Glossary

• A
• C
• D
• E
• F
• H
• L
• M
• P
• S
• T
• V

• A

  Agreement in Principle (AIP)

  This is an agreement from the loan provider to lend you a certain amount of money. The amount will depend on the value of your property, and will consider your existing credit commitments and credit repayment history. The agreement in principle will also be dependent on proof of your identity and income.

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• C

  Credit Scoring

  This is the system many lenders use to help them decide whether they can lend money to you. They'll ask a series of questions about you and your finances and score your answers. Your score will result in you being accepted or declined for the loan you’ve applied for.

  Credit Search

  This is a check against a credit reference agency, such as Experian, to find out what customers have recorded on their credit files. This could include County Court Judgements, defaults, bankruptcy, or records of existing credit or credit that's been settled.

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• D

  Debt Consolidation

  Putting all your credit/debts into one place is usually referred to as debt consolidation and can often help your reduce monthly payments – either through a lower rate of interest, or spreading your borrowing over a longer term, or both. Consolidation can be a sensible way to tidy up multiple personal loans and credit cards. Instead of multiple repayments, these will be wrapped into one affordable monthly loan repayment and you could have more disposable income as a result. Repaying your borrowing over a longer term may increase your overall interest charges.

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• E

  Early Repayment/ Early Settlement

  Sometimes there’s a charge payable for certain types of loans and mortgages if they are repaid early, before the loan term is up. The amount payable will depend on the terms and conditions of the loan, particularly the age and size of the loan.

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• F

  Further Advance

  This is where additional funds are lent (on top of your existing secured loan) and taken after the initial loan was made. Both loans are secured against the property.

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• H

  Homeowner

  Picture provides loans for homeowners. We require you have mortgage and live at the property – usually known as an owner occupier.

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• L

  Loan Agreement

  A loan agreement details all of the conditions for the borrower and the lender. It will detail the responsibilities from both sides and may include information such as APR, length of the loan and expected repayments. You will usually be asked to sign a copy of the loan agreement and send it back to the lender.

  Loan To Value (LTV)

  LTV is used to determine the amount of money you have borrowed against the value of your home, shown as a percentage. For example, if your property is valued at £200,000 and your outstanding mortgage is £100,000 you would have an LTV of 50% (£200,000 - £100,000 = £100,000 / £200,000 =0.5 or 50%). With Picture you can borrow up to 125% LTV, minus your outstanding mortgage. This means you’re able to borrow a lot more that you can with traditional loans, often ideal for consolidation.

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• M

  Mortgage Deed

  A mortgage deed is a legal document that states that the lender has a legal charge over the property. When you repay your mortgage or secured loan, the mortgage deed will be removed from your property. It is sometimes referred to as a ‘legal charge’ and in Scotland a ‘standard security’.

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• P

  Payment Protection Insurance (PPI)

  Payment Protection Insurance (PPI) is a type of insurance that provides an income to maintain a borrower’s debt repayments in the event of an accident or sickness that prevents them from working, or unemployment.

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• S

  Second Charge

  A Second Charge is another name for a second mortgage on your property. It is a second claim on your home.

  Secured Loan

  A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. In the case of Picture’s loans, the asset is the borrower’s owned property. The debt is thus secured against the property — in the event that the borrower defaults, Picture can take possession of the property.

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• T

  Term

  This is the period over which the loan is to be repaid, and this will be defined on your loan agreement. Picture offers loan terms from 10 - 25 years.

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• V

  Variable Interest Rate

  A variable interest rate is where the interest rate is periodically adjusted based on an index i.e. it’s an interest rate that is subject to change over time.

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