A to Z of Finance (Jargon Buster) - The Letter C
The world of Finance is full of buzz words and Jargon. In this section I'll translate a whole range of finance terms so you won't get caught out.
Index A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Capped Rate Mortgages
A Capped Rate Mortgage has an interest rate that is set for anything from a few months to several years. This means that if the interest rate went up above the set limit (the cap) you wouldn't pay any more then the pre set capped rate with a Capped Rate Mortgage. Unlike a fixed rate mortgage, a capped rate would mean your interest rate could go down should the base rate fall. The lenders make their money by locking you into a capped rate mortgage for a minimum limited period and they may include a penalty clause if you try to swap.
Capital and Interest Mortgage
More commonly known as a repayment mortgage, this means your monthly mortgage repayments to your lender would go towards paying off the capital as well as the interest your lender charges you.
Cash Back
This is a marketing incentive offered to try to make you take out a providers cash back mortgage. A lump sum of money, (usually a £1000) is given to the borrower i.e. cash back, when they take out the cash back mortgage. The cash back offer could be a set figure or a percentage of the overall mortgage. The money back can be used to fund the deposit or be used for immediate home improvements. You should be aware that in reality you could be paying the 'cash back' over the years, depending on the mortgage interest rate you are paying.
CCJ or County Court Judgment
If you have not made payments for some time on a debt you have, then you may be taken to a Crown Court where if the debt isn't satisfied, then a decision or judgment will be made against you for the non-payment of that debt. The County Court Judgement will be registered on your credit file as a CCJ. If the debt is paid or satisfied and a satisfaction certificate obtained it will also be noted on your credit file.
Completion
The final stage of the mortgage process and the day you get the keys, you become the new legal owner of the property you are buying.
Consolidation or Debt Consolidation
To consolidate your debts means to bring together all of your debts, instead of struggling to make several unaffordable repayments, you open one more single loan in order to pay off all those outstanding debts, this would mean that you would have just the one, more manageable, monthly repayment to make. You could arrange the new loan at a more affordable rate for your circumstances.
Conveyancing
The legal process of transferring ownership of the property. A conveyancer, usually a solicitor, would deal with the contracts and property searches.
Credit Check
Before lenders grant you credit they will undertake a credit check. A credit check determines your credit history whether you have any CCJ's, defaults or outstanding credit card bills. Your credit history is held on a credit reference database and lenders can examine these databases at any time. It is the lender who decides whether or not they will lend to you and they decide this by examining your credit history. Most high street lenders will not grant finance to anyone with a poor credit history but Finance Jungle believes you should be given the chance of your own home or that loan you need no matter what your credit status.
Credit Scoring
This process is used by some lenders to determine what level of credit risk you are. Lenders use a scoring system based on your credit history to determine if you have good or bad credit history. The length of time you have been at your current address, security, employment, income etc are all examined. Mainstream lenders prefer to grant finance to people with good credit rating scores. Our Independent Financial Advisors could find credit to suit your poor credit score. The majority of your credit history will be kept on a national credit database, lenders can access this database whenever they wish, it is up to individual lenders whether the risk is acceptable.
