The Glossary
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The
Letter S
This
section provides information on terms and phrases beginning with
the letter S
At the grabber we know finance is full of
confusing terms and phrases, and so on this page we explain:
Second
Homes |
Secured
Loan |
Self Cert Mortgage |
Self Employed Mortgage |
Stamp Duty
| Store Card
A second home is a property owned but not lived in for most of
the time. A holiday home or villa are examples of second homes.
Purchasing a second home can be used as a way of investing
capital in the housing market especially since it is currently
so buoyant.
With current low mortgage rates and council tax allowing
reductions for second homes there's no reason why you can't have
two homes, as long as you can afford their cost.
A second home is a considerable investment whatever your
intentions and the Grabber has a section on
property investment for those visitors interested.
A secured loan or "homeowner loan" is personal finance which is
borrowed and then repaid over a set term. The secured loan is
secured upon property, usually the home, making it only suitable
for visitors who own a property. Secured loans are usually given
better rates than tenant loans because of their security and
generally cost less overall. The loans term is the period of
time over which the loan is taken out and then repaid. Many
loans come established with set term periods, with higher
monthly repayments for shorter terms and lower repayments for
longer terms. Loans advertised with set terms will usually
display the loans overall cost to the borrower which makes
comparing lenders easy.
The secured loans rate would still be dependant on your credit
rating and history, which could cause issues if you have a
problem credit rating.
If you are homeowner after information the Grabber has a
home loans section in our personal finance section.
A self cert mortgage is a mortgage that relies on self employed
accounts.
Self certification mortgages are a mortgage product offered on
the basis of a self employed person stating what their income is
likely to be, rather than being able to provide definite
evidence of their income. An accountant could be required to
back up this statement and with two or three years accounts
available should be enough to satisfy the lenders. Self employed
people can find them selves with an adverse credit or non status
rating because they can not provide any proof of income or have
little or no credit record.
Mortgage lenders are less friendly of customers who can not
prove their earnings using pay slips, and because of this those
self employed accepted for mortgages are likely to face greater
charges and repayment amounts.
Self certification mortgages charge a higher interest rate
because most businesses fail within the first two years of
trading, and if customers are left with large debt and arrears,
there is a possibility they could lose their home and this
leaves the mortgage lender unable to recover their outlay
because of insufficient loan security.
If you are after a mortgage the Grabber has a
mortgage application form.
A self employed mortgage is a mortgage that relies on self
certification.
Being self employed can make it harder to get a mortgage. If you
are lucky you could be certified with over 3 years accounts but
if you have less than 3 years accounts then you are classed as
self certified.
If you already hold a mortgage on a property and are looking at
becoming self employed you will need to inform your mortgage
lender. Your mortgage agreement was made upon your employed
status at that time, and any change in this could affect the
agreement.
Stamp duty is a tax charged on the purchase of property. Stamp
duty is calculated as a percentage of the properties value, so
the higher the property value, the higher the stamp duty
charged.
Recently the Chancellor doubled the stamp duty starting
threshold, to help first time buyers arrange mortgages and
assist families climb on to the housing ladder. This has had the
effect that a lot of properties no long fall into the stamp duty
thresholds.
Stamp duty land tax will require buyers to complete a self
assessment form. Although tax thresholds will remain the same,
the forms will reveal those homebuyers paying over the odds for
fixtures and fittings in return for the sale price being fixed
below a particular threshold. The tax office will have the power
to insist buyers, it suspects of tax evading, pay the full stamp
duty amount. There could also be fines and interest charges for
the buyers and sellers involved.
Store cards are a form of consumer credit, essentially they are
a line of credit which can only be used in a single shop or
chain of stores. The store card comes with pre-set rates and
with stringent terms. A credit check on applicants is usually
used to set the level of credit the holder can draw on.
The store card does not allow the holder to draw cash and just
like credit cards you will be sent a monthly bill. APR's and
interest rates are usually higher than other plastic with sharp
penalty charges for any defaults or late payments.
A store card will enable the holder to make savings on items in
stores, but some consider store cards to be merely advertising
gimmicks with little benefits.
The Grabber has a section on
consumer credit for those interested.
Got a piece of jargon you want explaining, it's time to let The Grabber loose.
Associated Pages
second
mortgage |
self cert
remortgage
|
