The Glossary

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The Letter R
This section provides information on terms and phrases beginning with the letter R
At the grabber we know finance is full of confusing terms and phrases, and so on this page we explain:
Redemption Penalties | Re-mortgage | Repayments | Repayment Mortgage | Right to Buy Mortgage

Redemption Penalties

Redemption penalties are a charge for repaying finance back early, that is before the term is expired. They are usually associated with mortgages or longer term loans. The lender agrees to lend some capital to the borrower for a set length of time. The repayments on this include calculations for interest, charges and arrangement fees. It is also worked out that the borrower is going to need a set number of months to pay it back.
The borrower on taking the credit agrees to make the repayments on time and to keep paying for the set term. If the borrower wants to pay off the debt early or seeks to change lenders they are breaking this agreement. They are also reducing the profit the lender was going to make on the agreement. To cover this a charge is made to cover for any lost costs and for the borrower breaking their agreement.

Re-mortgage

A re-mortgage means switching the existing mortgage on a property for a new cheaper deal, often to a different mortgage lender or company. Re-mortgaging can also be used to free up equity on a property to create finance to be used elsewhere. Most borrowers currently pay their mortgage providers standard variable rate mortgage, and this is never the best deal out there.
There is no reason to stop from switching mortgage lenders and re-mortgaging at a lower rate or for a more suitable deal. Potentially a lot of money can be saved by a home re mortgage. You could have a new mortgage on your existing home either the same size and have lower repayments or make it bigger and have funds for home improvements or a holiday.
For those visitors interested in property re-mortgaging the Grabber has a section on it.

Repayments

Repayments are the cost, usually monthly, to the holder of a finance product. When you borrow credit from a lender that credit has to be paid back. Once the lender has calculated the interest and fees charged on the sum you have borrowed, you will be presented with the credits over all cost. That figure is the cost of borrowing the credit, you should notice you will pay back more than you borrow. Then once you have selected a length of term over which you need to pay back the credit, the overall cost is divided by that number of months. This is then your repayment amount, this pays back a portion of the credits capital and a portion of interest charged.
The Grabber has a section on debt repayment for those visitors interested.

Repayment Mortgage

The repayment mortgage is sometimes called a capital and interest mortgage. With a repayment mortgage the entire mortgage, the capital and the interest, is paid back over the agreed period or term. When the mortgage's term has come to an end, providing all the repayments have been met, the property and its deeds will be in the hands of the homeowner.
The repayment mortgage gives the customer the peace of mind of knowing that once the final mortgage payment has been made they own the property and have no outstanding debt to pay to the lender.
If you are a UK resident and after a mortgage the Grabber has a mortgage section.

Right to Buy Mortgage

Right to buy mortgages are products specifically for use by public housing tenants who wish to purchase their property under the right to buy scheme. Public housing tenants are those tenants who rent their home from the local council, a housing association or a housing action trust. Right to buy mortgage products reward the tenant for their tenure with the landlord by giving a discount on the purchase price of the property. The discount offered is subject to different criteria including the tenants term in the property.
There will be terms and conditions attached to a right to buy and if holders decide to resell the property within a three year period, they may have to pay back some or all of the discount granted to their local authority.

Got a piece of jargon you want explaining, it's time to let The Grabber loose.

Associated Pages
refinance remortgage | refinance mortgage