Understanding the terminology used in the home buying and refinancing process is not always easy. There are many mortgage-related words and phrases that may cause confusion.
Our Glossary provides a comprehensive list of mortgage terminology to help you.
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R
redemption
- paying off the mortgage, either to move to another property or at the end of the mortgage term.
repayment charges
- see early repayment charge.
redundancy insurance
- known as accident, sickness and unemployment insurance - (ASU) Insurance cover arranged by the borrower to protect against inability to meet mortgage payments. This cover should more accurately be described as accident sickness and redundancy insurance as unemployment cover is generally seriously restricted to cover only events that are entirely beyond the control of the insured person. Typical exclusions include dismissal following professional misconduct and any act of voluntary redundancy. The accident and sickness cover will also be subject to major restrictions such as any act of self-injury or any injury related to the use of alcohol or drugs.
refinancing
- rearranging borrowings with a different lender, usually to obtain more attractive terms or to raise fresh capital.
regular earned income
- payment which is not guaranteed but is still a regular part of an employees remuneration. Lenders will normally wish to see evidence of such payments being made on a regular basis, e.g. payslips or P60s covering a period of months or years.
regulated loan
- loan of under £25,000 regulated under the terms of the Consumer Credit Act.
remortgage
- arranging a loan on a property in which the borrower already resides. Normally this involves redeeming an existing loan on the property.
remortgage with outstanding discount
- refers to a property that was purchased under a Right to Buy legislation, where the owner now wishes to remortgage whilst there is still an outstanding discount remaining.
rent allowance
- payment received from an employer to be used towards the cost of accommodation.
repayment
- payment made to cover interest or reduction in principal of a loan; monthly amount due to the lender
retired
- no longer working, either as an employee or on one's own account.
retirement annuity contract
- investment of a lump sum which produces a regular income for a retired person.
right to buy (RTB)
- option for council tenants to purchase the property in which they reside, often at a discount proportional to the length of occupancy.
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