Business / Debt Glossary

Gross Income: The scheduled (total) income, either actual or estimated, of a person before deductions. This for example could be a person's salary plus bonuses, plus benefits in kind (e.g. company car and . . . View Full Definition

Growing Equity Mortgage (GEM): A fixed rate, graduated payment loan allowing low beginning payments and a shorter term because of higher payments as the loan progress. Based on the theory of increasing income by the buyer . . . View Full Definition

Guarantee: A commitment made by a person to be answerable for the debts or liabilities of another.

Hidden Asset: Asset not immediately apparent from a balance sheet.High equityA mortgage which is low in comparison to the amount deposited in cash by the purchaser.

Hire Purchase (HP): The pre-agreed purchase of an asset where the asset e.g. computer is in your possession as long as repayments are kept to. Once enough payments are made, the asset becomes your property.

Holder: A person in possession of a negotiable instrument such as a bill of exchange or promissory note. That person may be the payee or the endorsee. Or a person who has made an opening purchase of . . . View Full Definition

Incapacity Benefit: A state benefit payable after the expiry of state sickness benefit if a person is still unfit to work. This replaces the former invalidity benefit and as such carries a reduced level of bene . . . View Full Definition

Income Tax: In most countries income tax is progressive on successive slices of income, so that the more you earn the higher the incremental rates of tax you pay. In many countries, everyone is allowed . . . View Full Definition

Inland Revenue: The government department responsible to the Treasury for the collection of direct taxes which include income tax, capital gains tax and inheritance tax etc.

Insolvent: Unable to meet debt obligations.

Instalment: The regular periodic payment that a borrower agrees to make to a lender.

Insured Mortgage: A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure.

Interest: The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the c . . . View Full Definition

Interest Cap: The maximum interest rate increase of an Adjustable Mortgage Loan. For example: a 120% loan with a 5% interest rate cap would have maximum interest for the life of the loan which would not e . . . View Full Definition

Interest Rate: The percentage rate at which interest is charged on a loan or paid on savings etc.

Joint: Pertaining to multiple parties on the same side of an agreement or transaction.

Joint Account: Typically a bank or brokerage account in the names of two (or more) people. Arrangements can be made such that either individual or all signatures are required when drawing checks/cheques.

Joint Liability: The legal liability of two or more people for claims against or debts incurred by them jointly. If three people have joint liability and are indebted to another party, they may only be sued . . . View Full Definition

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