CAB
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Citizens' Advice Bureau. A voluntary service provided in most major towns which offers free advice to individuals on financial and other matters. A very useful starting point for anyone experiencing credit problems.
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Cancellation Clause
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A clause in a loan agreement that allows a lender to ask for the outstanding balance at any time.
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Cap And Collar
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See capped rate.
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Capital Raising
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The act of remortgaging a property based on a higher value compared to the original purchase price. The capital raised is the amount left over after repayment of the original loan is deducted from the new loan. Some lenders will also take into account home improvement projects as part of the remortgage, if they are likely to significantly raise the value of the property.
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Capped Rates
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The mortgage interest rate will not exceed a certain value during a certain period of time, although it will fluctuate above and below the current level. Some capped products will have a ceiling and a floor between which the rate payable may move; such loans may be known as cap and collar mortgages.
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Cash Apr
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The APR charged by credit cards for cash advances, which is often higher than the purchase APR. Note that the cash APR also includes the cash advance handling fee as part of the calculations.
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Cash Back Mortgages
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Cash back mortgages provide you with a single lump sum of cash immediately on completion. The amount of cash is usually calculated as a percentage of the overall loan amount, though it can be a set figure. The percentage of the loan that is given as cash back can be as high as 5%, though amounts in the region of 1 to 3% are more common.
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Cash Buyer
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Person or persons who do not need a mortgage in order to buy a property and who do not have a property to sell.
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Cash Deficit
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In relation to a loan, this is money still owed to the creditor at the end of the repayment period of an interest only mortgage.
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Cash Discount
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A discount offered to a purchaser in a store for paying in cash, as the retailer will avoid paying any transaction charges and will get the funds instantly. Larger multiple stores are unlikely to offer cash discounts, as their transaction charges are calculated from head office.
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CAT Standard
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These are a set of standards proposed by the government aimed at ensuring a certain level of standard amongst financial products. Whilst they are a sign that a lender or provider is a reputable business and offers products that are of a certain quality, a CAT mark does not ensure that a product is the most suitable one for you.
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Caveat
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Formal notice asking a court to suspend action until the party which filed the challenge can be heard.
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Caveat Emptor
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From the Latin "let the buyer beware." A legal and moral obligation on purchasers of goods to ensure that they are not stolen, and in the case of "sold as seen" goods, that they are of a reasonable quality.
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CC
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See Competition Commission.
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CCA
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Act of legislation to clearly define the rules regarding money lending.
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CCJ
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If payments on a financial agreement are not made, a magistrate may issue a county court judgement (CCJ) in the name of the individual. This greatly affects your credit rating.
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Centralised Lender
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A general term applied to mortgage lenders, but not to high street banks and building societies, who mainly operate wholly from a head office location.
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Certificate Of Deposit
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Certificates from a financial organisation declaring you have the funds available to pay the deposit.
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Charge
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Security the lender relies on when granting credit.
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Chartered Institute Of Arbitrators
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The official body covering complaints relating to surveyors who are members of the RICS and ISVA professional bodies. All complaints which cannot be rectified directly with the surveyor in question should be referred here.
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Circumstances
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The set of personal conditions, such as age, employment, income and relationship status, which a lender may use to decide an individual's creditworthiness.
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Circumstantial Lending
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The process of lending to customers whose personal circumstances are less than ideal, due to lower income, debt problems or other issues.
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CML
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Council of mortgage lenders.
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Code Of Practice
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A group of principles and procedures individual employees of an organisation are expected to follow. This will cover such issues as client confidentiality, fairness and courtesy towards customers.
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Collection
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Steps taken by a lender to bring a person's payments back up to date.
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COML
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See Council of Mortgage Lenders.
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Commercial Mortgage
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Where the loan is granted for commercial purposes, and is usually secured against commercial property, though residential property may be used. With a commercial mortgage there is a higher rate of interest, as it is a higher degree of risk for the lender.
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Commission
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A percentage of the overall sale price that is received by the selling party when acting on someone else's behalf.
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Common Law Partner
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A partner who cohabits with his or her partner, and who can gain a number of financial benefits from such partner, without actually being legally married.
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Comparison Table
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A table giving comparisons between leading financial or other products to demonstrate which are the best performers under certain criteria. Remember that many such tables are a "one size fits all" covering a range of scenarios, and that the best way to evaluate your own options may be to draw up your own comparison table.
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Completion
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The moment at which all the legal formalities of the purchase or mortgage are finalised and the funds are drawn down from the lender, and usually into the solicitors account.
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Completion Date
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The official date for completion of a sale of a house, when keys are actually transferred.
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Compound Interest
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Interest on the interest.
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Compulsory Products
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Aspects of a financial contract that must be adhered to as a condition of the loan. An example of this income payment protection.
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Conclusion Of Missives
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This is a Scottish term for exchanging contracts.
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Conditional Insurance
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An insurance policy that has to be taken out as a condition of obtaining a loan. It must usually be taken out via the lender's agency. See compulsory products.
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Conservation Area
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An historic area of a town in which properties are protected by the local authority. Planning regulations are particularly tight in conservation areas, although property values are usually much higher due to the attractiveness of the Architecture.
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Constant Net Payment
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A form of capital and interest repayment mortgage, where the monthly repayments remain the same throughout the term.
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Consumer Credit Act (CCA)
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This is the main legislation covering the provision of loans to individuals. A regulated loan is one that does not exceed £15,000 and would not include a mortgage loan of over £15,000 and so the lenders set a minimum loan of £15,001 to ensure it is not treated as a regulated loan.
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Contents Insurance
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This is the insurance of property within your home i.e. furniture, clothing, personal possessions etc. Whilst lenders will be keen to offer contents insurance to borrowers, it is not essential that you should have it from them, or at all. Some policies offer a wider, all-risks wording, whereas others offer much lower premiums for more basic cover. Make sure you are aware of whether your contents policy includes items in your cars, on student property, or when you are traveling; and ensure you do not end up paying twice. Contents cover is a separate type of insurance to buildings insurance, which covers the structure of your property.
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Contract Work
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Many employers offer employment under fixed-term contracts as they have a greater control over staffing costs and are able to limit their redundancy payment liabilities.
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Contractual Lien
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The right a lender has to repossess a property if payments are not kept up on the mortgage or other loan secured on it.
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Converted Flat
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A flat that has been converted from part of a larger property.
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Conveyancing
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The legal documentation relating to the transfer of ownership of a property.
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Conveyancing Fee
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A fee charge by a solicitor or licensed conveyancer for arranging the necessary legal work in transferring the ownership of a property. The total cost of the legal work also includes profit cost, stamp duty, land registry fees and disbursements. See fee, arrangement fee, fees added to loan, booking fee, land registry fees, IGP, stamp duty and valuation fee.
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Convictions
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Entries on an individual's criminal records. In addition to affecting one's ability to get employment, some lenders may look at convictions when making a lending decision. A conviction for fraud would make an individual a particularly high risk to many financial institutions, whereas speeding or road traffic offences will affect motor insurance policies.
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Co-Ownership
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Shared ownership, a method of purchasing property in partnership with a housing association, where the borrower purchases part of the property and rents the rest from the housing association. The minimum purchase amount is 25% of the property value, and the rest may be bought in blocks of 25%. This arrangement is ideal for those whose personal circumstances prevent them from being 100% homeowners.
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Council Tax
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An annual fee paid to a local authority to cover essential services such as road maintenance, rubbish collection and leisure centres. Council tax is based on the value of the property according to set bands.
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County Court Fee
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Fee for when a lender provides information to solicitors regarding county court rules when payments are in arrears.
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County Court judgement (CCJ)
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A county court judgement is a judgement for debt in the county court. This debt does not appear in the credit register if this debt is settled within 30 days of the date of the judgement. Very few lenders are willing to offer loans to anyone with an outstanding or unsettled judgement, and even if the judgement has been settled many lenders are likely to refuse a mortgage or other credit application.
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Cover
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The risk that an insurance policy protects against, such as third party, fire and theft.
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Credit
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The process whereby a financial institution lends a sum of money to an individual or a business entity for the purpose of (a) house buying [a mortgage], (b) a major purchase (a loan), (c) general expenses (a credit card or overdraft).
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Credit Agencies
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Companies used by lenders to establish the financial situation of an individual or company.
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Credit Averse
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If a borrower has been bankrupt or has outstanding county court judgements they would be described as credit adverse.
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Credit Check
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Where an enquiry is made on the credit history of an applicant, normally by reference to one of the major credit agencies such as Equifax, CCN or Westcott Data.
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Credit Checking Agency
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A service used by lenders to establish a level of risk involved in leading money.
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Credit File
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A record held by a credit reference agency on an individual or a company. You can inspect your own credit file by writing to the agencies.
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Credit History
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The history of a borrowers financial record.
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Credit Limit
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The maximum amount of borrowing allowed on a credit card at any one time.
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Credit Period
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The time frame for which the lender agrees to provide credit.
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Credit Rating
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Rating used to establish risk involved in lending money. This is used in conjunction with credit history and financial status.
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Credit Reference Agency
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Companies that hold credit information one file.
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Credit Scoring
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A generalised way of assessing the credit application, carried out by scoring the answers given on an application. It is important that there are no missing answers on an application otherwise the result for the question becomes a negative.
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Credit Worthy
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A description of someone who is deemed by a lending institution to be a low risk to lend to (colloquial term). As with blacklisting, there is no such thing as a "perfect credit score", or someone who is "completely credit worthy", as there is always some element of risk involved when loans are made, and different institutions use different criteria when evaluating such risk.
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Creditor
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Person or company to whom a debt is owed.
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Critical
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Anything which is essential. A form of illness which is life threatening. See critical illness insurance.
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Critical Data
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Information which is absolutely essential for the running of a business, a household, or other entity. This might include certain computer files, title deeds, insurance certificates and key contact telephone numbers. Such data should be stored in a locked, fireproof chest, and should be backed up off site, so that it is not lost in the event of a burglary or house fire.
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Critical Illness Insurance
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Insurance cover for major illness, diseases and other potentially fatal medical conditions.
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Current Service (Employment)
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The amount of time that you have spent with your current employer.
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