Mortgage Glossary D - F
D
Daily Interest
Interest that is applied on a daily rather than the usual monthly basis.
Data Protection Act (1988)
A legal act introduced to protect the amount of personal data held and transferred between organisations.
Debt
Money owned by a lendee to a lender.
Debt Consolidation
A means by which a number of existing loans are replaced with a single loan from a lender.
This can reduce the monthly payments by increasing the length of the loan and reducing the interest rate.
Debt-To-Income Ratio
A calculation designed to establish if an applicant is qualified to receive a loan or a mortgage.
Deed
The document that proves who owns the property. It will also show any land boundaries.
Deed Of Covenant
A legal document detailing the terms of a covenant (a legally binding agreement) which can impose certain restrictions on the use of a domestic property such as using it for commercial use or sub-letting.
Deed Of Proxy
A legal document giving another person the authority to carry out financial and legal affairs of another.
Deeds Release Fee
An amount chaged by the lender for the release of the deeds of the property that was mortgaged when the mortgage has been repaid.
The deeds are returned either to the owner or his legal representative.
Default
A term used to describe when a payment or number of payments are not made.
Default Notice
A legal letter issued by the creditor to a borrower stating that a credit agreement has been breached. The letter will state that steps must be taken by the borrower to prevent the creditor pursuing the situation via a County Court Judgement.
Deferral Period
An amount of time when the borrower is not required to make any repayments.
Deferred Interest
A loan where all or some of the interest is added to the amount outstanding.
Delinquency
Failing to make payments at the agreed time.
Delinquent Loan
Failing to make payments at the agreed time with cause the loan to be termed a Delinquent Loan. If matters are not addressed within an agreed time period, the lender may pursue the matter through the courts.
Dependant
A person who depends financially on another.
Despatch Fee
An amount chaged by the lender for the release of the deeds of the property that was mortgaged when the mortgage has been repaid.
The deeds are returned either to the owner or his legal representative.
Direct Debit
A means of paying a debt automatically from a current account on a regular basis.
Direct Lenders
Lenders who use call centres, mailing houses or internet based systems to lower the cost of their overheads.
Disbursements
A collective term for various legal transactions that occur during conveyancing, for example stamp duty, land registration and search fees.
Discharged Bankrupt
An individual whose period of bankruptcy has finished.
Discharged CCJ
The technical term for when a County Court Judgement has been paid.
Disclaimer
A written statement discharging liability of a company or a person who may provide incorrect or inaccurate information in a document.
Discount Period
The time period during which reduced payments are offered.
Discount Purchase Price
A reduced property price to encourage sales.
If the property is re-sold within a time period, usually three years, some or maybe all of the discount will have to be repaid.
Discount Rate
The interest rate on a mortgage is lower than the current normal rate for a period of time.
E
Early Repayment Charge (ERC)
An amount charged if the borrower chooses to pay off the mortgage before the end of the agreed term.
Easement
A legal right of way which gives individuals, other than the owner, permission to use a property for a specified purpose.
Endowment mortgage
A mortgage with an endowment policy attached.
An endowment is an investment product whose purpose is to repay the mortgage at the end of the mortgage term.
Equity Release scheme
A means in which homeowners can raise some capital by freeing up some of the value of their homes in exchange for cash.
Estate agent
A professional who acts as a third party to sell or lease buildings or land on behalf of others.
F
Fee
An amount charged by a broker, lender or another third party involved in arranging a mortgage or purchase of a property.
Financial Adviser
A professional who aids individuals with finances.
First Charge
This is a legal used to secure the main mortgage. The lender who has the first legal charge over a property has the first call on any of the funds available from the sale of the property.
First Time Buyer
A lendee who is purchasing property for the first time. To encourage ongoing finanacial committment, some financial houses offer preferential lending terms to first time buyers.
Fixed Rates
A loan with interest rates set at a certain agreed percentage for a specified period of time.
Fixtures And Fittings
Items in the property, for example door handles, that are included in the purchase.
Flat Over Shop
A residential living space located above a shop.
These types of properties are usually classified as a lower investment, due to the location, and consequently it is sometimes harder to obtain a loan on these properties.
Flexi
Short for flexible.
Flexible mortgages mean that the borrower is allowed to make overpayments (payments larger than the agreed monthly amount) in order to repay the mortgage earlier than the agreed date.
Forbearance
A legal meaning action taken to delay legal issues or foreclosure with a defaulting borrower.
Foreclosure
The legal term for when a borrower defaults on a loan.
Foreign Currency Mortgage
A mortage taken out in the borrower's home country in a foreign currency.
Interest rates can vary from country to country so sometimes it is advantageous and sometimes it is better to take out a mortgage in the borrower's home country.
Forfeiture
A legal term meaning that a borrower surrenders their rights to the property.
Freehold
Owning property or land outright, is given the term freehold ownership.
FSA
Financial Services Authority.
The regulatory body for the financial service market.
Full Status
A loan including complete financial checks, credit history and income on a borrower.
Full Structural Survey
A complete comprehensive survey on a property to inform the purchaser of any problems or faults.