Credits and mortgages – Vocabulary and Phrases
adjustable-rate mortgage (ARM) – a mortgage in which the interest changes periodically, according to corresponding fluctuations in an index.
Adjustable Rate Mortgage became very popular over the last 5 years or so as interest rates were at record lows.
deed – the legal document conveying title to a property
Samuel received a deed of gift from his father containing 200 acres of land.
fixed-rate mortgage – a mortgage in which the interest rate does not change during the entire term of the loan
If you took out a fixed-rate mortgage several years ago and interest rates have since dropped, refinancing may lower your payments considerably.
repayment mortgage – a mortgage where the borrower repays part of the principal and interest each month
The only types of mortgages available for foreigners in the Czech Republic are repayment mortgages.
mortgage insurance – insurance that covers the lender against some of the losses incurred as a result of a default on a home loan.
We offer mortgage insurance products that facilitate homeownership.
to arrange a mortgage – to prepare or plan
We arranged a mortgage to fully repay his existing debt allowing him to regain ownership of his property.
to apply for a mortgage – to make an application or request; ask
When we applied for a mortgage this year, we were turned down, because the late payments were still on our report.
counterparty – a party to a contract
The firm with which you deal may be acting as your counterparty to the transaction.
to submit a credit application for approval – to present for the approval, consideration, or decision of another or others
He submitted a credit application for vehicle financing which was approved by Capital One
to approve a loan application – to accept
The loan application was approved based on the combined income of both applicants.
to turn down a loan request – to reject
Our first loan application was turned down because my wife was pregnant at the time.
covenant – an agreement, usually formal, between two or more persons to do or not do something specified.
She signed a covenant to give money to the school fund.
to give collateral – to provide sth that can act as a security or a guarantee for a loan
The Lombard rate, which the central bank charges to commercial banks borrowing overnight with government securities as collateral, was left at 6 percent.
underwriting – the process that a large financial service provider (bank, insurer, investment house) uses to assess the process of providing access to their product like providing equity capital, insurance or credit to a customer.
Thomas has more than 12 years of experience in credit underwriting and structuring small business loans.
underwriter – an organization, usually a bank, that purchases a share issue hoping to sell it to the public: an insurance company that undertakes to meet losses
The primary lender is often referred to as the underwriter of the loan.
creditworthiness/credit standing/rating – a lender's estimation of a borrower's present and future solvency
Each application is carefully reviewed after receipt, and credit decisions are made based upon the applicant's creditworthiness and ability to repay the loan.
solvency/to be solvent – having sufficient cash when liabilities become due
The better a company's solvency, the better it is financially. When a company is insolvent, it means that it can no longer operate.
fixed rate – cannot change, whatever the pressures of supply and demand
The Bretton Woods System which lasted from 1944-1972 was a fixed rate system where currencies were tied to the US dollar.
floating rate – able to change according to supply and demand
The floating rate allows the member to benefit from a decline in interest rates.
margin – the difference between the amount of a loan and the market value of the collateral pledged as security for it.
Due to the Bank's interest bearing liabilities repricing more slowly than its interest earning assets, the Bank'smargin has decreased from 2002 levels.
building society – an organisation that receives deposits and lends money as mortgages to home-buyers
We have a savings account at a building society which is going to be turned into a bank with shareholders.
early payment penalty – if the client were to repay the whole mortgage early
The Company incurred and paid an early payment penalty of $0.4 million.
debtor – person, company or country that has borrowed money
They are adept at tracking debtors and making sure they pay the amount they owe.
creditor – person or organisation to whom money is owed (for goods or services rendered, or as repayment of a loan)
The client gives us a sum of money each month to be divided up among all their creditors.
bad debt – amounts of debtors that are never likely to be paid
Last year the bank wrote off $17 million in bad loans
to write off a debt – to abandon a debt as bad or uncollectible (to recognize that it will never be paid)
My mother appreciated Jim's honesty and wrote off his debt.
cap/ceiling – the upper limit of a floating interest rate
The lifetime cap of the loan is 5% of the original interest rate.
floor – the lower limit of a floating interest rate
Our programme allows you to borrow money against your home at a loan floor of 9% minimum.
collar – a double limit to a floating interest rate, comprising both a floor and a ceiling
Our loan had a really with poor credit collar and we wanted to renegotiated the conditions with the bank.
to lend money against…
My bank may lend me the money against the property title.
to secure a loan on…
The property you secure the loan on must be in the Czech Republic.
conveyance – The legal document that transfers ownership of unregistered land.
The company has received conveyance to approximately 23000 acres of timberland located on Admiralty Island.
disbursements – All the fees of the solicitors and governments, such as stamp duty, land registry, search fees, etc.
If you are successful in your claim then your solicitor should get all or most of his costs, and all thedisbursements, paid by the other side.
freehold – The ownership of a property and the land.
From his father, he inherited freehold lands of Maplesden in Wadhurst and Ticehurst.
leasehold – The ownership of the property and land for a specified period, which may be sold separately from freehold, which may be owned by another person.
He invested in a very attractive leasehold pub in Suffolk.
to foreclose/foreclosure – to deprive (a mortgagor) of the right to buy back his or her property, esp. on failure to make payment on a mortgage when due, ownership of property then passing to the mortgagee
We filed bankruptcy to save our home from foreclosure.
nonrecourse debt/loan – a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable.
He took out a nonrecourse loan from an institutional lender for $1.5 million.
loan shark – a person or body that offers illegal unsecured loans at high interest rates to individuals, often backed by blackmail or threats of violence.
If you have borrowed money from a loan shark you are under no legal obligation to repay the debt.
business angel – an affluent individual who provides capital for a business start-up, usually in exchange for ownership equity.
In 2000 a business angel invested ?50k and joined EI’s board as a non-executive director.