Financial Services
Welcome to The Economic Voice financial services resources page. Here you will find links and telephone numbers that will help you get the advice you need regarding your financial services requirements. We will be updating this page on a regular basis as our offering expands.
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Stocks, Shares and Forex:
Insurance – Find out which type of cover is most suitable for your circumstances:
- Life Insurance, Mortgage Protection and Critical Illness Cover
- Private Medical Insurance
- Income, Mortgage and Loan Protection (ASU)
- The Bespoke Financial Practice – freephone 0800 86 205 86
Debt Services – Sleepless nights? Worried about your debt?:
Claims – Make your claim here:
Mortgage – Choose the best deal for your circumstances:
- The Bespoke Financial Practice – freephone 0800 86 205 86
Loans – Both home-owners and tenants welcome:
Investments
- The Bespoke Financial Practice – freephone 0800 86 205 86
Identity Fraud Protection
Mortgage Glossary of terms
Agreement in principle: A pre-offer indication to a seller that you have access to mortgage funding.
Annual percentage rate (APR): The interest rate used by all mortgage lenders that enables you to compare rates. This should be stated on any quote you receive from a bank, broker or IFA.
Base rate: This is the interest rate set by the Bank of England and used by mortgage lenders to set their rates.
Buy to let (BTL): A type of mortgage taken out by people who want to build a let property portfolio.
Capped-rate mortgage:The mortgage interest rate cannot go above a certain level, even if mortgage rates rise, but can fall down as rates drop. A redemption penalty usually applies if you wish to change mortgage in the capped period.
Capital and interest mortgage: See Repayment Mortgage.
Cash back: The ‘reward’ paid by the lender for taking out a mortgage, usually a percentage of the loan.
Completion: The term used for when the buyer and seller exchange money and keys via solicitors and the buyer becomes the legal owner of the property.
Compulsory insurance: Some lenders require you to take out house, and possibly contents, insurance with them as a condition of the mortgage deal. This is becoming less common, but be wary of it as the insurance will be more expensive than on the open market. This can make the mortgage deal uncompetitive.
Contract: Under English Law this is a written agreement drawn up by the solicitors that sets out the terms agreed between the buyer and the seller. When contracts are exchanged the deal becomes legally binding and a 10% deposit is paid, with the balance following on completion. Under Scottish Law missives are exchanged and completed after the initial unqualified offer is followed by unqualified acceptance.
Conveyancing: This is the legal process of transferring ownership from the seller to the buyer.
Credit Check: A lender will make sure you are credit worthy prior to lending you the money for a mortgage by conducting a credit check with one of the credit referencing agencies (Equifax, Experian or Callcredit).
Current account mortgage: A type of mortgage in which your mortgage debt is effectively held in your current account. Interest due is calculated daily as opposed to yearly, which can make a significant difference to the cost for those on a repayment mortgage. It is more flexible and allows both under-and overpayments to suit the borrower’s changing financial circumstances.
Debt consolidation: A means of pooling all your different debts (eg: credit card, loan, store card) so that you are only borrowing the total debt from one lender. Remortgaging can be an effective way of achieving this as mortgage lenders usually offer the lowest interest rates compared to other finance companies.
Default: This is when you do not make your mortgage payments. If you default on your mortgage, ultimately your home will get repossessed by your lender and sold.
Discount-rate mortgage: A mortgage with a guaranteed percentage reduction in the standard variable mortgage rate (eg: 1.5% below the standard variable rate). These have an agreed fixed period and if you change mortgage within that time, you will likely have pay a redemption penalty.
Endowment: A life assurance policy with a savings and investment element, typically sold as the investment vehicle to repay an interest-only mortgage.
Equity: The bit of your house that you own. It is the difference between the market value of the property and the amount you still owe to your lender.
Fixed-rate mortgage: The interest rate on the mortgage is fixed at a set level for an agreed number of years. If you change your mortgage before the end of that period and you will likely have to pay a redemption penalty.
Flexible mortgage: This is a mortgage deal that allows the borrower to overpay and underpay as their circumstances change. Can be used effectively by the self employed or contractor but requires a certain level of self control. A current account mortgage normally has these features.
Interest-only mortgage: The mortgage payments to the lender are made up simply of interest. You do not pay off any of the capital of the mortgage during the term of the mortgage. The borrower also pays into an investment vehicle, historically endowments, but increasingly ISAs and pensions are being used. The idea is that the investment vehicle will have performed well enough to repay the capital by the end of the mortgage term. The FSA considers this a riskier option than the repayment option.
Legal charge: This is the claim that your lender has over your home until you have paid off your mortgage. In Scotlandthis is known as a standard security.
Local Authority search fee: This is a fee paid by your solicitor to the Local Authority to check if there are any proposed developments (eg: housing estates, roads) in the area around your new home. The Local Authority also checks to see if any enforcement notices have been served on the property for violation of building or planning regulations.
MIG: See Mortgage Indemnity Guarantee.
Mortgage: A loan to buy a home, where the property is the security against you paying back the loan. Mortgages offer by far the best long-term interest rates of any loan because they are seen as very low risk for the lender.
Mortgage indemnity guarantee: If you borrow more than 75% of the value of your house, you may well get hit with one of these. It insures the lender against you being unable to pay and your house being repossessed. Although the borrower pays for this insurance policy it only protects the lender, if the insurance company pays the lender the insurance company will then come after the borrower for the money!
Mortgage term: The period in years to repay the mortgage.
Negative equity: This occurs when the housing market suffers a drop in prices. If you bought a house for £100,000 and now it is only worth £80,000, this equates £20,000 of negative equity. This becomes especially bad when the amount owed on the mortgage is greater than the market value, as even if the house is sold there will still be an outstanding sum owed to the mortgage lender.
Redemption penalty: If you leave certain types of mortgage (eg: fixed rate, capped) early, you will be charged by the lender for doing so. Signing up for a mortgage that has redemption penalties should be avoided wherever possible, especially where the redemption period is longer than the fixed/capped period. They are sometimes known as Redemption Charges or Settlement Fees.
Remortgage: This is when you move your mortgage to another lender. You may be able to get a better deal, but be wary of redemption penalties. It is also worth checking to see if your current lender can give you a better deal before going to the extra trouble and expense of moving to another.
Repayment mortgage:Also know as a Capital & Interest mortgage as the monthly repayments pay off both the interest and some of the capital on the mortgage. By the end of the mortgage term, the debt has all gone and the house is all yours.
Repossession: If you default on your mortgage, your lender will repossess your home and sell it to get their money back.
Right to buy: Council tenants living in council property are allowed to buy the house, with a substantial discount, once they have been living in a property for longer than a set period, usually 3 years. This may be being phased out in certain areas of the country shortly.
Stamp duty (Stamp Duty Land Tax-SDLT): This is a tax that is to be paid on the purchase of property by the buyer. Stamp duty (a more technical term is Land Value Stamp Duty) is set by the government and changes regularly. Check the latest rates with your broker or lender.
Stepped-rate mortgages: Like a discount mortgage except the interest rate goes up in stages rather than in one fell swoop.
