part & part
- a generic phrase referring to a loan, part of which is interest
only (i.e. the capital never declines) with the remaining part being
repaid as under capital & interest arrangement. The capital remaining
at the end of the mortgage term would normally be expected to be repaid
from a proceeds of a life policy or investment. See also: part
endowment.
part endowment
- a mortgage that is arranged partly on an endowment basis, the
balance of the loan most commonly being arranged on a capital and
interest basis.
payment method
- means by which the mortgage capital is eventually repaid. e.g.
endowment plan, tax free cash sum from pension.
payment protection insurance
- see ASU accident, sickness and unemployment insurance. and unemployment
insurance.
payment schedule
- schedule of monthly payments under a loan.
pension
- annuity payable on a regular basis (normally to a retired person).
pension mortgage
- an interest-only mortgage where the capital will be repaid from
the tax free cash sum that can be received from the pension fund
at maturity.
period
- the length of time for which, or end date until, the initial interest
rate applies.
personal equity plan
- An investment in shares, unit trusts or investment trusts where
all the proceeds are currently free of income and capital gains
tax. Depending on the lender, you can use PEP's to repay an interest
only mortgage. The Government announced in 1997 their intention
to launch Individual Saving Accounts (ISA's) from April 1999 to
build upon the experience of PEP's and TESSA's. Existing PEP's were
allowed to continue after April 1999 but you were not allowed to
put any more money into them.
personal pension
- Established under the Social Security Act 1986, personal pensions
allow individuals to make their own provision for an income in retirement.
Tax relief is allowable on the contributions at the investor's highest
marginal tax rate. Investments grow free of all taxes to create
a fund to be used at retirement to purchase an annuity. Up to 25%
of the fund may be taken as tax free cash and the balance must be
used to purchase an annuity. Alternatively, from July 1995 the balance
may be used in an income withdrawal annuity arrangement.
portable
- describes a mortgage that can be transferred from one property
to another. This most commonly applies to loans in the category
of Treasury product.
postcode
- an alphanumeric code defined by the post office which can identify
properties to a location of within a handful of dwellings. Since
their introduction postcodes have been used for a number of other
purposes including assessing premiums for household insurance.
postcode area
- the first one or two letters of the first part of the postcode.
e.g. B for Birmingham, TW for Twickenham.
previous lender's reference
- reference from a lender who has previously lent money to a prospective
borrower regarding the conduct of the loan account.
principal
- the original amount of the loan, the capital.
product
- is a mortgage product offered by a lender.
professional
- person who is a member of a recognised profession, such as a doctor
or solicitor. The definition of a professional can vary substantially
from lender to lender with occupations such as banker being accepted
as a profession by some but rejected by others. Many professions
are disqualified from practising if they become bankrupt.
profit cost
- that part of a solicitor's bill which covers his or her own time
and profit.
profit
- gross profit - profit of a company before allowing for the expenses
of running the business. This is not a reliable measure of a company's
ability to provide income as not all of the gross profit will be
available to the owners for distribution.
net profit -net profit - the income of a company or self employed
business after making full allowance for the expenses of running
the business (and, in the case of a limited company, corporation
tax.) This should be the amount available to the owners of the business
for their own benefit and consequently is the figure that can be
used to calculate their ability to service a mortgage.
profit related pay
- PRP -Introduced under the Finance Act No 2 1987, PRP schemes are
sponsored by employers and allow employees to receive some of their
pay (the lower of 20% of their pay or £4,000) tax free provided
that payments are linked to the profitability of the employer. Rules
governing PRP schemes are defined when the scheme was set up and
individual scheme rules should be available to employees.
property construction
- method of construction, see sub menu.
purpose built flat
- flat designed and built as such; a self contained residential
unit contained within a larger structure containing several self
contained units or flats all sharing a common entrance.
