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Annual equivalent rate (AER)
This illustrates, to two decimal places, what the interest rate would be if interest was paid and added each year.
Annual percentage rate (APR)
A standard calculation used to
show the total cost of a mortgage or other loan. Includes costs such as
interest payments, valuation fees, legal fees and administration fees
which are not included in the basic interest rate. The APR is the way
you can compare the cost of different loans on a 'like-for-like' basis.
As mortgage and loan rates vary, so will the APR.
Base rate
This is the interest rate set by the Bank of England.
County Court Judgement (CCJ)
Judgements made by a court concerning a debt that cannot be paid.
Usually, individuals with CCJ's are often asked to repay debts at a
peppercorn rate(eg. �1 per week). If you have one or more of these it
will limit your options in terms of borrowing more money.
Capital
In relation to a mortgage, this is the amount of money you borrow.
Credit Rating
If you have never had credit, then it is likely
that you will not have a credit rating as such. There are a number of
big credit companies who hold these records. In the event that you
default on payments or cannot fully pay off a debt, credit agencies are
often informed. Coversely, they are also informed when you do pay your
debts and improve your credit rating.
Default
The inability to pay off a credit contact or debt.
Tenant
A person who is renting a house, flat or property to live there.
Non-homeowner
A person who does not own property, but is not
necessarily a tenant. Often, people are provided housing by virtue of
their jobs, such as working for the armed forces.
Arrears
If you fall behind on payments, particularly on rent
or your mortgage, you are often referrer to as 'being in arrears'. This
will also effect your ability to get more credit.
Credit scoring
This is a technique used by brokers and lenders to assess the credit rating and risk of an applicant.
Gross interest
The gross interest rate is the interest rate without UK income tax deducted.
Net interest
The interest rate after UK Income Tax has been deducted (this assumes a rate of 20% Income Tax).
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