Money Jargon - The Letter R

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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 R

On this page we explain,
Rate Surfing > Redemption Penalties > Re-mortgage > Removal Fees > Repayments > Repayment Mortgage > Right to Buy Mortgage

Rate Surfing

Rate surfing is a term used for actively seeking cheaper deals and offers on financial products. Surfing usually means searching around on the internet.

Surfing for a Credit Card
One of the products which can be surfed for on the net is credit cards. Transferring your balance to a credit card with a lower rate or waived period, can save you money and give you some financial breathing room. Transfering your balance regularly can save you money on interest charges.

Re-mortgaging and Rate Surfing
Another product that people frequently switch providers for is mortgages. Moving your mortgage to another mortgage lender with lower interest charges is a relatively easy to do. So long as you have no tie in's on your present mortgage then changing could save you money. However you should make sure you would have no penalties to pay your current mortgage provider if you should change to another one. There may be some terms and conditions written into your current mortgage that makes it difficult for you to change to another provider, it could be that you have a 'tie in' period and had not realised it.

Redemption Penalties

Redemption penalties are a charge that you incurr for repaying finance back early, that is before the agreed term has expired. They are usually associated with mortgages or longer term loans. The lender agrees to lend the capital to the borrower for a set length of time. The repayments on this include calculations for interest, charges and arrangement fees. The term which is the lenght of time it will take to pay off the loan is stated.
The borrower agrees to make the repayments on time and to keep paying for the set term. If the borrower wants to pay off the debt early or seeks to change lenders they are then seen to be breaking this agreement. By paying off a financial agreement early the lender would not be making the profit they had hoped to on the credit agreement. The borrower may have penalties or redemption fees to pay should they choose to pay the finance debt off early, and you should always be aware of such charges before you agree to any finance. The particular size of the redemption fee will vary between lenders.

Re-mortgage

A re-mortgage means switching the existing mortgage on a property for a new cheaper deal, often to a different mortgage lender or company. Re-mortgaging is often done in order to release any equity in a property. The equity can then be used for whatever the property owner wants. It could be used to increase the size of the property, which would infact add to the value of the property. The money made by remortgaging does not have to be invested into the property itself it can be used for literally any purpose: a new car, a holiday, new clothes anything at all. Most borrowers currently have standard variable rate mortgages, these are not the best deals to be found.There are lot of differrent mortgages out there and you could more than likely do alot better so why not have a look around and compare.
Potentially a lot of money can be saved by a home re-mortgage. You could have a new mortgage on your existing home, you could have the same size mortgage, or you could increase the amount you borrow for a little extra to get the luxuries you want.

Removal Fees

Removal fees are one of the easily forgotten costs of property buying, selling and moving. Removal fees will have to be paid if a company is hired to help transport belongings and goods from one property to another. Moving into, or out off a property is one of the last stages of property buying or selling, and although the costs are not great they are often overlooked and can become a burden to find.

Repayment

Repayments are usually made monthly, they are the money repaid to the lender. When you borrow from a lender it inevitably has to be paid back. Once the lender has calculated the interest and fees they will charged on the sum you have borrowed, you will be presented with an over all cost. That figure is the cost of borrowing, you will of course note that you will be paying back alot more than you borrow. Then once you have agreed a length of time or term over which you need to pay back the credit, the overall cost will be divided by that number of months. This then gives you your repayment amount, this repayment will go towards paying a portion of the capital and a portion of the interest charged.

Repayment Mortgage

A repayment mortgage is sometimes called a capital and interest mortgage. With this the entire mortgage, the capital and the interest, is paid back over the agreed period or term. When the mortgage term has come to an end, providing all the repayments have been met, the property and its deeds will be in the hands of the homeowner.
A repayment mortgage gives you the peace of mind, knowing that you are paying off both the capital and the interest each month. So long as all payments are made you will have no further debt on the mortgage and the property is then all yours.

Right to Buy Mortgage

Right to buy mortgages are products specifically for use by public housing tenants who wish to purchase their property under the right to buy scheme. Public housing tenants are those tenants who rent their home from the local council, a housing association or a housing action trust. Right to buy mortgage products reward the tenant for their tenure (period of rental) with the landlord by giving a discount on the purchase price of the property. The discount offered is subject to different criteria being met.
There will be terms and conditions attached to a right to buy and if holders decide to resell the property within a three year period, they may have to pay back some or all of the discount they were granted to their local authority.