Capital and Interest Mortgage - (see Repayment Mortgage)
Capital Raising - Normally refers
to a remortgage when additional funds are taken over and above
the amount required to repay the existing mortgage debt which
is then used for personal finance purposes.
Capped Rate - A capped rate is
a mixture between a fixed rate and a variable rate. The interest
rate is guaranteed not to rise above a set level within the
capped rate period but if the normal variable mortgage rate
is below the capped rate then the variable rate is charged.
This gives the 'best of both worlds' as the interest rate
can fall but will not rise above the capped rate. However,
the level at which the cap is fixed is usually higher than
for a fixed rate mortgage for a comparable period of time.
Sometimes 'Cap and Collar' mortgages are offered and these
impose a minimum payment rate (the collar) in addition to
the maximum rate (the cap). The lender will normally impose
early redemption penalties if the mortgage is redeemed within
the first few years (see Redemption Penalties).
Cash Back - This is the arrangement
whereby a cash sum of money is repaid to the borrower at the
start of the mortgage. The amount of the cash back will vary
considerably from lender to lender with the highest amounts
being paid where the borrower is willing to forgo any fixed
or discounted rate offers and pay the normal variable mortgage
rate. Cash back deals are also available in conjunction with
some fixed or discounted rates but the amount of the cash
back will normally be reduced in these circumstances. The
lender will normally impose early redemption penalties if
the mortgage is redeemed within the first few years (see Redemption
Penalties).
Centralised Lender - This refers
to the group of lenders, other than high street banks and
building societies, who operate without a branch network,
normally from one location.
Conditional Insurance - This refers
to insurance products which some lenders will impose as a
condition of their mortgage offer. This could mean that the
lender insists that accident, sickness and unemployment cover
is taken out or that combined buildings and contents insurance
is taken.
County Court Judgement (CCJ) -
A judgement for debt recorded at a County Court. These judgements
will be shown when the lender carries out a credit search.
If the debt has been repaid, subsequent to the judgement being
recorded, then the entry will be marked 'satisfied'. The appearance
of CCJ's on the credit register will reduce the mortgage options
available to you.
Credit Reference Agencies - When
a mortgage is applied for then it is highly likely that a
lender will obtain a credit search. Before they do this they
must obtain the customers authority either verbally or in
writing. By undertaking a credit search a note will be made
on the individuals credit file that a search was carried out
and the information will be available to subsequent companies
who may search a credit file. It is therefore important to
limit the number of searches that are made, as this generally
is an issue taken into account when reviewing a mortgage application.
In addition once the mortgage is taken out lenders may provide
information to credit reference agencies on the way mortgage
accounts are managed.
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