Jargon Buster
Daily interest
Interest on the homeloan is calculated and applied on
a daily rather than a monthly or yearly basis. Can lead
to big savings.
Debt
Money owed to a lender.
Debt-to-income ratio
A ratio used by lending institutions to determine whether
a person is qualified for a mortgage. Debt-to-income is
the total amount of debt, including credit cards and other
loans, divided by total gross monthly income.
Default
When one mortgage payment or a series of payments are
missed, the borrower is referred to as being in default.
Deferral period
Applies to payment protection policies and is the length
of time after you are unable to work or make the claim
before you can start to receive insurance payouts. Typically
this ranges from 30 to 60 days, though for non-mortgage
related products, the deferral period can be as long as
90 or even 120 days.
Delinquency
Being late with loan payments.
Delinquent loan
A loan that involves a borrower who is behind on
payments. If the borrower cannot bring the payments up
to date within a specified number of days, the lender
may begin foreclosure proceedings.
Dependants
Person(s) who depends on another for financial support.
Direct debits
A payment made from your account automatically to pay
bills etc, usually amounts that vary, e.g. A gas bill.
Direct lenders
Provide financial services over the telephone and through
the internet. Lower overheads resulting from a lack of
high street premises and centrally streamlined processes
mean that the overall costs are much lower and part of
this saving is used to deliver cheaper products. Add to
this the convenience of arranging a mortgage outside working
hours from your own home, and it is easy to see why these
new operations are finding favour.
Disability insurance
An insurance policy which covers an individual's ability
to produce income.
Discount period
The time at the beginning of a mortgage life span when
you are offered reduced repayments. Can be useful to help
you overcome the often significant outlay involved with
buying a property.
Discounted loans
With a discounted rate loan, the Standard Variable Rate
is temporarily reduced by a set amount for a specified
period. This usually ranges from one to five years. Once
the discounted period is over, you then revert to paying
the prevailing Standard Variable Rate. With this type
of mortgage, it is the discount that is fixed and not
the actual rate.
