Money Jargon - The Letter E
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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 E
On this page we explain,
Early Redemption Fees > Easement > Endowment Mortgage > Equity > Estate > Estate Agents > Event Loans > Excess > Exchange of Contracts > Exclusions > Existing Liabilities
Early Redemption Fees
Early redemption penalties are a mortgage penalty charge, usually associated with particular mortgages that provide some sort of interest rate protection. The fee is incurred when the mortgage holders attempt to leave their mortgage early as in the case of re-mortgaging. Not all mortgage packages have early redemption penalty fees.
The lender of the protected mortgage agrees to lend the mortgage with benefits to the borrower, but in return the borrower agrees to keep the mortgage for a minimum term. This term of agreement is usually indicated in the mortgage agreement. If the borrower wants to pay off their mortgage early or seeks to remortgage, they could be charged a fee to do so, since they would be breaking the agreement. The particular size of the redemption fee varies from lender to lender, but it will inevitably increase the cost of re-mortgaging.
Easement
The term easement relates to an individuals legal rights involving a property. This pertains to rights over a property the individual does not personally own. The word Easement stands for the right to use another’s property, one example it could be that in order to gain access to your property you have a right of way through land belonging to another person.
There are two types of easement, positive and negative.
A positive easement is a right to do something on another person's property, and a negative easement is the right to prevent the owner of the property from doing something.
Endowment Mortgage
An endowment mortgage is a savings based mortgage with life assurance. An endowment mortgage is one where the monthly payments go partly towards paying off the interest incurred on the borrowing, while the rest of the payment is invested in the stock market by the lender. Endowment mortgages were designed to allow borrowers to pay smaller monthly repayments.
At the end of the mortgage term the invested funds should have increased and made enough money to pay off the outstanding balance (the amount originally borrowed). It was believed that in many cases, the invested amount would result in extra funds over and above the borrowed amount would leave endowment mortgage holders more than satisfied. However holders of many current endowment mortgage policies will have been notified that their final invested amount is unlikely to cover the final balance of their mortgage, leaving them with a shortfall they must provide themselves.
It could be possible to sell the policy to another company and this is called surrendering the policy. Legal action has been taken against many lenders who sold endowment mortgages, based on the belief that borrowers were ill informed about these types of mortgages and their pitfalls. If looking to take on a new endowment mortgage it is advised that time is taken to research all the conditions and to be aware of any pitfalls.
Equity
Equity is the difference between the amount outstanding on a mortgage loan and the current market value of the property.
If you have equity in your property you might be interested in releasing some or all of it to create finance which can be used for any purpose. Releasing these funds is called equity release. Equity release is creating finance from the value of a property or home without having to sell or move out of it.
The most efficient way to release the equity from your home is to re-mortgage it, how this works is essentially you re-mortgage for more than you currently owe and use the funds borrowed however you wish.
Another way to release equity from your home is to get a homeowner or "secured loan", the loan uses your equity as security. However a loan secured on your propertys equity may only raise a small amount. This amount could be adequate for your needs, however there are secured loan products that permit finance at amounts greater than your homes available equity, this is dependant on the approval from the lender.
Estate
An estate is the total sum of your assets, minus your liabilities. That is every thing you own, minus that which you owe.
The only time you really need to know what your estate is worth is when you are compiling a will. 'Estate' is a word that is used in all the legal terminology surrounding wills and tax planning.
Estate Agents
An estate agent is a professional employed to assist in the selling of property, they can also assist you in finding a property to purchase. The estate agent should be able to perform the more tedious and time consuming tasks involved in property buying and selling due to their experience and extensive contacts in the industry.
An estate agent is able to assist in selling your property by advertising your property and attending viewing's if you are unable to be there yourself. When using an estate agent to assist with home buying, the agent will have lists of property for sale in your area and in your price range. You can give them a list of requirements and they can arrange for you to view properties that will meet your requirements. There are some standard tips that customers should be aware of and adhere to and estate agents should assist you with.
Research the Market
What other properties are currently on the market in the area and how quickly they are selling? Compare a property to others on the market, use four or five in a local proximity, and calculate a reasonable price. A reasonable price will help the process move along quickly.
Buying Property
Buyers are advised
Be on time for viewing's and appointments and be interested in what the seller has to say, they will know the pros of the area. Remember you are in some ones home and always ask for permission before wandering around or opening any cuboards.
Befriend the Seller
You want to be on good terms with the seller, there will be a better chance of your offer being accepted if the seller likes you, if you are rude there is a good chance that the seller will take a dislike to you and will not agree a price. You are also less likely to be gazumped if you meet the seller. The decor may not be to your taste but pointing this out may get the sellers back up, and you want to get them on your side.
Making an Offer
Before making an offer, be sure the property is what you are looking for, that it meets your requirements and that your finance is in place. Are you or the seller in a chain, will you be waiting for others to move before you can. Ensure you have visited the area at various times of the day, this will give you a better impression of traffic in the area, and ensure it meets your needs.
Selling Property
Sellers are advised
Always be positive about the property you are selling otherwise the potential buyer may sense your negativity andbe put off the purchase. Have a good reason for selling and moving as the potential buyer may ask you. Stay calm and relaxed, otherwise potential purchasers will be put off and may put in an offer considerably less than the asking price.
Target the Buyers
If your property would suit first time buyers then target first time buyers, remember these people are just starting out on the property ladder and you may wish to consider including appliances, curtains and carpets in the asking price. Find out about local amenities and entertainment. That way the potential buyer may be impressed by the area, you may not use or be interested in the amenities yourself, but your potential buyer might, and they can be a great selling point.
Presentation
Ensure the property is clean and tidy and then stage it to take advantage of its best features. Do not neglect the garden and the properties exterior, a buyer may not have time for these aspects at first and having them in a sound and pleasant condition may be a plus point to them. Remember you are also part of the show so make sure you present the desired image. If you have a dog, whether it be large or small your potential buyers may feel uneasy with it following them around, it is better to ensure your four legged friend is out of the way should you have viewings. Ensure the air is fresh, air fresheners scented candles will do the job. Neutral decor has been known to sell a property, if the potential buyer sees a calm neutral room they are more likely to buy the property, knowing that its just a matter of a lick of paint rather than a total overhaul.
Event Loans
An event loan is a personal loan arranged to help pay for an event or an occasion. You could require a medical operation but face a long wait on the NHS, arranging a personal loan could enable you to go private and get the operation done sooner.
Arranging a personal loan to help pay for a event may at first seem strange, but sometimes waiting to save up just isn't a viable option. We can help you find and arrange a personal loan to pay for that occasion, so why wait when you could have it now.
Excess
Excess is usually a set amount or a percentage of a insurance claim that the policy holder is responsible for paying themselves. Excess exists to limit fraudulent claims and reduce the risk to insurers.
When taking an insurance policy out you enter into a legally binding contract. You will find that the contract will have an excess amount pre stated in the terms and conditions. This excess is payable by you irrespective of blame should you make a claim, and it usually has to be paid as a condition of the claims procedure.
When taking any insurance policy out you should make you are aware and understand any procedures or conditions relating to the policy.
Exchange of Contracts
This is encountered in property buying during the later stages when the price has been agreed, searches completed and both parties are satisfied.
The exchange of contracts is the moment when the transfer of title and ownership happens. The contracts are exchanged between the seller and purchaser's solicitors, once complete it results in both parties being legally bound to the sale. If there are any second thoughts about buying or selling your property, it is too late to back out once the contracts have been exchanged. This process provides security and legality to property buying and creates an avenue for compensation in the case of a party pulling out of the deal.
Exclusions
This is the term for any preset conditions not covered by a product.
Exclusions as the word suggests, are specific conditions that a policy does not offer cover for. There are always exclusions in an insurance policy. No policy can cover every possible event that might arise, so insurers include exclusions in policies to limit their exposure to the risks being run, this enables them to measure and quantify the risks they are accepting.
For example, a health insurance policy could provide a temporary income if an injury is sustained. However should that injury have occured whilst under the influence of alcohol the insurers may refuse a claim, as many policies do exclude injuries suffered as a result of drinking or drug abuse.
When you agree to a insurance products cover, you enter into a legally binding contract with the insurer, where you agree to the exclusions and other conditions of the policy irrespective of any blame connected to a claim. You should be aware of exclusions that apply to any policy before you sign an agreement.
Existing Liabilities
Existing liabilities are basically all financial commitments that are currently held. When applying for finance of any kind the lender will ask you what financial commitments you already have. Liabilities will include any credit cards, personal loans, maintenance payments, mortgages, etc.
Lenders will take these liabilities into account when they are evaluating an application for additional finance.
For example, you may have miscalculated the funds you have available and want to take advantage of a sale and purchase some item. Not having funds readily, you may decide to apply for a personal loan. The lender will want to know of any existing liabilities to help them determine whether you will be able to make repayments.
