The Glossary
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
The
Letter D
This
section provides information on terms and phrases beginning with
the letter D
At the grabber we know finance is full of
confusing terms and phrases, and so on this page we explain:
Debit Cards
|
Debt Consolidation |
Debt Management Services |
Defaults |
Deposit |
Discounted Rate Mortgage
Debit cards take money directly from the holders bank account.
Debit cards are not credit cards but are an alternative to cash
or writing a cheque. Linked to your bank account, debit cards
often also work in cash machines and as a cheque guarantee card.
When using a debit card for a purchase money will be shown
withdrawn from your account in a few days.
Switch and Visa operate these schemes for the banks. Generally
using these cards do not cost extra as they come with your
account although this could be dependant on you remaining in
credit.
The Grabber has a section on
consumer credit for those interested.
Debt consolidation is the term used to describe placing all
existing debts and arrears together and arranging fresh finance
to clear or repay them, which then leaves only the latest
finance left to be repaid. Debt consolidation or simply
consolidation as it is may be referred to, is currently one of
the finance industries large growth areas, companies charge
customers varying amounts to manage debts, contact creditors,
arranging loans and then using the finance to pay of the
outstanding debt. Companies that offer this debt consolidation
service generally make their profits from the money saved by
offering creditors an early settlement to any debt owed and from
arranging and collecting repayments on the new loan.
Visitors don't have to pay debt consolidation companies for this
service it is possible to arrange a loan and consolidate your
debt yourself.
The Grabber has a section on
consolidation for visitors interested in the process, or we
have
application forms for those wanting to apply for loans to
consolidate with.
Debt management services are agents or companies used by people
with debt repayment problems or those seeking to reduce the
financial burden upon them from debts. They are often used by
customers seeking to consolidate their debts.
If you have many debts and are frequently receiving notices from
lenders, there could be a genuine need to deal with your debts
and the creditors before the situation gets beyond your control.
This is especially so if you have assets, or some of the finance
is secured. When in such a situation you either need to deal
with your creditors yourself, or get someone to do it for you.
Debt management companies deal with many of the mentioned
scenarios every day, and thus are experienced and knowledgeable
in how to deal with any mixture of debts. They work by
contacting your creditors to arrange reduced payments perhaps in
return for longer terms. They should be able to help you come up
with a budget plan to assist you make your payments on time and
if there are problems contact the lenders on your behalf. And if
you are consolidating debt should be able to assist you applying
for loans and clearing your debts.
The term defaults is used to describe late or even missed
payments that are due on any financial products taken out. If
the borrower stays behind and thus in arrears on their
repayments and ignores the lenders attempts at contact, they are
likely to end up with a CCJ against them. The CCJ will adversely
affect any further attempts to gain finance, and could lead to
them being turn down on any further applications because of the
problem rating. Defaults on mortgages or finance secured on
property may mean that property is in danger of being
repossessed, sold and the money used to pay off any arrears owed
to the lenders. Defaults can also be described as current
outstanding arrears.
If you are finding difficulty with repayments contact the lender
of the finance product immediately, this can reduce the charges
for defaults and working together a repayment schedule could be
arranged. This would be tailored to your current ability to pay
and thus reduce the possibility of creating further defaults.
Most finance lenders have departments or sections that can
assist customers with this as arrears and defaults are part of
all financial life.
The deposit is the advance made on the purchase of a property
and is also a factor in the size of the mortgage required by the
buyer. How this works is very straight forward, if you have
saved 15% of a properties value as a deposit you will then
require a mortgage for 85% to cover the remaining cost. The size
of the deposit the buyer should be looking to provide is about
10% of the properties value, this figure should then enable
buyers to avoid some of the steeper charges involved in property
buying. Plus lenders should be more inclined to grant mortgages
when a larger deposit is present.
There are 100% mortgages available for those who want them, but
generally lenders prefer to grant these to buyers with perfect
credit ratings. The main expense of choosing these one hundred
per cent mortgages is the extra interest charged on the mortgage
and the larger mortgage indemnity guarantee premium (MIG)
required. On mortgages over 95% of a properties value the MIG
premium is usually quite substantial.
When buying property as well as the mortgage and deposit, there
are other legal costs to take into consideration when buying
property and these can easily be over looked when saving up, the
Grabber has a
mortgage section for those interested.
A discounted rate mortgage is a mortgage product which offers a
safety incentive to the customer. This means the interest that
is charged on the mortgage is at the standard variable base rate
and is applied to the mortgage, less the pre-arranged discount
for a set period.
This means the interest rate and the monthly mortgage repayments
will go up or down depending on the base rate changes minus the
discount. This gives the holder of the mortgage a level of
security over their repayments as they will not be paying
interest at the premium level. This safety will remain in place
until the end of the discounted rate period. The period usually
attributed to discounted rate mortgages is about two years but
it could be more which is dependant on the mortgage lender.
These discounted rate mortgages tend to lock the holder into the
mortgage for a minimum limited period and usually include a
penalty clause if they try to swap lenders, which can increase
the cost of re-mortgaging.
For those visitors interested in
property re-mortgaging the Grabber has a section on it.
Got a piece of jargon you want explaining, it's time to let The Grabber loose.
Associated Pages
discount
rate mortgage |
discounted rate mortgage
|
