A to Z of Finance (Jargon Buster) - The Letter E
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
Early Redemption Fee
This is often associated with fixed, capped or cash-back mortgages. If you pay off your mortgage early, want to change lenders or wish to change morgage products, then you may be charged a fee to do so. The lender may give you a package with benefits but you must keep the mortgage with them for a minimum length of time. Some mortgages don't have any early redemption penalties.
Endowment
An Endowment Mortgage is a savings based mortgage with life assurance. Part of your repayment goes towards paying off the interest charged and the rest is invested by the lender. These mortgages were designed to allow you to pay a smaller monthly premium. At the end of the policy your invested amount should should have grown sufficient funds to pay off the balance of your mortgage. However current Endowment Mortgage Policy Holders have been informed that the final invested amount is unlikely to cover the final balance of their mortgage.
Equity
This is the difference between the amount you owe on your current mortgage and the current value of your property. A remortgage can be arranged to relaease the equity sum in a property and this cash can then be used for whatever you wish.
Exchange of Contracts
When solicitors of buyers and sellers exchange contracts both parties are then legally bound to the sale and purchase of the property.
