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.
