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GLOSSARY
Daily Interest
Where interest is applied on a daily basis instead of the traditional monthly time frame.
Daily Interest Mortgages
A mortgage in which interest is calculated daily, as opposed to monthly or annually.
Data Protection Act (1988)
Regulations introduced to protect the transfer of personal data within and between different organisations.
Debt
An amount of money owed to a person or company.
Debt Consolidation
The act of replacing a number of existing loans with a single loan from a new lender which may reduce your monthly payments by spreading out a larger loan over a longer period of time, and reducing the interest rate being paid.
Debt-To-Income Ratio
A method used by lenders to establish if a person is qualified to receive a mortgage or loan.
Deed
The legal property ownership documents. It will also show any land boundaries.
Deed Of Covenant
The document expressing the terms of a covenant (a binding agreement), which may typically be imposed by a lender to restrict certain activities, such as use of a house for commercial purposes, or sub-letting.
Deed Of Proxy
A document enabling one person to manage the financial and legal affairs of another individual.
Deeds Release Fee
A fee charged by a lender, usually at the end of a mortgage term, to cover the administration involved in returning the deeds to the owner or his solicitor. also known as Discharge Fee.
Default
The failure to keep up your monthly payments for several months on a loan, credit card or even catalogue payment. Even if you pay them off they stay on your credit file for six years. Many High Street lenders won't lend to individuals with defaults.
Default Notice
A letter served by a creditor to the borrower to say that a credit agreement has been breached, and that action must be taken by the individual to prevent the creditor seeking repayment via a County Court Judgement.
Deferral Period
A time period on a loan during which no repayments need to be made. This is particularly popular with student and graduate loans, to enable young people to finish their studies, or to travel, before having to start making repayments. "Buy now, nothing to pay until next year" type offers in furniture and other stores also operate with deferral periods.
Deferred Interest
A type of loan where some or all of the interest owed by the borrower is added to the amount outstanding which therefore causes the borrower to owe much more than originally borrowed.
Deferred Interest Mortgage
A mortgage in which some or all of the interest is not paid for a specified period, usually at the start of the term.
Deflation
A situation in which prices are falling. (The opposite situation to inflation)
Delayed completion
Completion can take place any time after exchange of contracts. However, if it is longer than 28 days it is referred to as delayed.
Delinquency
Not making payments at the correct time.
Delinquent Loan
A loan whereby the borrower is behind on payments. If payments are not brought up to date within a set time frame the lender may foreclose proceedings.
Dependant
An individual who depends financially on another person.
Deposit
In the context of mortgages, the deposit is the initial lump sum payment which the buyer must contribute to the property's total purchase price. Commonly set at around 10% and %) paid on exchange of contracts.
Deposit-based Savings
A method of saving which pays regular, usually variable interest based on the amount invested (instead of relying, for example, on the unpredictable returns from stock market investment).
Depreciation
The decline or reduction in the value of a property caused by property condition or changes in market conditions. (The opposite of appreciation)
Despatch Fee
See Deeds release fee.
Detached
Term used to describe a property that stands alone and is separated from all others.
Development
A newly built residence or an older property which has been refurbished and modernised.
Dilapidations
Any disrepair or damage to a rented property.
Direct Debit
A method of making automatic payments electronically from a current account. Direct debits may be at fixed intervals - e.g. for a monthly credit card or quarterly fuel bill, and they may be fixed (e.g. a monthly membership fee), or variable, such as for a mobile phone bill. Direct Debits can also be for irregular payments, such as buying shares.
Direct Lenders
Lenders who operate on lower overheads, through use of call centres, mailing houses, or internet based operations, instead of an expensive branch-based network.
Disbursements
Legal and administrative costs payable by the buyer's solicitor on the buyer’s behalf such as stamp duty, land registry and search fees. Disbursements do not include the Solicitor carrying out the legal work.
Discharge
Paying off a mortgage.
Discharge Fee
The fee charged by lenders at the end of a mortgage term to cover the administrative costs of transferring the property ownership documents to the borrower. also know as Deeds Release Fee.
Discharged Bankrupt
Person whose period of bankruptcy has ended and is able to apply for credit again.
Discharged CCJ
A county court judgement that has been paid.
Disclaimer
Any written notice designed to discharge liability of a company, for providing inaccurate information in a leaflet.
Discounted Period
Time period in which the Discounted Rate is payable. Can range from 6 months to several years.
Discount Purchase Price
The price of a property which has been reduced below the open-market value, such as in the case of a right-to-buy purchase or a builder's discount. Under right to buy legislation, properties are not offered at the open market value, but at a discount, and if the property is resold within a three-year period, some or all of the discount will have to be repaid.
Discount Rate
The mortgage interest rate is lower than the current normal standard variable rate (SVR), Bank Base Rate or Libor rate, but only for a certain period of time. Usually shown as a fixed percentage reduction to the lender's normal variable rate e.g. 2.00% discount for 2 years.
Distance mortgage mediation contract
If a regulated mortgage contract is taken out exclusively using the internet, telephone, email, or fax then it is classed as a distance contract.
Diversification
The principle that wise investors should spread their risk among many different types of investment. A properly balanced portfolio will contain elements of share, deposit-based and property investments. Fund performance and objective achievement are not guaranteed.
Draft Contract
Preliminary, unconfirmed version of the contract.
Draw Down Facility
The facility by which borrowers may increase the level of their debt up to specified limits and at specified times. Often applies to flexi mortgages.
Durable Medium
A document which meets the following criteria is said to be in a durable medium:
Capable of being used by the recipient.
Enables the recipient to store the information in a way accessible for future reference for a period of time adequate for the purposes of the information.
Allows the unchanged reproduction of the information.
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