Archive for the ‘Definitions’ Category

Discounted mortgages

July 8th, 2010

Discounted mortgages are mortgages that offer a very low interest rate for the first couple of years that they are taken out than the standard variable rate, to which they revert.

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What are bridging loans?

June 3rd, 2010

Bridging loans are loans that are used by a home owner who has bought one house and has not yet sold another.  These can be reasonably expensive and, as their name implies, they are intended to be a temporary loan.
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How does a redemption penalty affect a decision to change a mortgage?

May 31st, 2010

Redemption, or early payment, penalties are often charged on low interest or fixed rate loans, and they can often make the difference between whether or not a home owner should move their mortgage.

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What is a sub prime mortgage?

May 27th, 2010

A sub prime mortgage is a term that has come over from America.  Essentially it means a borrower who is unlikely to get a home loan at a high street bank. The term sub-Prime developed from the way in which American banks divided potential borrowers according to how likely they were to repay their debt.

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What are mortgage guarantees?

May 27th, 2010

A mortgage guarantee is when a parent, or someone else, guarantees a home loan or some other type of borrowing.  This can mean that a person who would not normally be able to get a property can then be able to buy. A mortgage guarantee works by having the home owner being the main person to pay the mortgage, and being responsible for the loan.  When the mortgage is paid off they will own the house.  However if they default, and before the bank moves to put the house on to the market, then the guarantors will be asked to pay the loan.

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