Jargon Buster

The world of Finance is full of buzz words and Jargon. In this section I'll translate a whole rack of finance terms so you won't get caught out.

Go direct to: A-B | C-D | E-G | H-L | M-P | Q-S | T-Z | Jargon Index

This is my Index of Mortgage and Loan terms beginning with the letters E to G.

Early Redemption Fee
Often associated with fixed, capped or cash-back mortgages, an Early Redemption Fee may be payable if you pay off your mortgage early or want to changes lenders. Mortgages which have bonuses such as capped rates or cash back often have Early Redemption Fees as a way of covering this cost.
Equity
This is the difference between the amount you owe on your current mortgage and the current value of your property. Your Equity can be used in a remortgage to allow money for home improvements, a new car, holiday of a lifetime or reduce your monthly premiums.
Exchange of Contracts
The contracts are exchanged between the buyer's and seller's solicitors. Both parties are now legally bound to the sale and purchase of the properties.
First Time Buyer
When you are purchasing your first home and your first mortgage, you will be classed as a First Time Buyer. As you will have limited or no credit history then you may be considered more of a risk, however, there are mortgages aimed at First Time Buyers.
Fixed Rate Mortgage
A Fixed Rate Mortgage gives you the safety of knowing exactly how much you will be repaying each month. However, this means that as well as your repayments not going up with the base rate, they will not go down either.
Flexible Mortgage
This type of mortgage allows flexibility of repayments. Normally, a borrower will be allowed to overpay, underpay, take payment holidays. You can sometimes offset savings against the mortgage to help with payments. Certain flexible mortgages will offer daily interest rates so any overpayment will show benefits straight away.
Freehold
When you have paid off a mortgage, you will have the freehold of your property. This means that you own your land and property outright, and will no longer have to make repayments.
Gazumping
If you have an offer accepted for a property, then you may carry out surveys and local authority reports. However, if the seller then later agrees to another, higher fee, then you will have spent the money on these surveys and will not get it back. This is called Gazumping.
Guarantor
If you can't borrow enough to buy the home you want someone can act to pay the rest of the mortgage. Parents may act as Guarantors for their children when buying their first home.