Early Payment Discount - Extended Redemption Penalty

Early Payment Discount

A discount offered for payment of a bill or debt before the due date.

Early Repayment Charge (ERC)

This is a penalty charged on traditional (i.e. non-Flexible) mortgages when the loan is repaid in full within a set period. Usually it applies on a pro rata basis when capital repayments are made outside of the agreed monthly payments. Many Early Repayment Charge periods are linked to those of offers, such as Capped, Discounted or Fixed rate periods. However, some mortgage rate have extended Early Repayment Charges which tie-in borrowers even while they are paying the Lender's SVR.
Also known as: Early Redemption Penalty (ERP); Redemption Penalty.

Early Repayment Period

A period of time that applies to certain types of loan during which a charge will be made if the loan is repaid in full or in part or its terms are varied at the borrower's request.

Effective Age

The age of a structure estimated by its condition rather than its actual age.

Eligibility Criteria

These are criteria which you must satisfy before an account or service application can be progressed.

Employment Status

A term used by lenders to describe potential borrowers' working arrangements. Self-employed applicants are sometimes seen as a greater risk than employees. Many specialist lenders and mortgages have emerged in recent years designed specially for different types of employment status.

Encumbrance

A problem with the title to a property that does not affect the transfer of ownership.

Endowment

A repayment vehicle associated with Interest Only mortgages.

Equity Linked Mortgage

The lender takes ownership of a stake in the equity of the property. This means that they lend you less than the full amount that is required to buy the home. Interest is only charged on the amount that they lend you and not on the full value of the property. When you sell the property, the lender receives payment in proportion to the amount of equity that they own, and therefore benefits from any increase in the price of the property.

Equity Release

Equity release or home income schemes allow you to generate either a lump some or a regular income in return for allowing the lender to take ownership of a portion of your home. These are often used by people in later stages of life who have paid of all or most of their mortgage and who are looking to raise funds without borrowing money.

Escrow Account

An account a lender or mortgage servicer establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also known as an impound account.

Essential Repairs

Work that needs to be carried out on the property before the mortgage completes.

Euro Mortgage

A mortgage taken out by those paid in Euros to avoid the need to exchange currency.

Examination of Title

An inspection by a title company of public records and other documents to determine the chain of ownership of a property.

Excess

Applies to an insurance claim and is simply the first part of any claim that must be covered by yourself. Increasing your excess can significantly reduce your premium. On the other hand, a waiver can sometimes be paid to eliminate any excess at all. Always check the excess in your policy.

Exchange of Contracts

This is the stage in England, Wales and Northern Ireland that the deposit money is paid and both parties are legally bound to fulfil the agreed conditions of sale and purchase.

Exclusions

These are events, instances or possessions which are not covered by your household or other insurance policy.

Exclusive Mortgage

This is a mortgage only available to intermediaries through a specific packager, in conjunction with a Lender who provides the funding.

Executor

A person appointed to carry out the instructions in a will. If there is no will, a probate court will appoint anexecutor.

Existing Liabilities

Expenses taken into account by a mortgage lender when assessing an applicant’s ability to repay the loan. These include loan repayments, maintenance payments etc.

Extended Redemption Penalty

This is where the redemption penalty continues beyond a fixed or capped rate period, effectively tying you in to the much higher variable rate for a period of time after the fixed or capped period. As a result you get stuck paying an uncompetitive rate that eats into the gains you may have made from having the fixed rate or capped ratein the first place.