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Abacus-money Jargon

C

Capped Rate

An interest rate that is set for a period of months or years. The trate paid will vary only until the standard variable rate exceeds the maximum or 'capped' rate.

Cash-back

A lump sum of money given by the lender when you take out their mortgage. It varies depending on the individual scheme, can be quoted as a set figure or as a percentage of the overall mortgage, and can, in some cases, be used to fund the deposit.

CAT Standard Mortgages

The Government has laid down CAT standards - fair Charges, easy Access and decent Terms - to help people identify mortgages which meet minimum standards. If a mortgage is described as meeting the CAT standards it doesn't mean that it is 'Government approved' or necessarily right for you.

CCJ

County Court Judgement. A decision made in the County Court, usually for the non-payment of a debt and is registered on your credit file. Once the debt is paid ("satisfied"), and a satisfaction certificate obtained, it is also noted on your credit file.

Collateral

An asset, such as a car or a home, which is used to guarantee the repayment of a loan. Should the borrower fail to repay the loan under the terms of the original contract, the asset may be seized by the lender.

Commitments

Charges, such as car loan payments, family maintenance, credit cards and mortgage payments, which a person has contracted to pay.

Completion

The day you become the new owner and can move in or transfer your deeds to a new mortgage provider.

Compound Interest

An interest payment on both capital and on previously accrued interest. For example, £100 borrowed for 5 years at 5% p.a. would become £105 after 1 year, £110.25 after 2 years and £115.76 after 3 years, and so on.

Conclusion Of Missives

The Scottish equivalent of exchanging contracts.

Contents Insurance

Protection for items in your home, including furniture and personal possessions - in case they're stolen, lost or damaged.

Contracts

The legal documents under which the buyer and seller of the property agree the terms.

Convenant

A clause in a mortgage contract or in a contract for the sale of a property that obligates or otherwise restricts one of the parties (buyer/lender or buyer/seller). The contract should detail any penalties, including repossession, which will be incurred if the covenant is broken.

Conveyancing

The process of transferring ownership of the property.This is usually undertaken by a solicitor or conveyancer.

Credit History

A history of an individual's open and fully repaid debts. Checking a credit history helps a lender to assess the likelihood that a prospective borrower will maintain their mortgage repayments.

Credit Scoring

A process used by some, but not all, lenders to determine whether you are a good risk to offer a mortgage too.

Credit Search

This is a search your lender will carry out to determine whether you have any CCJ's, defaults or outstanding credit card bills.

Critical Illness Policy

An insurance policy taken out by a borrower designed to pay them a lump sum of money, at least equal to the mortgage amount, should they be unfortunate enough to be diagnosed as suffering from any one of a number of certain medical conditions after the mortgage is in place. Unlike life assurance, it pays out on survival of the illness. It means the mortgage can be cleared so that there is no fear of repossession.

Current Account Mortgage

This is still a fairly new type of mortgage but it is becoming more common. Essentially, you have a mortgage account and a current account. Any positive balance in the current account is deducted from the mortgage balance, thus reducing the amount you owe. This is called offsetting and will reduce the interest charged on your mortgage.