Glossary off Economic Conditions
Crash, Disease and you may Unemployment Insurance policy (ASU) This is an insurance policy that helps meet the mortgage repayments should a borrower have an accident suffer long-term illness or be made redundant. See Insurance (note for Hento – possible Link). It is wise to think about insurance when taking out a loan or mortgage but, in our opinion, these policies are very expensive when provided by the lender (because brokers earn a lot of commission from them) and for this reason we don’t get involved with them.
Accountant A professional person who prepares and audits accounts for a business being a sole trader, partnership or limited company and offers professional business advice or other professional services. The main accountancy qualifications, in public practice, are the Chartered Association of Certified Accountants Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants in Scotland (Hento, these could be links). Note from biased towards my own professional body being the Chartered Association of Certified Accountants but anyone qualified to the standards of these three institutes should say a lot about integrity and professionalism. Accountants find themselves in many varied roles like, in my case, finance intermediation. There aren’t many of us in this type of role so when using a finance intermediary you may want to ask what makes them qualified to do the job.
Accountant’s Letter pick and Mind-Declaration of income (mention to have Hento – you can easily Hook). A person who is self-employed may not have up to date accounts to prove his income when it comes to getting a loan or a mortgage. Some lenders will allow what is called a self-certification of income but may have limits in terms of income or loan size over which an Accountant’s Letter might be requested. Essentially, this asks for confirmation that the applicant is self-employed, solvent and that there is no reason why the proposed mortgage payment cannot be made (though we get away with all manner of things with one lender we use)..
Membership Accounts are usually prepared on an annual basis for submission to the taxman or Companies House where a business is a limited company. Accounts can also be prepared more frequently to provide the management of a business with information about how a business is performing. These are known as management accounts. See also Budgets, Forecasts and Projections (note for Hento – possible Link)
Glossary of Financial Terminology
Extra Shelter What a good broker or intermediary will do is look for angles how to provide a solution to a customer’s enquiry and this may be by suggesting using alternative or additional security. This may actually reduce interest rates if done in the right way.
Bad Borrowing or poor credit otherwise less than perfect credit This term describes a situation where someone might have incurred county court judgment or judgments, missed payments on other debt or defaulted on other debt. It also applies to those people who unfortunately have gone bankrupt see Bankruptcy or entered into an Individual Voluntary Arrangement or in the case of a company a Corporate Voluntary Arrangement. Someone who has these type of challenges is likely to be described as having an adverse credit history. There are likely to be less lenders willing to lend to this type of borrower as they are often seen as being of higher risk. In our opinion this is complete nonsense, of course, which is why if you have adverse credit we will talk to you all day long. Other names for this type of situation are Non Status, Sub Prime or Non Conforming.