which means you have more free income each month, and it is much easier to have just one payment rather than 7 or 8 separate ones for example.

Cooling off period - Consideration Period

Amount of time given by law to allow a borrower time to consider a loan offer made to them, in which time the borrower is able to cancel their application if they so wish.

Credit Rating

A term used to assess a borrower's credit worthiness based on their previous repayment history.

Credit Scoring

Used by many banks and high street lenders to associate a number to certain elements of a loan application and credit search which added together give what is known as a credit score. In order for the borrower to be approved by the lender for a loan, they must reach a set score that the particular lender requires as a minimum.

CCJ's - County Court Judgements

A county court judgement is registered against a person or company who owes money to another. Where the person who owes to money has been unable to or refused to pay and the person who is owed to money has gone to court to recover the debt.

Default

If a borrower goes into payment arrears, they have defaulted on their credit or loan agreement. It is known as an account in 'default' if the lender has issued a 'notice of default' to the borrower. This is usually the stage before a county court judgement is applied for, and often seen as a 'final demand' for payment.

Deeds Case

Where a property is owned outright and there is no mortgage remaining or any other secured loans owing, which are by way of a security against the property.

Equity

The difference between the amount of money secured on a property in the way of a mortgage, and the current value of that property.

Fixed rate

A rate of interest which is fixed for the entire term of the loan or mortgage for a specific period from the date when the loan is taken out. Fixed rates are more common on mortgage products.

Hedging

A strategy used to protect against risks involved in investments. High-lending fee (mortgage indemnity guarantee). An extra charge made by lenders on loans that are more than 90% of the value of a property.

Leasehold

If you buy a property that is leasehold it means that you own the property but not the land the property is on.

Loan Advance

Amount of money being lent under the loan agreement.

LTV - Loan To Value

Similar to the equity calculation, but also includes the loan advance amount. The mortgage balance is added to the loan advance, then divided by the property value to give the LTV. Eg. £65,000 mortgage balance + £10,000 loan advance = £75,000 divided by property value of £135,000 = a LTV of 56%

The closer the margin is between the two values will mean a higher LTV %. Most lenders will only offer loans up to 95% LTV, however we have high LTV up to 125% which means you can apply for a secured loan even if you do not have equity available in your property.

Negative Equity

This is where your mortgage balance is higher than the current value of your property. Because we have loan products available that mean you are able to use more than 100% of your property value; we are able to help in most cases.

Non Status

This is a term usually associated with mortgage companies who are not a recognised and well known high street lender, and the mortgage products they offer are classed as non status mortgages or loans.

RTB - Right To Buy

This is the term used when a council tenant is able to buy the property they live in from the council, or have already done so in the past. The purchaser will have a discount from the council and be able to buy at a value less than its current sale value.

Redemption Penalty

Most lenders charge a redemption penalty when a loan or other finance agreement is settled early. The amount of the penalty varies between lenders, and is usually calculated in a number of months interest forward, that you would have paid if you had chosen not to settle the loan.

Remortgage

This is when you switch your mortgage from your current lender to another one. You take out a new mortgage to repay your current one. You may be able to get a better rate that saves you money.

Secured Loan

I loan secured on property by way of a legal charge until all Moines owing on the loan agreement are paid in full. Secured loans are lower risk for lenders so rates a much lower than unsecured loans.

Self Declaration - Self Certified Income

This is used when a person or persons cannot provide proof of how much they earn. It is mainly used in instances of people who are self employed, sole traders, or even partnerships or directors of limited companies can not provide accounts, proof of earning, or it is difficult to assess, or in cases where a person does not have an accountant.

Settlement Figure

This is an amount that is calculated by a lender in accordance with the terms of the consumer credit act which is the amount required for you to pay in order for you to settle your loan in full. All lenders must send you this promptly following you making a request to them.

Shared Ownership

A shared ownership property means you own a certain percentage of it, and another person or company owns the remaining percentage which could be more or less than the percentage of the property you own or have a mortgage on. Shared ownership properties are usually owned partly by a housing association, and partly by you.

Sub - Prime

This term is associated with lenders who offer finance to people who have had credit problems in the past. An example of a sub - prime lender would be Welcome Finance. We are able to consolidate Welcome finance loans and in most cases greatly reduce the interest that you are currently paying.

Variable Rate

As the term suggests, a variable rate of interest means the rate can go up or down in relation to the Bank of England base rate. Slight increases or decreases in the Bank of England base rate will not normally effect your loan payments. Lenders use variable rate agreements as a safeguard in case the Bank of England base rate increases by large amount.