Mortgage Terms E
It is provided for information only.
A to Z of mortgage terms
Early repayment charge (ERC)
A charge payable on certain types of loan if it is repaid or partly repaid within a certain period eg during a fixed-rate period or while a discount applies.
Sometimes used to describe an interest only mortgage supported by an endowment policy.
A combined life assurance and investment policy often taken out at the start of a mortgage to run for the same term. Premiums are paid by the borrower to a life assurance company, usually monthly. The company invests the premiums and the investment should provide a lump sum at the end of the policy term (which can be used to repay all or part of the mortgage) or earlier if the borrower should die.
The difference between the value of the property and the amount of any loan secured against it.
Work required on the property before the mortgage loan can be issued.
Exchange of contracts
In England and Wales (not Scotland), the point when both buyer and seller are legally bound to the transaction and at which point the buyer should take out buildings insurance on the property.