Money Jargon - The Letter D

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Money Crocodile knows the finance world is full of terms, phrases, buzz words and jargon. The below terms will help you with terms beginning with the Letter D

On this page we explain,
Debit Cards > Debt Consolidation > Debt Management Services > Debt Counselling > Deed > Defaults > Deferred Interest Mortgage > Deferred Period > Deposit > Depreciation > Direct Debit > Discounted Rate Mortgage > Draw Down Facility > Duty of Disclosure

Debit Cards

Debit cards are like credit cards, but the difference is that there has to be sufficient funds in your bank account to be able to use the debit card facility as money is taken out of your account to pay for goods. Debit cards are an alternative to using cash or writing a cheque. Linked to your bank account, debit cards often also work in cash machines and as a cheque guarantee card. The money spent on a debit card is usually shown as being withdrawn from your account in just a few days.
Switch and Visa operate these debit card schemes for the banks. Generally using these cards does not cost you extra as they are linked directly to your account, however you should be aware of any you may incurr if you do not stay in credit.

Debt Consolidation

Debt consolidation is the term used to describe the placing of all existing debts and arrears together, a seperate loan is arranged to pay off all those outstanding debts. This means that there would be just the one single and more affordable loan repayment to make each month. Debt consolidation or simply consolidation as it is may be referred to, is currently one of the finance industries large growth areas, companies charge customers varying amounts to manage their debts, they contact creditors, negotiate and arrange loans.
Companies that offer this debt consolidation service generally make their profits from the money saved by offering creditors an early settlement to any debt owed and from arranging and collecting repayments on the new loan.

Debt Management Services

Debt management services are agents or companies used by people with debt repayment problems. Anyone who is seeking to reduce the financial burden or consolidate debts use the service of a debt management company. They are often used by customers seeking to consolidate their debts.
If you have many debts and are frequently receiving notices from lenders, there could be a genuine need to deal with your debt and your creditors ASAP before the situation gets beyond your control. If you have any secured finance then your assets could be at risk.
Debt management companies deal with many debt scenarios every day, and are experienced and knowledgeable in how to deal with any mixture of debt problems. They can contact your creditors to arrange reduced payments perhaps in return for longer terms. They can devise a budget plan to assist you make your payments on time. If you are consolidating debt they should be able to assist you in applying for loans and clearing your debts.

Debt Counselling

If you are having difficulty managing your borrowed finance, you may need to consider loan consolidation. By taking out one loan to cover all your existing debt repayments, you can simplify your finances, but you should be careful you don't end up even deeper in debt. Consolidation is not the one and only answer. There are finance specialists who can help you through this difficult time and explain the options available to you. You should understand the pros and cons that come with every financial option.
The rates and fees charged by consolidation providers can be much higher than those available from high street lenders. Such finance may also come with expensive payment protection insurance.

Problems with Finance?
If you are finding money matters a struggle and you would like some help, there is free help available. Organizations such as the citizens advice bureau, national debtline or the consumer credit counselling service can all provide help and assistance. To find such organisations you could use a local directory or search for them on the internet.

Deed

A deed is a legal document and is best known as the method of transferring title to real estate from one person to another. A deed has to be signed and witnessed before it is formally handed over. Sometimes the deed is also called a title document. It contains an accurate, specific and legal description of the property. Deeds have special significance in law, for example, a conveyance has no force in law unless it is in the form of a deed. Title documents to both freehold and leasehold property may only be transferred by a deed.

Defaults

The term defaults is used to describe late or even missed payments that are due on any financial products taken out. If a borrower stays behind and thus in arrears on their repayments and ignores the lenders attempts to make contact, they are likely to end up with a CCJ against them. The CCJ or County Court Judgement will adversely affect any further attempts to gain finance, and could lead to them being turn down on any further applications because of the problem rating. Defaults on mortgages or finance secured on property may mean that property is in danger of being repossessed. Mortgage providers have the legall right to reposses your property and resell it in order to recoup the debts that they are owed. Defaults can also be described as current outstanding arrears.

If you are finding difficulty with repayments contact the lender of the finance product immediately, they may be able to help you, a repayment schedule could be arranged that would suit your present circumstances. Most finance lenders have departments or sections that can assist their customers with any repayment problems and by contacting them you could prevent further debts from building up.

Deferred Interest Mortgage

Deferred interest mortgages are usually marketed at times of high interest rates. They are usually offered to young professionals whose salaries are expected to increase rapidly or to those whose jobs carry the reward of large bonus payments. Deferred Interest means not all of the interest due is paid in the early years of the mortgage. The interest that is not paid early on is actually added to the outstanding mortgage amount. This results in the borrower paying more than the initial mortgage amount, as interest payments are higher over the rest of the mortgage due to the addeditional borrowing.

Deferred Period

Deferred period is the length of time which must pass, before a claim or benefit is paid. It is a term used in such products as insurance. For example: if an illness has been diagnosed or injury has occured then your insurance company will only make payments once a pre determined length of time has passed. The actuall period of time may vary from company to company but it should always be defined in the terms and conditions of any policy.

Deposit

The deposit is the advance made on the purchase of a property, it determines the size of mortgage required by the buyer. If say for instance you have saved 15% of a properties value as a deposit, then you will require an 85%mortgage to cover the remaining cost of the property. The larger the deposit you are able to save the better. At least 10% should be put forward as a down payment on property as charges can be high if you need to borrow more than 90% of the property's value.
There are however 100% mortgages available for those who want them, but generally lenders prefer to grant these to buyers with perfect credit ratings. 100%mortgages usually come with higher interest charges and larger mortgage indemnity guarantee premiums(MIG).

When buying property you should be aware as well as the mortgage and deposit, there are other legal costs to take into consideration and these can easily be over looked when saving up.

Depreciation

As with any item you buy, whether it be for personal or business use it will eventually get old or outdated and loose its value. Any asset will decline in value over time this is known as depreciation. This depreciation needs to be accounted for when arranging finance to help fund it's purchase.
For example, if you are arranging a personal loan to buy a new car, you should take account of the loans cost, the lenght of time the loan is taken over, your ability to pay and the depreciation of the vehicle itself. It would make no sense to get rid of the car after two years if you actually finance taken out on it for five years.

Direct Debit

Direct debit is an arrangement for payments to be made to a third party on specified dates directly from your bank account. This facility is offered by all banks, and once you give permission for the direct debit the receiver is responsible for organizing the deduction from your account. Direct debits are a safe way to make payments and your bank will repay you if it allows an incorrect payment to be made, which rarely happens. Once the direct debit is up and running you are free from worrying about making payments all you do have to ensure is that there are sufficient funds in your bank account to cover the payments.
Companies which provide regular services like to use direct debit payment methods because they are cost efficient to run. Mortgage, telephone, gas, electric in fact any regular service can be paid for by direct debit saving you time.

Discounted Rate Mortgage

A discounted rate mortgage is a mortgage product which offers a safety incentive to the customer. In order to maximise their business, lenders offer a discount off the standard variable mortgage rate this discounted rate is applied to the mortgage for a period of time. The borrower's monthly payments will alter, rise and fall to reflect the change in the lenders standard variable mortgage rate but will always be a margin below during the discounted period.
This gives the holder of the mortgage a level of security over their repayments as they will not be paying interest at the premium level. The period usually attributed to discounted rate mortgages can vary from lender to lender but is usually about two years.
These discounted rate mortgages tend to lock the holder into the mortgage for a minimum limited period and they usually include a penalty clause should the borrower wish to swap lenders. This means that the cost of any remortgage before the end of the discount period could be very high.
If you are a first time buyer a discounted mortgage can provide much needed extra cash for other expenses such as furniture, kitchen and bathroom essentials. Likewise, if you believe that interest rates will fall, the discounted mortgage makes continuing reductions to monthly repayments possible.
Although a discounted rate results in fluctuating payments, a big advantage is that from day one the borrower knows by how much the mortgage will increase on the day the discount ends. In other words, if the discount is for example 1% off the rate, and this represents a saving of £75 a month, then when the discount ends the payments will increase by £75, irrespective of any other movements in the meantime. It is however possible to move to another discounted rate mortgage once the current discount period 'tie in' has ended.
Lenders may offer these discounted rate mortgages without charging any arrangement fees, though not always. Furthermore discounted rates are usually the lowest rates in the market at any given time.

Draw Down Facility

A draw down facility is an option available with flexible mortgage products. The lender will allow you to access funds out of your mortgage account during the mortgage term. The lender will allow you to “draw” funds out of your mortgage account at any time during the mortgage term providing you do not increase the size of your borrowing over the previous mortgage advance. As a borrower it means you have access to borrowings in the future without having to resort to a remortgage or filling out reams of paperwork.
Draw down facilities can also be applied to self build mortgages.

Duty of Disclosure

A duty of disclosure is often encountered when you complete an insurance proposal form. Insurers can not verify everything you write down on your application. Equally, they have no way of knowing if you are lying or forgetting to disclose information. Instead, they ask that you tell them anything else that may affect their assessment of your insurance application. This puts a duty on you, to be honest and reveal any facts relevant to you application. Any failure to do so could invalidate your policy and leave you un-insured.