Glossary > The Letter B

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The Letter B
Saber Finance know the finance world is full of terms, phrases, buzz words and jargon.

On this page we explain,
Bad Credit > Balance Transfer > Bankers Draft > Base Rate > Beneficial Owner > Black Listed > Booking Fee > Bridging Loans > Bubble > Buildings Insurance > Building Report > Building Society > Buy to Let

Bad Credit
This is a term used to describe a low rating in credit scoring due to a poor credit history. County court judgments, mortgage defaults, loan arrears or other credit debt repayment problems lay on the persons financial record and lead to a rating of bad credit. Credit scoring is used by UK lenders to determine the level of credit risk you are before agreeing to lend fresh finance. Visitors can find credit to suit their score even if it is a bad credit rating. Your credit history and suitability will be on a national credit database but it is up to individual lenders whether the risk is acceptable. There are loan providers online that specialize in lending to people in this situation. If you have a problem credit rating you could use our finance tools to search for lenders and save yourself hours surfing online or trawling around the shops.

Balance Transfer
Balance transfer is moving the debt owed from one company to another to save money on charged interest. Usually balance transfer is referred to in connection to credit cards. Balances, arrears or the debt out standing on financial products results in interest and therefore increased debt. One way to reduce this debt is to transfer the balance and move between lenders. This new lender should be offering some grace term where the interest earned is reduced or even temporarily waived. This means any payments made go in full towards paying off the balance of the debt.
By transferring the balance for waived interest deals you can prolong the period where the debt is interest free and reduce the overall amount the debt will cost.
Interested in finding a credit card to transfer your balance to? You can find card issuers offering grace term in our credit card tools.

Bankers Draft
A banker's draft is a cheque drawn against either a cash deposit or funds taken directly from your own bank account.
The bankers draft is a more secure way of receiving funds and are commonly used for large purchases such as property and cars. Banks generally charge a fee for issuing a banker's draft.

Base Rate
The base rate is set by the Bank of England and can alter quite regularly. Any changes to the rate are announced by the Bank of England's Monetary Policy Committee, which meets monthly. This is then the standard base interest rate used for most UK financial products. The lenders will then add their interest rate on the top of this, which is their charge for lending the finance to their customers.
How the base rate fluctuations effects different types of finance repayments depends on what sort of product individual customers have and if any changes are passed on to their customers.

Beneficial Owner
Beneficial owner is a legal term which refers to the person who has the right to live in a property and use it as they wish although they do not actually possess full ownership. Beneficial owners could be a leaseholder or tenant.

Black Listed
Black listed is when a persons credit rating is so low they are automatically considered at risk of non payment.
Credit histories are stored on databases by credit reference companies, lenders check these to find out credit status before agreeing to lend any fresh finance. If there is a severe credit history the record will be black listed to note a risk to lenders. Some lenders will still lend on this but the interest rate will be high until the credit status is improved.

Booking Fee
A booking fee is a term to describe a fee which is payable up front, to either source or reserve funds for a purchase.
Booking fees are commonly used in property buying when particular mortgages are being used. Some mortgage lenders waive their booking fees to attract new customers to their mortgage deals.
Our mortgage tools and mortgage comparison tables should enable you to find a mortgage lender offering deals on their mortgage products.

Bridging Loans
Bridging loans are short term loans used to raise finance quickly. Bridging loans are often used by property buyers who need funds for a very limited period of time.
If you are after a bridging loan, banks and building societies do offer them, but you should consider the risks first of taking on further financial burdens.

Bubble
As in the housing bubble. At the moment property prices are continuing to rise and investing in them is still a viable option. That said buyers should be aware that overstretching themselves financially with large mortgages could easily bite them hard if interest rates rise.
If the bubble bursts and rates or mortgage payments go up, will you still be capable of meeting your obligations.

Buildings Insurance
Buildings insurance is insurance cover that usually covers the property itself, together with any permanent fixtures and fittings against damage. Mortgage providers will insist that the property has buildings insurance cover as part of their mortgage arrangement, this will then cover their investment. The sum insured under a buildings policy must be the full rebuilding cost of the home.
Standard buildings insurance should cover the property against damage caused by fire, storm, flood and subsidence. Some insurers will cover against less common occurrences as well usually for an extra charge.
Looking for home insurance? Our home insurance search directory could save you hours trying to find cheap building insurance.

Building Report
A building report is a survey carried out by a surveyor on behalf of a home buyer. The report checks the property for any defects or damage which may effect the buying of the property.
Although the building report is a survey that increases the fees involved in property purchasing it should never be over looked or not performed.
A building report survey is suitable for residential properties and provides a full picture of their construction and condition. Likely to be needed if their property is, of unusual construction, is dilapidated, extensively altered or where a major conversion or renovation is planned. It can usually be tailored to your individual requirements and needs.
The building report can include extensive technical information on construction and materials as well as details of the whole range of defects, major to minor. The surveyor should be able to explain any areas or terms you are uneasy over.

Building Society
A building societies traditional purpose was to lend money to individuals to purchase property, hence their name. A building society is a organisation that is owned by its members, it's savers and borrowers, and not by shareholders. Now days rules have been relaxed to allow societies to compete more effectively with banks and other lenders.
Interested in finding a mortgage, try our mortgage best buy table to find a cheaper mortgage deal.

Buy to Let
Buy to let is a term used to describe the purchasing of property solely to rent out to tenants. This is also a method used to invest money in property. Due to the stock markets poor performance over recent years more prosperous consumers are choosing to invest their capital in the housing market. Lenders will require that a particular product is taken if property is being purchased to then let out to tenants, this may mean differing interest rates and conditions applying to the buy to let mortgage.
Want to know more? The property investment section could help you out.

If you are in any doubt about any financial product or term we recommend that you seek advice from a financial advisor.

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