Amortisation
Amortisation is the process by which a loan, such as a mortgage, is gradually eliminated through regularly scheduled payments that cover the interest and a portion of the principal. Also, the schedule of such loan repayment. more about amortisation
Annual Percentage Rate
The annual equivalent rate of return on a loan or investment in which the rate of interest specified is chargeable or payable more frequently than annually. Most investment institutions are now required by law to specify the APR when the interest intervals are more frequent than annual. Similarly those Credit cards that advertise monthly rates of interest (say two per cent) mistake equivalent APR.
Annuity
A contract in which a person pays a premium to an insurance company, usually in one lump sum, and in return receives periodic payments For an agreed period or for the rest of his or her life (life annuity). An annuity has been described as the opposite of a life assurance as the policyholder pays that the lump sum and be insurer makes the regular payments. Annuities are often purchased at a time of prosperity to convert capital into an income during old age. Other terms used can contain annuity certain; deferred annuity.
- Annuity certain -an annuity in which payments continue to race a specified period irrespective of the life or death of the person covered. In general annuities cease on the death of the policy holder unless they are annuities certain.
- Life annuity - an annuity then ceases to be paid and the death of a specified person which may or may not be the end the annuity holder.
Balloon Mortgage
A mortgage in which some of the original principle and some interest is still outstanding at the end of the mortgage agreement period; it is also called a non amortising mortgage. With a balloon mortgage a lump sum has to be repaid at the end of the term to cover the remaining debt.
Balloon - a larger sum repaid as any regular instalment of a loan repayments
Balloon loans - balloon Loans are those in which repayments are not made in a regular manner but are made, as funds' become available, in balloons
Bank Of England
the central bank of the UK. It was established in 1694 as a private bank by London merchants in order to lend money to the state and to deal with the national debt. It came under public ownership in 1946 of with the passing of the Bank of England Act. The Bank of England axe as their governments and bank, providing loans through ways and means advances and arranging borrowing through the issue of gilt-edged securities. The bank helps it to implement the Government's financial and monetary policy as directed by the Treasury. It also has wide statutory powers and to supervise the banking system, including the commercial banks and to which, through the discount market, it acts as a lender of last resort, the Labour government gave the Bank of England the power to set up base interest rate.
The bank Charter Act 1844 divided and the bank into an issue department and a Banking Department. The EC department is responsible for the issue of bank notes and coins as supplied by the Royal Mint. The banking department provides banking services (including accounts) s to commercial banks, foreign banks, all the central banks, and government departments. The bank manages their national debt, acting as Registrar of government stocks. It also administers exchange control, when in force, and manages the Exchange equalisation Account. The bar and his controlled by a governor, deputy-Governor, and a court ( Board) off 16 directors, appointed by the Crown for periods off 4-5 years.
Bankruptcy
The state of an individual who isn't able to pay his or her debts and against whom a bankruptcy order has been made by a court. Such orders deprived bankruptcy of their property, which is then used it to pay their debts. Bankruptcy proceedings are started by a petition, which may be presented to the court by...
- Creditor or creditors
- A person affected by a voluntary arrangement to pay debts settled by the debtor under the Insolvency Act 1986
- The Director of Public Prosecutions
- The debtor
The grounds for a creditor's petition are that the debtor appears to be unable to pay his or her debts or to have reasonable prospects of doing so ie that the debtor has failed to make arrangements to pay their debt for which a statutory demand has been made all that a judgment debt has not been satisfied.
Cheap money (easy money)
A monetary policy of keeping interest rates at a low level. And this is normally done to encourage an expansion in the level of economic activity by reducing the cost of borrowing and investment. It was used in the 1930s to help recovery after the Depression and during World War Two to reduce the cost of government borrowing.
Collateralised mortgage obligation (CMO)
A US bond secured by a portfolio of mortgages and offering a fixed redemption date.
Compound interest
Compound Interest is when interest is added to the principal, so fromthe start of the term, the interest that has been added earns interest its self.
Debt Collection Agency
An organisation that specialises in collecting their outstanding debts off its clients, charging at commission for doing so. Because of the historical stigma attached to the phrase " debt collection" these agencies preferred now to be called commercial collection agencies.
Commercial Mortgage
Commercial Mortgage loans can be secured against company assets or property, and range from a relatively short period to many years. Commercial loans in the form of a commercial mortgages can receive up to 85% of the property LTV.
Another form of commercial loan is the Buy-to-Let Mortgage designed for landlords used by nearly everyone.
Repayment mortgage
With a repayment mortgage your monthly repayments contribute to both the capital borrowed to buy your property, as well as the interest.
As long as all your repayments are made in full and on time, your mortgage will be paid by the end of the term.