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APR ACCIDENT, SICKNESS AND REDUNDANCY INSURANCE (ASR) ACCIDENT, SICKNESS AND UNEMPLOYMENT INSURANCE (ASU) ADDED TO LOAN ADDITIONAL SECURITY FEE ADMINISTRATION FEE ADVERSE CREDIT ANNUAL PERCENTAGE RATE (APR) APPLICANT APPRECIATION ARRANGEMENT FEE ARREARS see Annual Percentage Rate
see Accident, Sickness, and Unemployment Insurance
A policy that pays a percentage of your usual monthly mortgage payments if you cannot work because of accident/sickness or unemployment/redundancy. You cannot normally claim for incidents such as voluntary redundancy, dismissal for misconduct or self-injury. There is normally a deferred period before payments start as well as a maximum payment period.
Some of the costs of taking out a mortgage can be added to the amount you borrow, for example arrangement fees, mortgage indemnity fees or administration charges.
see Higher Lending Charge.
A charge by the lender to cover the administration costs involved in arranging your mortgage. This fee is not normally refundable if you do not proceed with the mortgage application.
Describes an individual or a situation where there have been historical problems in paying bills. This might take the form of repayment arrears, County Court Judgements or bankruptcy.
A figure used to show the true annual cost of borrowing. It is defined by law and is therefore a useful way of comparing mortgage products. It should appear on all Key Fact Illustrations, mortgage illustrations and quotes.
Someone who applies for a mortgage.
The amount a property increases in value as a result of changes in market conditions.
A charge by the lender to cover the costs involved in arranging your mortgage. This fee is not normally refundable if you do not proceed with the mortgage application.
Describes the amount or the situation where a person has failed either to make payments on time or at the correct level.
BANKRUPT BASIC EARNED INCOME BOE: BANK OF ENGLAND BOOKING FEE BRIDGING LOAN BROKER'S FEE BUILDINGS INSURANCE BUY-TO-LET Describes a situation or a person where amounts owed by a person are greater than his/her assets and creditors have taken court action to ensure that the person's assets are administered by the official receiver in the payment of those debts.
Your basic salary before the addition of, for example, bonuses, overtime and shift allowances and the deduction of income tax.
Britain's central bank which sets and maintains the basic lending interest rate. Some mortgage products (trackers) have interest rates linked directly to the Bank of England base rate. See 'Trackers Mortgages' in our 'Mortgages explained' section.
Another term to describe administration or arrangement fees.
A short term loan used where an owner has bought a new property before the previous one has been sold.
A fee charged by a mortgage broker to a borrower for arranging a mortgage.
Your mortgage will usually require you to keep your property insured for the total estimated cost of rebuilding in case it is damaged or destroyed. Your valuation will include a figure for 'Reinstatement' which is used to calculate buildings insurance. You should note that the figure on which is rarely the same as the value of the property used when applying for a mortgage.
A special type of mortgage specifically designed for borrowers who want to own a property but rent it out, usually as an investment.
CAT STANDARD MORTGAGES CAP CAPITAL CAPITAL IMPROVEMENT CAPITAL AND INTEREST MORTGAGE CASH BACK CENTRALISED LENDER CERTIFICATE CHARGE CLEAR TITLE COLLAR COLLATERAL COMMISSION COMMON AREAS COMPLETION COMPOUND INTEREST COMPOUNDING COMPULSORY INSURANCE CONCRETE CONSTRUCTION CONDITIONAL INSURANCE CONTENTS INSURANCE CONTINGENT CONTRACT CONTRACT WORK CONVERTED FLAT CONVEYANCING CONVEYANCING FEE COUNTY COURT JUDGEMENT (CCJ) COVENANT CREDIT CHECK CREDIT REFERENCE AGENCY CREDIT SCORING CRITERIA The CAT (Cost, Access and Terms) Standard is a new system whereby if a mortgage product conforms to rules set out by The Government it can use a CAT mark, rather like a British Standard of Kite mark. See the CAT Standard Mortgages section in 'Mortgages Explained'.
A maximum interest rate is set for a given period. Please close the Glossary and enter our 'Guide to Mortgages' for a more detailed explanation.
Also known as 'equity', this is the amount of money either put into buying the property, or the amount over and about the amount needed to pay off any outstanding mortgage if the property is sold.
Any improvement which permanently increases the value of the property.
Capital and Interest mortgage guarantees that your mortgage will be repaid at the end of the mortgage term, assuming you have made all of the payments when they fall due. Your monthly payments consist of Capital (the amount you owe) and Interest (the charge for the money). Please close the Glossary and enter Mortgages Explained for a more detailed explanation.
An amount of money paid by a lender to a borrower as an incentive on taking out a mortgage but not then added to the amount borrowed. See Cash back mortgages.
A lender who operates usually from a single office and has no network of branches, typically communicating by brokers or by telephone.
See Mortgage Certificate
Usually known as a Legal (Mortgage) Charge. When a mortgage is taken out, the bank or building society register an interest in the property by taking a legal charge over it. You will manually have to pay a fee to your solicitor to cover this, typically about £100.
A legal description where property is owned without any questions as to its ownership.
A minimum interest rate set for a given period. Such mortgages are rare and are usually associated with a 'Capped Rate Mortgage'. See 'Capped Rate Mortgages' in our 'Guide to Mortgages' section.
An asset that is used to guarantee the repayment of a loan in case the borrower fails to pay if off.
An amount payable to a mortgage broker by a lender for introducing a borrower to the lender. This is often referred to in the industry as a 'Procuration Fee'.
Areas of land or buildings where access is shared by more than one owner and where the cost of maintaining the area is also shared. This may include gardens, hallways or parking areas.
The final stage in the purchase of a property, when the legal documentation is finalised and funds are sent by the lender to the purchaser's solicitor, who transfers them on to the vendor's solicitor.
An interest payment on both capital and interest that has previously accrued. For example, £1,000 borrowed for 25 years at 10% interest rate attracts interest of £100 after 1 year. If this is not paid off £1,100 is left owing at the end of the year. In year 2 the interest is calculated on both the original £1,000 and the first year's interest of £100 so the interest for year two is £110 meaning the amount owed at the end of year 2 is £1,210 and so on.
Compounding Is where interest is added to the capital and any preciously accrued interest.
(also known as Conditional Insurance). Some lenders insist that the insurance policies such as for the structure of the building or event its contents be taken out with them. In any event, lenders often insist that the building be insured before they will advance the monies for the mortgage amount. See also Buildings Insurance.
Some properties, particularly those build by public bodies in the 1960s and 1970s are made largely of concrete. Some lenders will not provide a mortgage for such properties.
(also known as Compulsory Insurance) Some lenders insist that the insurance policies such as for the structure of the building, or event for its contents, be taken out with them. In any event, lenders often insist that the building be insured before they will advance the monies for the mortgage amount. See also Buildings Insurance.
Insuring the contents of your home such as electrical goods, carpets, furniture and curtains is usually advisable. Some compulsory building insurance policies also provide contents insurance.
A term which means that an action relies on another action happening first. For example, a mortgage being contingent on a satisfactory survey means that the mortgage will not go ahead until a survey is carried out and is found to be satisfactory.
Either a written or an oral agreement to do or not to do something.
Some workers are now employed on fixed term contracts rather than full time employment. This means that the individual is not employed directly by the company and while they loose the security and other benefits of full time employment, they are often better paid and have greater working flexibility. Lenders have traditionally preferred to see full time employment but many have adapted to take account of contract workers. If you are a contract worker you will need to demonstrate a consistency of employment.
A flat or apartment that was formerly part of a larger property.
The act of buying or selling a property, usually handled by a solicitor or a licensed conveyancer.
The cost of buying a property, usually charged by a solicitor or a conveyancer for the time taken to process the legal paperwork and normally charged on completion.
A notice for bad debt issued by a County Court that will show up during a credit check. If you have one or more CCJ's you may find it difficult to get a mortgage although there are some lenders who specialise in borrowers with CCJ's or other credit problems.
A clause in a mortgage contract or in a contract for the sale of a property that places an obligation or a restriction on one of the parties. The contract will specify what happens if this obligation/restriction is broken.
A process whereby the lender will examine your credit history by using one of the major credit agencies. Lenders will also have their own criteria against which to judge whether they are prepared to lend to you.
A company that collects and stores financial and public records about the payment records of individuals. These records are examined by lenders upon receipt of your application.
A system whereby lenders will assess your ability to meet the mortgage payments based on the contents of your application form.
The standard terms that each lender uses to define the type of mortgage business they will conduct. A typical example would be limiting loan to value to 75%.
DEBT DEBT CONSOLIDATION DEED DEEDS RELEASE FEE DEFAULT DEFERRED INTEREST DEPOSIT DEPRECIATION DISBURSEMENTS DISCHARGE FEE DISCHARGED BANKRUPT DISCOUNT PERIOD DISCOUNTED RATE DRAW DOWN FACILITY DROP-LOCK FACILITY An amount owed by one person to another. Once you take out a mortgage, the amount you owe to the lender is the debt.
A means whereby you can bring a number of different loans together into a single loan. This may be more efficient for you and, if the new loan is a mortgage, it may have a lower rate of interest because it is supported by the value of your property.
The legal document giving ownership/title to a property.
A fee charged by a lender to cover the administration involved in releasing its charge over the property and returning the deeds to your solicitor.
The failure to make mortgage payments at the right time or at the right level.
The ability not to pay interest for a given period, typically at the start of a loan period, but agreeing to pay it later.
The amount of money put into the purchase of a property by borrowers, usually at exchange of contracts and most commonly 10% of the agreed purchase price.
The reduction in value of a property caused by changes in market conditions, the condition of the property or the locality.
The expenses involved in the conveyancing of a property, typically photocopying, postage, and printing of legal documentation. They are added to the amount charged by the solicitor or conveyancer.
Lenders charge this fee when releasing the charge over a property after a mortgage has been repaid.
See Bankrupt - to be discharged from.
The period during which the interest rate is below a 'normal' rate, typically up to 3 years.
The interest rate below a standard variable rate for certain kinds of Mortgages. See Discounted Rate Mortgages in the 'Mortgages Explained' section.
The ability to increase the level of your borrowing under certain special mortgages up to pre-agreed limits and at pre-agreed times. Useful if, for example, you know that at a certain time in the future you are going to want to spend money improving your property.
The ability to move from a variable rate mortgage to a fixed rate mortgage with the same lender without penalty.
EARLY REPAYMENT CHARGE EASEMENT ENCUMBRANCE ENDOWMENT EQUITY EXCHANGE OF CONTRACTS (APPLIES IN ENGLAND AND WALES ONLY) EXISTING LIABILITIES EXPATRIATE EXPATRIATE The cost you would incur if you paid off all or part of your mortgage before the end of the term. These are typically associated with Fixed, Capped or Discounted Rate Mortgages. They may apply if you pay the mortgage off within the fixed/capped/discounted period or they may apply for longer. You will need to take great care in assessing the impact of any redemption penalties applied to your mortgage.
A right for people over property that is not theirs, typically involving access. For example, the right for water in a pipe to cross another's property.
Something that has a limiting or detrimental effects on the ownership of a property. For example a mortgages, lease, right of way or easements.
A financial investment product which can be used to support the payment of your mortgage at the end of the term. These are typically associated with Interest Only Mortgages. It is essential that you take independent financial advice when considering an endowment policy.
see Capital.
The point in the purchase process when legally binding contracts are exchanged between the buyer/purchaser and seller/vendor. After this point the seller and buyer are committed to the sale and purchase of the property on the agreed terms
Your current financial outgoings before taking out a mortgage, for example, credit card, loan and maintenance payments etc. These will be taken into account when a lender assesses whether you will be able to meet the proposed monthly mortgage payments.
An individual who is working or living in a country which is not the place of his or her birth or nationality.
FAIR MARKET VALUE FEUHOLD FINANCIAL SERVICES AUTHORITY FIRST CHARGE FIRST TIME BUYER FIXED RATE FLAT ABOVE SHOP FLEXIBLE FEATURES FOREIGN CURRENCY FREEHOLD (ENGLAND) FUNDS RELEASE FEE FURTHER ADVANCE The
amount or
money paid
for a property
where neither
the buyer
nor the seller
is being forced
into the contract.
This is typically
the agreed
sale price
and may be
different,
for example,
from a price
agreed where
one party
needs to make
a quick sale
for any reason.
A
Scottish term
for a way
of owning
property.
The nearest
English/Welsh
equivalent
is the freehold.
The Financial Services Authority (FSA) is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000.
A
legal charge
normally registered
by a mortgage
lender over
a property
whereby the
lender receives
the first
proceeds raised
by any sale.
A
phrase
used for borrowers
who are buying
a property
for the first
time. In some
cases, lenders
will treat
someone who
owned a property
in the past
but is currently
renting as a First Time Buyer. Lenders
often try
to attract
first time
buyers with
more attractive
as a way of
winning business.
Where
the interest
rate for a
mortgage is
set for a
given period.
Please close
the Glossary
and enter
Mortgages
Explained
for a more
detailed explanation.
A
flat or apartment
located above
a retail property.
This can be
viewed by
some lenders
as being less
attractive
than one in
a purely residential
building The
lender may
not wish to
grant a mortgage
in such circumstances.
The
ability within
some mortgages
to increase
or decrease
monthly payments,
subject to
pre-agreed
limits. See
Flexible Mortgages
by closing
the Glossary
and entering
the Mortgages
Explained
section.
Some
mortgages
can be advanced
in currencies
other than
sterling.
They increase
the amount
of risk involved
as both the
monthly repayments
and the amount
of the mortgage
become subject
to changes
in exchange
rates.
Where
land or property
is owned indefinitely.
This is different
from leasehold
that gives
the owner
a right to
hold the property
only for a
limited period
of time.
Some
lenders charge
a fee for
transferring
the money
they are lending
you to your
solicitor.
Typically
this is in
the order
of £25.
A
further loan
amount that
has been issued
by the existing
lender and
included within
the first
charge on
the property.
Typically
used to consolidate
debt or pay
for improvements
to the property.
The
standard conditions
applied to
a mortgage,
set out in
the paperwork
issued to
a borrower.
Some
lenders, typically
smaller ones,
only lend
on properties
in their local
area.
Total
income received
per year before
taxes are
deducted.
This will
include bonuses,
overtime,
dividends
etc.
This term used to be used to define the monthly mortgage payment before the deduction for MIRAS tax relief. Even though MIRAS was abolished in April 2000, Gross Monthly Payment is still sometimes used simply to define the amount a borrower pays each month towards their mortgage.
A
person, often
a parent or
relative of
a borrower,
who guarantees
that mortgage
repayments
are made in
the event
that the borrower
defaults.
Guarantors
should seek
legal advice
about the
financial
commitments
and obligations
involved.
A
fee paid by
the borrower
to the lender
at the start
of the loan
period if
the amount
borrowed is
a high percentage
of the value
of the property.
See Loan to
Value. The
lender uses
the fee to
insure itself
against the
borrower defaulting
on the mortgage
and in case
the value
of the property
on repossession
is less than
the amount
of loan outstanding.
The borrower
receives no
benefit and
no protection
from this
policy. If
the lender
makes a claim
on the policy,
the insurance
company can
then pursue
the borrower
for repayment
of the amount.
A
property which
is used only
for holidays
or weekends
and not as
a main residence.
Lenders criteria
are more strict
than for a
main residence
and usually
require a
larger deposit.
A
type of survey
which contains
more information
than a mortgage
valuation
but less than
a full structural
survey. The
surveyor may
also carry
out a mortgage
valuation
for the lender
in place of
a simple valuation
report so
you need to
check that
the valuer
is acceptable
to the lender.
A home buyer's
survey gives
the borrower
more useful
information
than a simple
valuation
report.It
is important
to get the
right type
of survey
carried out
when buying
a property.See
also: Full
Structural
Survey and
Valuation
Report.
ILLUSTRATION IMPAIRED CREDIT INCOME MULTIPLIER INDEPENDENT FINANCIAL ADVISER (IFA) INDEX TRACKER INITIAL INTEREST INITIAL RATE INTEREST INTEREST CALCULATED INTEREST ONLY INTERMEDIARY INTRODUCER ISA An
illustration
is given to
a potential
borrower showing
the cost of
a mortgage
on a monthly
basis together
with any other
expenses incurred
with the loan.
The
credit rating
of someone
who has been
declared bankrupt,
has a CCJ
or may be
behind with
the repayment
of a mortgage
or personal
loan.
A
method used
by lenders
to calculate
how much they
will lend
you depending
on your annual
income. Typically,
they will
multiply your
income by
three. If
you are applying
jointly with
someone, they
will multiply
your joint
income by
two and a
half. If you
have other
loan commitments,
the lender
may reduce
the multiple.
A
person or
firm regulated
to provide
investment
advice. An
IFA is able
to choose
from a range
of products
unlike a tied
adviser who
can only advise
on the products
of the company
they are tied
to.
A
type of mortgage where the interest rate tracks a market rate such as the Bank of England base rate.
See 'Tracker Mortgages' in our 'Mortgages Explained' section for a detailed explanation
The
payment which
covers the
period between
the date of
completion
and the date
when the first
mortgage payment
is due.
This
is the interest
rate that
is paid from
the beginning
of the mortgage
to the end
of the initial
rate period.
This usually
relates to
fixed and
discount mortgages
which may
have an initial
rate of interest
lower than
the normal
variable rate.
At the end
of the initial
period the
normal variable
rate will
be payable.
The
amount of
return a lender
will receive
for lending
you money.
Used
for guidance
purposes only,
this figure
indicates
the interest
which is payable
on a typical
mortgage.
A type of mortgage where monthly payments only pay off the interest but do not pay off the amount borrowed. See 'Interest Only Mortgages' in our 'Mortgages Explained' section for a detailed explanation.
We
are an intermediary.
An intermediary
introduces
borrowers
to lenders
and can often
undertake
some of the
mortgage processing
for the lender.
We receive
a commission
from some
lenders for
completed
mortgages
introduced
to them. This
fee does not
in any way
affect your
mortgage.
See
Intermediary.
An
Individual
Savings Account.
This is a savings product with certain tax benefits and can be used to help pay off a mortgage. It
is essential
that you seek
independent
financial
advice when
considering
an ISA backed
mortgage.
The total
gross income
of two people
taking out
a mortgage
together and
jointly being
responsible
for making
the payments.
Describes the mortgage in a standard format so you can easily compare it with other mortgages.
LIBOR LAND REGISTRY LAND REGISTRY FEE LANDLORD'S REFERENCE LARGE TOWN ALLOWANCE LEASEHOLD (ENGLAND AND WALES ONLY) LEGAL (MORTGAGE) CHARGE LENDER LIFE ASSURANCE LIFE COMPANY LOAN CONSOLIDATION LOAN TO VALUE (LTV) LOCAL AUTORITY SEARCH LOCAL AUTHORITY SEARCH FEE LOW COST ENDOWMENT LOW START ENDOWMENT The
London Interbank
Offered Rate.
The interest
rate at which
banks buy
and sell money
from each
other and
which usually
changes every
day. You can
fix your mortgage
to LIBOR.
See 'Tracker
Mortgages' in our 'Mortgages Explained' section for a detailed explanation.
A
government
department
which keeps
and updates
records of
property ownership..
A
fee paid to
the Land Registry
by a borrower
to record
changes in
its records
of ownership
of the property.
An endowment
where the
premiums paid
at the start
are reduced
but where
later premiums
are increased
to compensate.
See Endowment.
Confirmation
given by a
previous landlord
stating the
history of
the payment
of rent and
of previous
conduct as
a tenant.
An
additional
payment made
on top of
basic salary
to an employee
working in
a large town
to cover the
additional
costs of living
and working
there. It
is usually
taken into
account by
mortgage lenders
when calculating
the amount
that can be
borrowed.
A
common type
of land ownership
where the
land or property
is owned by
someone else
(the Freeholder)
but is leased
to the occupier
for a fixed
period of
time, usually
for an annual
(ground) rent.
Usually
known as a
Legal
Charge. When
a mortgage
is taken out,
the bank or
building society
register an
interest in
the property
by taking
a legal charge
over it. You
will manually
have to pay
a fee to your
solicitor
to cover this,
typically
about £100.
The
organisation,
usually a
bank or a
Building Society
providing
the mortgage.
An
assurance
policy which
pays a lump
sum in the
event of the
policy holder
dying.
A
company issuing
life assurance,
authorised
and supervised
by various
Government
departments
see Debt Consolidation.
The
proportion
of the value
of a property
the lender
is willing
to lend, typically
70-90%.
An
activity carried
out by the
purchaser's
solicitor
to establish
the status
of the property
and whether
there are
any matters
such town
planning or
road building
schemes or
enforcement
notices which
affect it.
The
fee payable
to the Local
Authority
for the Local
Authority
Search.
See Endowment
An
endowment
where the
premiums paid
at the start
are reduced
but where
later premiums
are increased
to compensate.
See Endowment.
MIRAS MAIN RESIDENCE MAINTENANCE PAYMENTS MAISONETTE MORTGAGE DEED MORTGAGE SUBSIDY MORTGAGE TERM MORTGAGE VALUATION MORTAGEE MORTGAGOR MULTIPLIER Mortgage
interest relief
at source.
A tax relief
allowed on
mortgage payments
and applied
directly,
thereby reducing
annual payments.
MIRAS ceased
to exist from
April 2000.
The
normal property
where someone
lives, sometimes
referred to
as the principal
private residence.
Monies
paid or received
for a dependant
or to make
up income
under a Court
Order
A
flat or apartment
laid out over
more than
one floor
or with its
own entrance
at street
level.
see Deed.
A
payment made
by some employers
to employees
corresponding
to their mortgage
payments.
The
length of
time the borrower
has a mortgage.
The
cheapest and
simplest type
of property
survey and
the minimum
required by
lenders to
enable them
to judge the
suitability
of the property
for mortgage
purposes.
You will normally
receive a
copy of this
report. However,
it tells you
little about
the condition
of the property
and because
the valuation
is for mortgage
purposes only,
it provides
you with little
or no protection.You
should seriously
consider a
homebuyers
report or
a full structural
survey as
these are
more detailed.
The surveyor
should be
able to provide
you with details
and guidance.
The
lender - i.e.
a company
who lends
the money
to a borrower
secured on
the value
of the property.
The
borrower who
takes out
the mortgage.
see
Income Multiplier.
An
expression
which means
that the value
of a property
has fallen
below the
level of mortgage
loan secured
on it.
The
actual payment
a borrower
makes to a
lender each
month, excluding
any additional
fees and costs.
Up until April
2000 this
was after
an adjustment
for MIRAS
but this has
now ceased.
A
newly built
property.
This is different
from a flat
that has just
been converted
from a former
house.
Where
a mortgage
is taken out
without the
need for the
borrower to
prove income
Another
name for compulsory
insurance
or conditional
insurance.
The
normal value
of a property
assuming usual
market conditions.
Income
in addition
to basic salary.
See Existing Liabilities
PART CAPITAL AND INTEREST PAYMENT METHOD PAYMENT PROTECTION INSURANCE PENSION POLARISATION PORTABLE PREVIOUS LENDER REFERENCE PROFESSIONAL A
combination
of two types
of mortgage
where the
mortgage is
repaid partly
on a capital
and interest
basis and
partly by
another method.
Typically,
part of the
mortgage would
be paid off
using an investment
product such
as an ISA
or a pension.
The
way in which
the mortgage
is repaid
at the end
of the term.
see
Accident,
Sickness and
Unemployment
Insurance.
An
investment
product that
can be used
to pay off
a mortgage.
You should
take advice
from an Independent
Financial
Adviser when
considering
taking out
a pension or if
you are considering
a mortgage
repayable
by a pension
plan.
Under
the Financial
Services Act
(1986) an
investment
adviser is
either tied
(able to advise
on the products
of one company)
or independent
(able to advise
on products
from a range
of companies).
If
a mortgage
is portable,
you can move
it on to a
subsequent
property if
you sell the
property on
which the
mortgage was
taken out as long as certain conditions, such as that the new property has sufficient value, are met.
If you are
taking out
a fixed, capped
or discounted
mortgage and
think you
will move
within the
fixed/capped/discounted
period you
should ensure
that the mortgage
is portable
or be aware
that you could
face early
redemption
penalties.
If
you are taking
out a mortgage
and have had
one in the
past, it is
common for
your new lender
to ask your
old lender
whether you
kept up the
payments on
the loan.
People
who are employed
in certain
professions
such as Accountants,
Lawyers etc
are able to
borrow using
higher income
multiples
or even obtain
a slightly
better interest
rates as they
are seen as
safer borrowers
than some
other employment
categories.
This term used to apply to mortgages where MIRAS applied. Since MIRAS ceased
April 2000, it is no longer used
RATE TYPE REDEMPTION REDEMPTION FEE REGIONAL LENDERS REMORTGAGE REPAYMENT MORTGAGE REPOSSESSION RETENTION RIGHT TO BUY Is the term
used to describe
the main feature
of the mortgage,
ie
Fixed Rate
means that
your mortgage
repayment
is fixed.
Means the
repayment
of the mortgage.
When a loan
is redeemed
(paid off)
early, either
in part or
in full, many
lenders charge
a fee, particularly
if the mortgage
has a Fixed,
Discounted
or Capped
rate. See Early Repayment Charge.
Lenders that
restrict the
areas in which
they lend.
The term used
for a mortgage
that replaces
another mortgage,
i.e. the applicant
is not moving
home. He may
borrow more
or less money
than the current
loan.
see Capital
and Interest
Mortgage.
The term for
the legal
process by
which a borrwer
who has not
paid his mortgage
can be evicted
and the property
sold.
If there is
a fault in
the property
ie damp, a
lender may
retain part
of the mortgage
to ensure
that the applicant
carries out
the repairs.
This money
is repaid
to the client
when the repairs
have been
completed.
Sitting council
tenants can
be offered
the right
to buy their
property from
the council
usually at
discounted
rates. Some
lenders do
not assist
with these
types of property.
There are
usually restrictions
on when the
applicant
can sell the
property.
SEALING FEE SEARCH FEE SECOND CHARGE SELF-CERTIFICATION SHARED OWNERSHIP/EQUITY SITTING TENANT SOLE OCCUPANCY SOLICITORS FEE SPECIAL CONDITIONS SPECIAL RATE SPECIAL RATE PERIOD STAMP DUTY STEPPED RATE MORTGAGES STRUCTURAL SURVEY STUDIO FLAT SURVEY FEE see Discharge
Fee.
A fee charged
by the local
authority
to a solicitor
when they
request information
regarding
the property
to be purchased.
Generally
a mortgage
will be secured
with a first
charge on
the property,
this means
that if a
client defaults
on repaying
the mortgage,
the lender
has the first
right to sell
the property.
If the property
has sufficient
equity then
a client may
borrow against
this with
a second lender
who is prepared
to take a
second charge
and therefore
has second
call on the
sale proceeds
of the borrower
defaults.
A mortgage
where the
borrower advises
the lender
of his/her
income. The
lender does
not verify
the income.
Usually the
deposit required
by the lender
is higher.
A scheme offered
that allows
you to buy
a percentage
of your home
with assistance
from a shared
ownership
scheme. The
percentage
of the home
that you do
not own is
rented.
An existing
tenant who
has rights
over the property
according
to law. They
cannot normally be
evicted unless
they break
the law. Lenders
will not usually
assist with
properties
containing
sitting tenants
because of
the rights
they enjoy.
Means that
the property
is occupied
by the applicant
and their
direct family.
A fee charged
by a solicitor
for the work
they complete
on your behalf.
Conditions
applied to
your mortgage
offer that
are unique
to your application,
as opposed
to standard
conditions
that will
appear on
every mortgage
offer.
A term we
use to describe
the interest
rate applicable
with a Fixed,
Discounted
or Capped
rate mortgage.
The term we
use to describe
the period
when a Fixed,
Discounted
or Capped
rate applies.
A tax on the
purchase of
property based on the price paid. No
stamp duty
is applicable
on purchases
up to £60,000.
Above this level, the duty is: 1% of
the total
purchase if
it is above
£60,000 and
up to £250,000,
3% of the
total purchase
price if it
is above £250,000
and up to
£500,000 and
4% of the
purchase price
if it is above
£500,000.
Products where
the interest
rate changes
according
to a pre-set
pattern. See
Stepped Rate
Mortgages
in our 'Mortgages
Explained'
section.
This is a detailed and thorough investigation of the structure of a property.
The surveyor
will report
on the property
in great detail
and is responsible
for his/her report.
Full structural
Surveys are
not usually
available
on flats but
are recommended
on older properties.
They are not
to be confused
with a Structural
Engineer's
report that
comments on
the actual
fabric of
the building
and any defects.
A property
consisting
of one room.
Some lenders
do not lend
on this type
of property.
The fee payable
to arrange
the inspection
of the property.
Can be arranged
in three forms
- Valuation,
Homebuyers
Report and
Structural
Survey.
The length
of the loan.
Usually associated
with older
properties
and simply
means that
the frame
of the building
is made of
timber and
not of bricks
or concrete.
Some lenders
will not view
these properties
as valid security
for a mortgage.
The documentary
proof an owner
has the right
of possession
to land.
Insurance
against potential
loss resulting
from defects
of title to
a specifically
described
parcel of
property.
An investigation
into the history
of ownership
of a property,
carried out
by a conveyancer
or solicitor
to check for
unpaid claims,
restrictions
or problems
and to prove
that the seller
can transfer
free and clear
ownership
to the buyer.
A mortgage
where the
interest rate
exactly follows
another prescribed
interest rate,
usually the
Bank of England's
base rate,
plus a margin.
APR stands for Annual Percentage Rate. It is a term
set out under
the Consumer
Credit Act and is
designed to
reflect the
total charge
for credit.
The total
charge for
credit will
include the charges incurred in arranging the loan. So it not only includes the interest payable but other costs such as the mortgage valuation fee. The Typical APR is based on an example loan size, term and property value. The Typical APR assumes that the interest rate payable will not vary. Consequently, the actual APR may differ.
This is the
simplest and
cheapest form
of report
on the property
and is used
for the lender's
purposes.
The value
of the property
will be ascertained
and any major
defects noted.
A report of
this kind
is not carried
out for you,
but for the
lender. This
means that
if there is
a mistake,
you have no
legal right
against the
valuer. You
only have
the right
to take action
against a
negligent
valuation
if it is part
of a Homebuyer's
report or
a full survey.
Mortgages
where the
interest rate
is set and
continually
readjusted
by the lender
at its own
discretion.
The rate often
increases
in line with
bank base
rates, although
there is no
direct link.
Generally
speaking a
lender's variable
rate will
increase sooner
after an uplift
in the bank
base rate
than it will
decrease after
base rates
have fallen.
A conventional With Profit Policy offers a smoother return than many other forms of investment. Under these policies an annual bonus is usually added but is not guaranteed. The smoother investment performance is provided by the guarantee that once the bonuses are declared, they cannot be taken away. At the end of the policy term assuming the investment manager has been successful, the insurance company will usually declare a terminal bonus but this is not guaranteed. A unitised With Profit Policy annual bonuses are declared by a method similar to interest payments. The units grow at a predetermined rate during the year and if the Actuary is comfortable with the performance of the investments the rate may be increased or maintained. A terminal bonus could be paid as a lump sum at the end of the policy term or as further increases in the rate of bonus on units after a period of time, e.g. five years, this is not guaranteed.
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