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Finance Glossary

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Based on the information you provide during your application First Trust Finance will be able to provide you with an Accept In Principle within 60 minutes. This means that we will be able to tell you whether or not we will be able to arrange a loan for you.

Advance Documents

 

 

 

This is the first set of credit agreement documents you will receive. There is no place to sign these documents as they are for your consideration only. After the consideration period we will send you the Signable Agreements.

Agreement

The Terms & Conditions you agree and sign.

Application Status

This refers to the progress of your loan application.

APR

 

 

 

Annual Percentage Rate. Provides an indication of the total cost of your loan and the total charge for credit. The method of calculating the APR is set out in the Consumer Credit Act and the regulations under the CCA. All lenders have to use the same method.

Arrears

 

Arrears is a term used when there are unpaid instalments on an agreement.

Audited Accounts

 

 

 

If you are self employed you may require an accountant who will produce audited accounts for you on an annual basis. We may request a set of accounts (up to 3 years) as proof of income during the course of your application.

Authority to Mortgage Lender

 

This may be referred to as an ATML. It is a form we ask you to complete so we can speak to your mortgage lender.

AVM

 

Automated Valuation Model. This is an online estimate of the value of your property.

Building Society Questionnaire

 

This may be referred to as a BSQ and is information we obtain from your mortgage lender regarding your existing agreement with them.

Capacity

 

This refers to the amount of disposable income you have on a monthly basis.

CCA

 

 

 

 

The Consumer Credit Act 1974 requires most businesses that offer goods or services on credit or lend money to consumers to be licensed by the OFT. Your Customer Account Manager will go through the requirements of the Consumer Credit Act during the application process.

CCJ

 

CCJ stands for County Court Judgment. You would receive a CCJ when a court has ordered you to pay a debt.

Consent

 

On some occasions your Mortgage company will require us to ask for consent to register our second charge against your property.

Consideration Period

 

 

 

 

 

You will enter into a "Consideration Period" if your loan is below £25,000 and once you have agreed your loan requirements with your Customer Account Manager. During the Consideration Period, which lasts for 16 days, First Trust Finance are unable to contact you in anyway to discuss your loan. You are able to contact us to discuss your loan agreement at any point during this period.

Credit Search

 

 

To help assess your loan application we will contact a Credit Reference Agency who will provide details of your credit history and existing credit agreements with other organisations.

Customer Account Manager

 

 

 

 

Once you have applied for a loan with First Trust FInance you will be contacted by your personal Customer Account Manager who will go through the full loan process with you and who will be contactable at any point of the loan process to provide any help or guidance you may require.

DC

 

 

This stands for Direct Credit which is a payment that can be made directly into your bank account. This is one way in which you could receive your loan advance.

Debt Consolidation

 

 

 

 

A Debt Consolidation Loan is when you replace your existing loans and credit debts with one single loan. By doing this you can reduce your monthly outgoings and usually pay less each month. Reductions in monthly repayments are usually obtained by having your loan over a longer repayment period.

Deed of Postponement

 

This refers to asking a lender to postpone their existing charge on your property in favour of a more recent charge.

Defaults

 

An agreement would go into a default situation when you have missed over 6 monthly repayments consecutively.

DPA

 

 

 

 

This stands for Data Protection Act which protects your individual rights and freedoms especially your right to privacy with respect to the processing of your personal data. Your Customer Account Manager will go through the requirements of the Data Protection Act during the application process.

Drive by

 

This is where a full inspection valuation is not needed and we instruct a surveyor to drive past your property and estimate the value.

Employment Vet

 

 

This is where we would contact your employers to confirm the details that have been provided during the course of your application.

Equity

 

 

 

This refers to the value of your property over and above any secured loan or mortgage on your property. This is the amount of money you would receive if you sold your house after you had repaid your mortgage and any secured loans.

Existing Debts

 

This refers to your current debts e.g. your mortgage, credit cards, personal loans, hire purchase etc.

First Charge

 

 

This is your main mortgage. A lender with first charge over a property has a first call on any funds available from the sale of the property.

Home Improvement Loan

 

 

 

A Home Improvement Loan is taken with a view to making improvements to your home, which may increase the value of your property. A First Trust Finance Homeowner Loan can be used for many purposes including Home Improvements.

Home Sign Up

 

This is where one of our Reps visits you at your convenience to complete the documentation in the comfort of your own home

Income & Expenditure

 

This is your net monthly income and outgoings, we will go through this with you during your application.

Joint Application

 

This is a loan application made by more than one applicant, for example Husband and Wife.

Legal Charge Form

 

This is a legal document that enables us to register our charge with the land registry. This can also be referred to as a CH1.

Lender

This is the company that provides the finance for your loan.

Loan Purpose

 

This is the reason you would like your loan. Certain loan purposes may not be allowed or have restricted terms.

Loan Quotation

 

 

 

 

 

This refers to the amount you would like to borrow and the length of time you would like to repay your loan. Your Customer Account Manager will go through how much you can borrow based on your Income and Expenditure review and then find the best quote to suit your needs. The quotation will itemise the costs, fees etc that you will incur by taking out your loan.

Loan Term

 

 

This is the length of time you would like to repay your loan over. Certain loan purposes may have restrictions on the term you are able to have.

Loan to Value

 

This is the amount you want to borrow against the actual value of your property.

Monthly Repayments

 

This is the payment that is made to the Lender to cover the interest and reduce the outstanding balance of your loan.

Mortgage

 

This is a loan used to purchase a home or to pay for your existing home, where the property is used as security for the lender.

Mortgage Statement

 

 

This is an annual statement that is produced by your Mortgage lender that shows the schedule of your last 12 months mortgage repayments. This will highlight any missed or late payments.>

Negative Equity

 

You are in negative equity if your property is worth less than what you owe to your lender.

OFT

The Office of Fair Trading.

Other Income

 

 

Other income is any income that you may have in addition to your basic annual salary such as Child Benefits, Maintenance Payments, Child Tax Credits, Pensions.

Over 18 Consent

 

This is a letter required to be signed by anyone in your household that is over 18 but not on your loan application.

Payment Protection Insurance

 

 

 

This is insurance which can be purchased to cover you if you are unable to make your monthly repayments due to an Accident, Sickness, Unemployment or in the event of a Critical Illness or Death.

Pre Emption Discount

 

This is the discount that a local housing authority can offer you when purchasing a council house you have previously rented from them.

Proof Of Income

 

 

 

Lenders may wish to see evidence of payments that are made to you on a regular basis, such as bank statements, payslips or your P60. If you are self employed Audited Accounts or business bank statements could be requested.

Property Valuation

This is the value of your property on the open market.

Qualifying Criteria

 

 

 

In order to be eligible for a First Trust Finance loan you must fit standard criteria. You must be over 23 years of age, be a permanent resident of the UK, be a homeowner with a mortgage and be in receipt of a regular income.

Regulated

 

This is an agreement with a value of £25,000 or less which is regulated by the CCA.

Repayment Schedule

This is the timing and amounts of your monthly loan repayments.

Second Charge

This is a legal charge in addition to your first charge (Mortgage).

Secured Loan

 

 

Also referred to as a Homeowner Loan. This is a loan specifically for Homeowners who can use the equity in their home to obtain a loan secured against their property.

Self certification

 

 

 

This is when you are unable to provide proof of your income and therefore you complete a declaration form confirming your annual income. This is most commonly used for self employed customers but in some circumstances can be used for employed customers.

Shared Ownership

 

This is the percentage of your property that a local housing authority can own.

Signable Documents

 

This is your credit agreement that you must read and sign as it contains all the terms and conditions of your loan agreement.

Total Amount Repayable

 

This is the total amount repayable to the lender over the lifetime of a loan, including all interest, fees and other associated charges.

TT

Telegraphic Transfer.

Typical APR

 

 

 

 

The typical APR enables you to compare rates offered by other lenders that also offer Homeowner Loans. It is the Annual Percentage Rate at or below, which we expect that credit will be supplied to at least 66% of all customers that take out a loan with us, as a result of an advert we have produced.

Underwriting

 

 

 

This is the process of assessing the ability of a prospective borrower to repay a loan. The process takes into account various factors such as your credit history, value of your property, your income and expenditure.

Unregulated

 

Loans over £25,000 which are not regulated by any Acts or Associations.

Variable Rate

 

This is the contractual interest rate which will vary over the term of the loan.

If you have any other questions please donít hesitate to contact us 0844 800 4531!

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