Money Jargon - The Letter F

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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 F

On this page we explain,
Fee Based IFA > Feuhold > First Time Buyer > Fixed Rate Mortgage > Flexible Loans > Flexible Mortgages > Flying Freehold > Freehold > FSA > Further Advance

Fee Based IFA

A fee based IFA, is a fee charging independent financial advisor. Most financial advisers earn their living from taking a commission from the products they sell, this commission has to be legally disclosed to their clients. An IFA is able to offer clients products from a whole range of lenders, as opposed to a tied agent who is connected to or "tied" to a single lender and their products.
There has however been concerns raised that advice from IFA's or tied agents are driven by their need to earn commission. It may be that one particular lender has offered the IFA a considerable amount of commission for any business they can put their way. This is believed to have happened in the past, and both borrowers and investors can be adversely affected.
Some independent financial advisers will charge an hourly rate for their services, this can be looked upon as being less partial to lenders products and more independent. Some will agree a single fee up front with any commission being rebated.

Feuhold

Feuhold is a word used in Scotland, and is similar to a freehold. This term is used for the owner of property and its land, meaning you are the absolute owner of the property and the land it's on and you have the deeds to the property.

First Time Buyer

A person or couple looking for their first home or first property and so their first mortgage are called first time buyers. A first time buyer has no pre-existing property and so no equity, this means the size of the mortgage available could be restricted.
There are first time mortgage packages available that are aimed at buyers new to the complexities of the property market, which include enhanced help and assistance with the legal side of property buying.

Firstly
For first time buyers the first step towards purchasing a home is to find out how much they can borrow for a mortgage. There is no point looking at properties that are just way outside your budget. Examine and determine which sort of mortgage you deem best suited to you.
Secondly
The second step is to find a sound property to purchase, whether a property is advertised using estate agents or not it needs to be a good sound investment, which means it should be worth the asking price and of course within budget.
Thirdly
View the properties you are interested in and make a formal offer to the seller for their property, your solicitors can do this for you. The estate agent if used can relay any queries or negotiations that arise for both parties.
Fourthly
The fourth step involves the exchange of contracts and hand over of the keys for the property with the buyer. At this point you become the legal owner of the property.

Deposits Save You Money!
First time buyers should be aware that it is beneficial to have the largest down payment you can manage to save toward a property's value. This down payment or deposit does not cost you interest the money you borrow will. Most lenders prefer to lend you a percentage of the value of a property as opposed to 100%, that way should you not keep up repayments they can take procession of the property sell it and recoup the money they are owed, even make a profit. A lender is legally within their rights to repossess your home if you continuously fail to make monthly payments.

Fixed Rate Mortgage

A fixed rate mortgage is a mortgage which has a set interest rate for a pre-determined term. With the fixed rate mortgage the interest rate is set for the entire period of the term, the advantage of a fixed rate is that it enables the mortgage holder to know the exact amount they will be paying during this set duration. The disadvantage of the fixed rate mortgage is that if interest rates fall the customer will still be paying repayments at the pre-agreed rate.
Their are many reasons for taking on a fixed rate mortgage, one possible reason is for budgeting. By always knowing what your mortgage payment will be each month you will understand how much money you have left each month.

Flexible Loans

Flexible loans act as a drawing account on which you may borrow money as you require. Your bank or lender will agree a credit limit, or maximum amount, for the flexible loan against which you may borrow. You can then use as much or as little of the money as you want. Unlike other loan finance, with a flexible loan you are only charged interest on the outstanding balance each month.
What flexible loans offer is the ability to re-borrow money that you have re-paid, should an unforeseen emergency require you to do so without having to first arrange fresh loan finance. Flexible loans can be suitable for you if you have a varying income, thus allowing you to pay extra off the balance when possible.

Flexible Mortgages

A flexible mortgage is a mortgage that allows the flexibility of repayments and the repayment amounts. Normally, a borrower with a flexible rate mortgage will be allowed to overpay, underpay or take payment holidays according to their situation. It might be possible to offset savings against the mortgage to help with the flexible rate mortgage premium repayments.
Certain flexible mortgages will even offer daily interest rates so any overpayments made will show benefit straight away. It is possible to make underpayments or take a payment holiday but this is only usually accepted once an overpayment has been made.
Flexible mortgages are an advantage when you are having financial difficulty, unforeseen problems do arise and it could be that you find that for a short time you are unable to make full payments on your mortgage. Theses types of mortgages would give you the flexibility to deal with such times and get back on track.

Flying Freehold

A room which has been built over a communal area can be described as a flying freehold. It is basically a term used to describe a part of your property which is built above land which is not part of the property you own.

Freehold

Freehold is the legal term used for the owner of property and its land. Being the freeholder means you are the absolute owner of the property as well as the land it's on and you have the deeds to the property. When a mortgage has been repaid in full and no debt is left outstanding you would then be given the deeds and thus the freehold to the property.
If you are a freeholder and are after raising finance, try our equity release section.

FSA

The FSA or Financial Services Authority is a body that regulates banks, building societies, credit unions, insurance, investment firms and independent financial advisers. In addition to the authorising and monitoring of these financial services, it has enforcement powers to investigate, discipline and prosecute. The FSA is able to impose fines on anyone who abuses their position within these services.
The regulator has specific responsibilities to consumers, their aim is to help people become better informed, and have deeper understanding of financial matters and services, so that they can manage their finances more effectively.

Further Advance

A further advance is an additional amount of finance added to a loan of an existing borrower. You may find that you require a little extra cash to complete a purchase well you can ask for an addition to the loan you already have. The further advance can be at the same rate as your initial loan but this is subject to status and the conditions set by the lender.

If you are in any doubt about any financial product or term we recommend that you seek advice from a financial advisor.