The mortgage loan.
The mortgage loan.
The total cost of a loan, including interest charges and product fees, shown as a percentage rate. The calculation assumes that you keep the mortgage for the full term. APR is the industry standard calculation and allows you to directly compare mortgages from all lenders.
The transfer of a lease
This is a charge made by the lender to reserve the mortgage and to cover administration costs. Lenders can change the cost of these fees at any time during the year.
The Bank of England set a rate each month known as the ‘Base Rate’ or ‘BBR’. This rate can go up or down from time to time and is announced by the Bank of England’s Monetary Policy Committee. Banks and Building Societies use the Bank of England Base Rate to set the interest rates they pay on deposits, or charge on debts.
These variable rate mortgages track above or below the Bank of England Base Rate, with rates moving up or down as the base rate changes.
This is usually a short term temporary loan advanced to help you buy a new property before you have completed the sale of your existing one. Bank and Building Societies charge a high APR which reflect the risks involved i.e. can the borrower effectively take on a second home loan if they fail to sell their first property?
Insurance against the cost of rebuilding your property and any permanent fixtures and fittings (such as a kitchen/bathroom) following structural damage, such as by flood, storm or fire.
The health and safety requirements that any new construction must meet.
A professional review giving a technical report following an inspection of a property. It will give you a comprehensive account of the condition of the property, describing any structural or other defects.
Mortgages designed for investors who are buying property for the purpose of letting it to tenants.
Also called a repayment mortgage; your monthly payment covers the interest charged for the loan and also repays part of the money borrowed. In the early years of your mortgage term, the bulk of your monthly payment is interest. However, in time, as the mortgage balance reduces so does the proportion of interest. Assuming that you maintain the payments, the mortgage will be repaid at the end of the mortgage term. the end of the mortgage term.
A lump sum paid to your mortgage account in addition to your normal monthly payment.
A mortgage with a maximum (or capped) limit on the interest rate you’ll pay during a given period.
Some mortgage products offer you a lump sum cash amount on completion of your mortgage. This can be either a fixed sum or a proportion of the loan. Sometimes you may have to pay this amount back if you pay your mortgage off early.
A term commonly used to describe the series of properties linked to your sale or purchase by your buyer and your seller.
The electronic payment of funds, in cleared form, by one bank to another
When you have exchange contracts on a property, you’ll agree a date for completion with everyone involved. Completion is achieved only when the ownership of the property has legally passed to the buyer and when the seller hands over the keys.
A legal term of the contract governing the purchase
Insurance against accidental damage or theft of your contents, such as TV/electrical equipment, furniture and furnishings, whilst they’re in your home.
A legally binding document that describes the agreement under which the property will be sold.
A legal practitioner who specialises in property sales/purchases. An alternative to using a Solicitor.
The legal and administrative requirements involved in buying/selling a home.
These are the fees incurred and charged by your solicitor or conveyancer for managing the sale or purchase of your home; including the fee for their time plus any additional charges incurred such as Land Registry or Local Authority Searches.
Council of Mortgage Lenders is a trade association for the mortgage lending industry.
Rules and conditions contained in the deed that relate to the use of the property.
This is used by most mortgage lenders to help them decide whether to grant you a loan. Your credit score will be based on your credit history i.e. your past history of repaying loans/mortgages/credit cards/hire purchase agreements etc.
Most Mortgage lenders will use this method of calculating mortgage interest. This is where interest is charged on the amount of mortgage outstanding on a daily basis i.e. lenders take into account any changes in the amount you owe on a day-to-day basis.
Legal documents that confirm ownership of a property or piece of land.
A percentage of the purchase price which the buyer pays to the seller (on exchange of contracts) in order to secure the purchase of the property.
All the various costs for carrying out the legal work related to buying or remortgaging your home, which are itemised on your conveyancers invoice.
For an agreed period, discount mortgages give you a discount off the lenders Standard Variable Rate (SVR). The discount will be set at a certain percentage below the standard variable rate and the interest rate will move up and down in line with the variable rate.
A charge payable on some mortgages if they are repaid early. The amount depends on the mortgage outstanding and the terms of the mortgage.
A mortgage covered bay a policy that is designed to pay off the capital owed on the mortgage by the end of the term od the mortgage
The difference between the amount you owe on your mortgage and the current value of your property.
A way of releasing money from the value of your property (subject to conditions set by your mortgage provider.
When both the buyer and sellers conveyancer exchange the signed copies of the contract . In England and Wales, but not in Scotland, this is when everybody is legally bound to the transaction and when the buyer should take out buildings insurance.
A Government appointed independent ombudsman which was set up to help settle individual disputes between consumers and businesses providing financial services such as estate agents, solicitors and insurance companies.
The regulatory authority for the UK financial services industry. All lenders and mortgage intermediaries must be directly authorised and regulated by the FSA.
A rate of interest guaranteed not to change over a fixed period of time.
All non-structural items included in the sale of a property.
Allows you to make mortgage overpayments, and borrow back any mortgage payments that have built up, take payment holidays or pay less in some months.
A legal title to land which means you have outright ownership of the land on which your property stands
A professional review that looks at all the main features of the property, all structual walls, roof, foundations, plumbing, electrical wiring, drains etc.
The transfer of money from one financial institution to another. This often occurs at completion when the money for your purchase or sale is transferred to your buyer or seller.
An additional loan to your existing mortgage taken after the main mortgage has completed. This is also secured against the property.
Every homebuyer’s nightmare! When the seller accepts a higher offer from someone else, after already agreeing a price with a buyer.
When the buyer offers less than the agreed price before the exchange of contracts.
The annual fee which a leaseholder pays to the freeholder.
Someone who guarantees to repay the mortgage if the borrower can’t or won’t for any reason. Guarantees are usually entered into where the borrower’s circumstances would not allow them to borrow enough to buy the home they want. For example, parents may act as guarantors for their children when they buy their first home.
The higher lending charge, formerly known as a mortgage indemnity guarantee (MIG), Fee or premium sometimes charged by lenders if your mortgage represents a high percentage of the propertys value. This fee may be used by the lender to purchase an insurance policy designed to protect it (the mortgagee) against loss in the event of you defaulting on your mortgage.
This is a property survey report which has more information than a mortgage valuation but is not as detailed as a full structural survey report. This report is used by the lender in place of the mortgage valuation report and provides more information in order that the borrower can reach a decision on whether or not to purchase.
A Government scheme introduced for 4 bedroom homes, with effect from 1st August 2007, and 3 bedroom homes with effect from 10th September 2007. This means that all homes in England and Wales with 3 or more bedrooms will need a Home Information Pack (HIP), which includes a home energy rating. The Pack includes an Energy Performance Certificate (EPC), containing advice on how to cut carbon emissions and fuel bills. Also included are documents such as a sale statement, searches and evidence of title. *It is expected, at some stage in the future, that all homes for sale will have to provide a HIP pack, regardless of size.
A way of referring to both buildings and contents insurance.
The charge made by lenders when you borrow their money.
You pay interest to your lender throughout the mortgage term but your mortgage balance does not reduce.
A Shariah compliant Home Finance solution that allows Muslims to finance the purchase of a home in a way that is within the laws of their faith.
A mortgage with more than one named individual responsible for repaying the loan.
More than one estate agent has been appointed to jointly work together to sell a property. Any commission received is split equally between all of the agents appointed joint sole agency contracts.
A government department which maintains the national property register for England and Wales.
A fee charged to register your details in the Land Registry records once you’ve bought a property or changed lenders.
If you are a leaseholder, you own the property for a set number of years but someone else owns the land it is built on. The term of a lease can vary from six months to 999 years.
Any person or company who offers to lend you money for an agreed period of time. In return, you will have to repay the loan and the interest. The company that gives you your mortgage is a lender.
Insurance which pays out on the death of the policy holder. Policies can run alongside your mortgage and will pay off all or part of the outstanding debt if you die.
Part of the conveyancing process when you buy a property. This includes a search of the local area to highlight anything that may affect the property or surrounding area, such as road improvements, and details any planning permission given for the property such as planned road building and planning permissions.
The amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £180,000 on a purchase price of £300,000 would be 60% LTV. If the valuation of the property is lower than the price you’ve agreed, the LTV will be based on the valuation.
A company formed to comply with a landlords’ obligations under a lease
A loan used to purchase a house. The loan is secured on the house.
A legal document relating to the mortgage lender’s interest in the property.
An insurance policy designed to provide a regular income to pay your mortgage if you become unemployed or unable to work.
The length of time over which the mortgage is to be repaid. Often this is 25 years but it can be shorter or longer.
This type of contract is used to appoint more than one agent. Commission is usually higher but only paid to the agent who is responsible for the sale of the property.
When the value of the mortgage oustanding is more than the market value of the property.
National House Builders Council. The NHBC provide a ten year warranty against major structural defects for new properties.
This means that at the end of your promotional period, you will not have to pay an early repayment charge if you pay off your mortgage early.
A repayment method which allows you to pay off the capital and interest on one part of the mortgage, and only the interest on the other part.
Mortgage payments which have not been paid as requested and have become overdue.
With some mortgages you can arrange to stop making payments altogether for a limited period agreed with the lender and up to your agreed borrowing limit.
The term used by estate agents, solicitors and lenders for the buyer of a property.
A purchaser who is prepared and able to exchange unconditional contracts for the purchase of a property. Commission has to be paid to the agent even if the vendor pulls out of the sale of the property.
Money requested by a landlord for repairs and maintenance to a property.
The estate agent appointed is the only agent that has the right to sell a property.
The agent can charge commission irrespective of who sells the property.
Legal expert handling all documentation for the buying and selling of your property (an alternative to using a Conveyancer)
Checks carried out during conveyancing to discover any planning proposals or anything else which might affect the future saleability of the property.
A government tax that varies according to the value of you property. The percentage you pay varies according to the value of the property.
A mortgage lender’s main interest rate, which fluctuates with changes in the base rate.
See Building Survey.
An assessment of the essential framework of a building
The length of time over which you pay back your mortgage, normally 25 years.
Documents to prove you own your property.
A variable rate mortgage that tracks the Bank of England Base Rate (BBR) at a percentage above or below with rates moving up or down as the base rate changes.
A Bank or Building Society charge for valuing your property.
The seller of a property or piece of land.