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guide | Mortgage glossary
- example of the monthly cost of a mortgage and other expenses associated
with the loan such as set-up costs.
- inducements such as cashbacks offered to borrowers to persuade
them to take out a loan with a lender.
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- A way of holding cash deposits and investments in stock and shares
in a tax privileged way. ISA's are intended to build upon the experience
of PEP's and TESSA's. The Government have stated that ISA's will
be available for a minimum of ten years. ISA's have been available
since April 1999.
- introduced under the Insolvency Act 1986 with the intention of
allowing an individual to avoid bankruptcy and make maximum possible
restitution to creditors. An IVA is seen as preferable to bankruptcy
as the debtor can retain his tools of trade and, in the case of
a professional person, continue to practice, or hold company directorships.
IVAs can be set up for either a person or a company. An Insolvency
Practitioner petitions the High Court for protection for a borrower
debtor under an IVA. A proposal is put to the creditors of whom
75% must accept. If this is achieved, the arrangement becomes binding
upon debtor and all creditors named in the agreement. If the debtor
fails to meet payments under an IVA the Insolvency Practitioner
is likely to petition for the individual to be made bankrupt. Whilst
bankruptcy normally lasts for only three years some creditors insist
that IVAs last a longer period.
- the payment of interest to cover the period between the date of
completion and the normal date from which an interest payment is
due. For example if mortgage payments are normally due on the 30th
of a month and the loan completes on 14th March, the first monthly
payment may be due one month from 30th March, on 30th April. Any
interest due for the period from completion until 29th March will
be due with the initial mortgage payment. Thus, the borrower's first
mortgage payment will normally comprise one full month's payment
plus the initial interest.
- interest rate that is payable from the commencement of the loan.
Many mortgage products, e.g. fixed and discount, have an initial
rate of interest which will change at the end of the initial period.
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- interest only mortgage - loan for which only payments of interest
are paid to the lender during the term of the loan. All mortgages
other than capital and interest repayment loans are a form of interest
only loan. Some lenders will allow loans to be set up without any
specific provision to repay the capital at the end of the period
this is known as a pure interest only loan.
- person who introduces a loan to a lender.
- income received from investments. This could be from rental income
on investment property, dividends on equities or interest on deposits
with financial institutions.
- additional income over basic salary that is of an erratic nature;
additional payments to which the employee may be entitled but which
are not received on a regular basis.
- individual voluntary arrangement (IVA) - introduced under the
Insolvency Act 1986 with the intention of allowing an individual
to avoid bankruptcy and make maximum possible restitution to creditors.
An IVA is seen as preferable to bankruptcy as the debtor can retain
his tools of trade and, in the case of a professional person, continue
to practice, or hold company directorships. IVAs can be set up for
either a person or a company. An Insolvency Practitioner petitions
the High Court for protection for a borrower debtor under an IVA.
A proposal is put to the creditors of whom 75% must accept. If this
is achieved, the arrangement becomes binding upon debtor and all
creditors named in the agreement. If the debtor fails to meet payments
under an IVA the Insolvency Practitioner is likely to petition for
the individual to be made bankrupt. Whilst bankruptcy normally lasts
for only three years some creditors insist that IVAs last a longer
period.
Courtesy of UKMortgageangels.co.uk
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