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The Glossary
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I
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The
Letter I
This
section provides information on terms and phrases beginning with
the letter I
At the grabber we know finance is full of
confusing terms and phrases, and so on this page we explain:
Independent
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Interest-only Mortgage |
Investment |
ISA
Mortgages
Independents are agents that are not attached to a specific
finance product or provider. So independent agents have a larger
pool of finance products to choose from when trying to get their
customers a highly competitive deal. Independent agents should
also observe some key principles when carrying out their
business.
The independent agent should ask for sufficient information to
be in a position to form a comprehensive view of the customers
needs. The independent agent should then select products from
the market, or from a panel of companies believed to be the best
in the market. The independent agent should be in a position to
offer the best advice, both on the products selected and the
customers needs and ability to pay. Independent agents are
obliged to give customers full details of any commission they
receive on the policies and investments they recommend as well
as the level of charges.
The Grabbers application forms go to FSA regulated independent
brokers. If you have doubts about an independent agents
authorisation, go to the
Financial Services Authority's firm check service and
you will be able to see whether the adviser is registered.
Independent financial adviser's as well as tied agents are
regulated by the Financial Services Authority. If an adviser is
not, they are trading illegally.
If you are after finance you could apply using the Grabbers
application forms and save yourself hours surfing online.
An interest only mortgage works in the same way as an endowment
mortgage works, the mortgage holder only repays on the interest
and not on the capital of the mortgage.
If you have a interest only mortgage, you will pay off the
interest on the mortgage in monthly payments for a fixed term,
terms are usually five to seven years. Then after this term you
either refinance, pay of the balance remaining with a lump sum,
or start to pay off the principal loan, in which case your
payments can jump sky high.
If you are a UK resident and after property information or want
to apply for a mortgage the Grabber has a
mortgage section.
Investment in property is using capital in the housing market
rather than the stock market. Home investment is a term which
covers the performing of renovation work or improvement of a
home, increasing its value.
Investment in property can be a complicated subject to cover
because of the myriad of different ways to invest in property
and because of the investors aims, that is what you want out of
property investing.
You may be looking at buying to let, this is buying a property
with the purpose of letting it out. Perhaps property
redevelopment interests you, this is buying a building in need
of maintenance and modernising with the intention of selling it
later to make a profit. Because of the stock markets recent
sluggish performance you may be looking at other ways to use
your finance, such as buying a second home or buying a holiday
home. You may be a home owner looking at improving your
properties value, performing work on the building could lead to
an increase of thousands on its market value.
If you are interested in property investment the Grabber has a
investment section in our property pages.
An ISA mortgage works loosely in the same way as endowment
mortgages and interest only mortgages work, the mortgage holder
only repays on the interest and not on the capital of the
mortgage. ISA stands for individual savings account.
With an ISA mortgage you will be expected to repay the interest
on the loan monthly, you then take out the ISA to build up a
fund which will pay back the capital at the end of the mortgage
term. An ISA comes with tax benefits too as the savings that you
accumulate are free from income tax or capital gains tax. Your
investment could grow quite rapidly resulting in you being able
to pay off your mortgage earlier than you had first hoped for.
There are two types of ISA, a maxi and a mini. The government
will allow you to put £7000 a year into an ISA used to back up a
mortgage.
The Maxi ISA is usually a stock market account and is more
likely to generate the money to pay off the capital on your
mortgage. You are allowed one maxi and up to three mini ISA’s.
ISA’s can be viewed as cheap when the stock market has fallen,
because you have to pay less for the units that you are funding.
However you should consider the fact that any sort of interest
only mortgage carries more risks than the traditional repayment
mortgage. An ISA is a form of interest only mortgage, relying
heavily on the stock market and you are not guaranteed to make
enough funds to pay off your mortgage.
If you are after property information or want to apply for a mortgage the Grabber has a
mortgage section.
Got a piece of jargon you want explaining, it's time to let The Grabber loose.
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