Loans Questions R-Z

Loans questions Listed R to Z as follows:

R :: S :: V

R

(Capped) Rate

Usually for a set number of months/years where the interest rate can go up and down but there is a maximum (capped) interest rate which it can not go above.

(Variable) Rate

A rate of interest which may vary up or down during the lifetime of a loan. The circumstances causing any change are outlined in the loan conditions.

Remortgage

Loan taken out by a borrower to replace another one secured on the same property. Typically taken out by borrowers switching lenders to achieve a better rate.

Representatives

Local representatives (Reps) who are available, if required, to pay home visits to help and advise in the completion of loan applications.

Repayment Mortgage

With a repayment mortgage you pay part interest and part capital repayments to the lender each month and in this way the capital that you borrowed is reduced until the loan is repaid.

Retention

Sum of money retained from a mortgage pending completion of improvements or repairs as stipulated by the Valuer.

Redemption Penalties

Charges paid to the lender in compensation for lost interest if you redeem your loan ahead of schedule. Penalties can be a fixed sum of money, though are often proportion of the loan.

Redemption statement

The outstanding amount to be repaid on an existing loan.

Redundancy insurance

A form of income protection that does not cover any form of sickness, injury or disability. The purpose of this type of policy is to replace income lost through a short to medium term period of redundancy. It provides you with a monthly tax-free income to cover a portion of your lost earnings. It is often sold in conjunction with the accident, sickness and disability element of income protection policies, in which case it is known as Accident, Sickness and Unemployment (ASU).

Reinstatement value

The cost of rebuilding your home should it be destroyed.

Remaining balance

The amount of unpaid principal on a home loan.

Remaining term

The original loan term minus the number of payments made.

Remortgage Loan

Taken out by a borrower to replace a mortgage secured on the same property, in order to free up capital. Often taken out with a different lender to achieve a better interest rate.

Remortgage

The process of switching your mortgage loan from one lender to another without necessarily moving house.

Repayment Mortgage

With a repayment mortgage you pay part interest and part capital repayments to the lender each month and in this way the capital that you borrowed is reduced until the loan is repaid.

Repayment period

The period over which the borrower must repay the lender.

Repayment plan

When a borrower falls behind in loan payments, many lenders will negotiate a repayment plan rather than go to court.

Repayment term

The period of time over which you will repay your mortgage to the lender.

Repo rate

The Bank of England base rate.

Repossession

Usually occurs after a borrower seriously defaults on payments. The lender then legally evicts the borrower and usually auctions the property to recover losses.

Representatives

Local representatives who are available on request for face-to-face consultation to answer any questions or queries you might have.

Restructured loan

A loan in which new terms are negotiated.

Retail Price Index

An index of the average level of prices in the UK . Insurance companies often link contents insurance policies to it.

Retention

Sum of money retained by the lender from a mortgage advance until improvements or repairs are completed as stipulated by the Valuer.

Retrieval cost

The cost incurred to recover amounts or items.

Review of rate

The interest rate you are charged can be reviewed either annually or on a monthly basis. This feature does not affect fixed rate loans during the fixed period.

RTB

A term associated with legislation that gives council house tenants the Right to Buy their homes.

S

Salary

The money you receive from your employment. Commission, overtime and bonuses are not normally considered as part of your gross income by the lender, unless you receive them at a guaranteed level.

Sealing Fee

A charge made by lenders when a mortgage is paid off.

Security

This represents whatever (usually a property) is offered in default of payment on your loan.

Security address

This is the address (property) that is offered as security (see above) to the loan provider. The better the security the better the terns for the loan - e.g. better APR.

Secured card

A type of credit card which requires a deposit be made in order to acquire a loan.

Security

An alternative term for collateral (see above).

Security

Property or other equity used as collateral in order to guarantee a loan.

Security

Also referred to as collateral, security is the term used to describe assets or property put up as security for a loan. The lender will be entitled to reclaim the assets as compensation if repayments are not kept up.

Secured

This type of loan requires property or collateral to be put up against the loan. This collateral will then be at risk if payments are not kept up as agreed.

Settlement Figure

The sum quoted in order for a loan to be fully repaid on a date earlier that the contracted term.

Self - Certified

Lenders that operate this type of scheme allow the applicant to confirm how much they earn by "Self-certifying" their income. Schemes are available to both employed and self employed applicants. Typically for the employed, the schemes are designed to help those applicants with incomes that incorporate a large element of bonus or where they derive income from a number of jobs. Where as for self employed there is no need for full 3 years audited accounts to be provided.

Self-employed

A person who operates as a sole trader or as part of a partnership.

SERPS

State Earnings-Related Pension Scheme.

Single Insurance

Generally, single insurance offers protection against sickness, accident and redundancy for the main wage earner.

Stamp Duty

A tax paid on the purchase of properties costing more than £60,000.

Standard Security

The equivalent of the Legal Charge in Scotland .

Status

The credit-worthiness of a potential borrower.

Structural Survey

A detailed survey of the structure of a building carried out by a Structural Engineer or Chartered Building Surveyor.

Subject to Status

Dependent on an applicant's credit history.

Sub-prime Mortgage

A mortgage granted to a person who is unable to borrow money secured on a property from a high street lender due to a poor credit rating, arrears on another mortgage or inability to prove a satisfactory level of income.

Status

Simply refers to your credit worthiness.

Single Insurance

Policies vary from lender to lender. Generally single insurance offers protection against sickness, accident and redundancy for the main wage earner. Cover is also available for self employed borrowers. Details of the specific insurance plan will accompany the lenders offer. EasyLoans strongly recommend that you consider some form of insurance protection , especially in the case of secured loans and mortgages.

Stamp Duty

A tax (currently 1%) paid on the purchase of properties costing more than £60,000.

Standard Security

The equivalent of the Legal Charge in Scotland .

Structural Survey

A detailed survey of the structure of a building carried out by a Structural Engineer or Chartered Building Surveyor. Surveyors are liable for negligence.

Sub-prime Mortgage

Mortgage granted to a person who is unable to borrow money secured on a property from a normal lending source. The reasons the applicant may not be granted a mortgage by a high street lender, could fall into one of three categories:-

Adverse Credit information registered against them Existing arrears on current mortgage facilities An inability to satisfactorily prove the level of income required by a high street lender.

 

V

Valuation Inspection

of a property for mortgage purposes.

Variable Rate

A rate of interest which may go up or down during the lifetime of a loan.

Valuation

A brief inspection of a property for mortgage purposes. Whilst it is for the lenders use it is often paid for by the loan applicant.

Valuation fee

A fee paid by a borrower to cover the cost of the Valuation Report.

Variable interest rate

A type of interest rate that is subject to fluctuation and change (either higher or lower than the initial percentage) due to market forces.

Verification of deposit

As part of the loan process, a lender will ask a borrower's bank to sign a statement verifying the borrower's account balances and history.

Verification of employment

As part of the loan process, a lender will ask the borrower's employer for confirmation of the borrower's position and salary.