Jargon Buster
Daily interest
Interest on the homeloan is calculated and applied on a
daily rather than a monthly or yearly basis. Can lead to
big savings.
Deadbolt lock
Locks that require a key to open from the outside and a
turn button from the inside.
Debt
Money owed to a lender.
Debt-to-income ratio
A ratio used by lending institutions to determine whether
a person is qualified for a mortgage. Debt-to-income is
the total amount of debt, including credit cards and other
loans, divided by total gross monthly income.
Decreasing term assurance
A life insurance policy that pays out a lump sum in the
event of death. The amount paid out can be calculated so
that it fall in line with your outstanding mortgage debt
– meaning that over time the borrowers premiums also fall.
This type of policy is well suited to providing cover on
a repayment mortgage.
Deed of covenant
This is a document which confirms that the buyer of a property
will comply with the rules and conditions affecting the
property which can be found in the Title Deed or Lease.
Deed of trust
A document that gives a lender the right to foreclose on
a piece of property if the borrower defaults on the loan.
Deeds
These are the documents which contain all the information
about a property such as the owner and the rules affecting
the property. These are often held by the mortgage lender
to ensure they can take possession of the property should
you default on the repayments. Take note of the deed number
to speed up your solicitor or conveyancer when buying or
selling the property as it can take a lender several weeks
to find the correct one.
Deeds release fee
When you are selling the house, your solicitor will need
to inspect the deeds. You will be charged a fee of between
£25 - £45 for this.
Default
When one mortgage payment or a series of payments are missed,
the borrower is referred to as being in default.
Defects
Particular features that may affect either the present value,
or the ability to resell the property at a later date. It
will be up to the surveyor to judge what the urgent and
significant matters are that could affect the market value
of the property. Identified in homebuyers report/ full survey.
Deferral period
Applies to payment protection policies and is the length
of time after you are unable to work or make the claim before
you can start to receive insurance payouts. Typically this
ranges from 30 to 60 days, though for non-mortgage related
products, the deferral period can be as long as 90 or even
120 days.
Deferred interest mortgage
Interest is not paid during the deferral period. When the
period is over, the accumulated interest is added to the
original loan. Some lenders add this interest to the total
of your loan to give a new loan figure and new interest
payments. Others calculate your interest payments on the
original loan as normal and then spread the repayment of
the deferred interest over a set period of time. The latter
method is better for you, as adding the deferred interest
to the loan means you end up paying interest on the deferred
interest!
Delinquency
Being late with loan payments.
Delinquent mortgage
A mortgage that involves a borrower who is behind onpayments.
If the borrower cannot bring the payments up to date within
a specified number of days, the lender may begin foreclosure
proceedings.
Dependants
Person(s) who depends on another for financial support.
Depreciation
The decline in value of a piece of property.
Detached
Refers to a property which is not attached to another on
either side and is therefore free standing.
Direct debits
A payment made from your account automatically to pay bills
etc, usually amounts that vary, e.g. A gas bill.
Direct lenders
Provide financial services over the telephone and through
the internet. Lower overheads resulting from a lack of high
street premises and centrally streamlined processes mean
that the overall costs are much lower and part of this saving
is used to deliver cheaper products. Add to this the convenience
of arranging a mortgage outside working hours from your
own home, and it is easy to see why these new operations
are finding favour.
Disability insurance
An insurance policy which covers an individual's ability
to produce income.
Discharge
Paying of the remainder of a mortgage.
Discharge fee
Covers the administration costs of transferring the property
ownership documents from the mortgage lender to the borrower.
Discount period
The time at the beginning of a mortgage life span when you
are offered reduced repayments. Can be useful to help you
overcome the often significant outlay involved with buying
a property.
Discount term
Time or specific date a discounted rate applies to a variable-rate
mortgage.
Discounted mortgages
With a discounted rate mortgage, the Standard Variable Rate
is temporarily reduced by a set amount for a specified period.
This usually ranges from one to five years. Once the discounted
period is over, you then revert to paying the prevailing
Standard Variable Rate. With this type of mortgage, it is
the discount that is fixed and not the actual rate.
Distressed property
Property that is in poor physical or financial condition.
Document needs list
A list of documents a lender requires when a potential submits
a loan application. The required documents range from paycheck
stubs to credit card statements.
Down payment
A lump sum paid when contracts are exchanged. It can also
refer to the down payment made on a new property in order
to reserve it for you.
Drawdown date
The date when the loan should be made.
Due dilligence
This is a process that will be undertaken by a mortgage
lender to assure themselves that the risk of lending you
the substantial amount of money required to purchase a house
is minimised. Involves checking your personal details/ status
and that of the property you wish to buy. The term is used
in other industries to, to indicate a period of research,
or checks to ensure the suitability of an undertaking of
some sort.
Due-on-sale clause
Standard language in a mortgage which states that the loan
must be paid when a house is sold.
