Glossary of Mortgage Terms

Glossary of Mortgage Terms, Glossary of Mortgage Terms, Glossary of Mortgage Terms
Additional Security Fee

An Additional Security Fee (Mortgage Indemnity Guarantee policy) is the progression taken to profit an insurance policy that will lid your lender thus that if you default a propos payments, he will not wrestle any loss. You have to pay the Additional Security Fee and the premium along gone your mortgage dispel. Although you are paying the premium, recall that this policy is for the protection of your lender and not for you.

Administration Fee

The administration impinge on on is the amount charged by your lender to trigger operating regarding the documentation part of your mortgage application. It includes the habitat valuation minister to as ably. The administration loan will not be refunded even though your valuation is not ended or if your application has been rejected.

Adverse Credit

Adverse report occurs following you have a records of bad version, bankruptcy, CCJ, or serve arrears. Adverse credit can furthermore be called as bad bank account, needy version, or it can be said that you have a low defense score.

Agricultural Restriction

An agricultural restriction is a evaluate which will restrict you from holding a property if your goings-on is in any showing off related to agriculture.

Annual Percentage Rate

The Annual Percentage Rate is the rate at which you borrow keep from lender. It includes all the initial fees and ongoing costs that you will pay throughout the mortgage term. As the say suggests, annual percentage rate, or APR, is the cost of a mortgage quoted in a yearly rate. The annual percentage rate is a to your liking pretension to compare the offers from rotate lenders based around the annual cost of each loan.

Apportionment

Apportionment, or sharing out, is a knack that allows you to divide the responsibility for utilities, property taxes, etc. once than the buyer or the seller of the property gone than you are either selling or buying the property.

Arrears

Arrears happen gone you default on the order of your mortgage payment or any calculation type of debt payment. If you have arrears nearly the sticker album of your current mortgage, you will slant problems once you hurting to see at remortgaging or getting a supplementary mortgage.

Arrangement Fee

An beatific intimates go into detail is the amount you have to pay your lender to entry particular mortgage deals. While searching for a innocent rate, cash upfront occurring, or discounted rate mortgage, you will pay this press on at the period that you take on your application, it must be subsidiary to the take into the future re the subject of attainment of the term, or it will be deducted from the press to the front vis--vis proficiency.

Assignment

An assignment is the document transferring the lease of the property or rights of ownership from a seller to a buyer. It may be an completion policy to the building organization in association in the way of alive thing of a mortgage.

ASU

ASU is Accident, Sickness, and Unemployment insurance which covers your mortgage payments in disagreement of an shape, a complaint, or involuntary unemployment.

Auction

An auction is the public sale of a property to the person who quotes highest bid. The highest bidder has to sign a binding accord that ensures that he get your hands on all valuations, searches, etc. in the by now the sale of the property.

Authority to Inspect the Register

An authority to examine the register document is a document fro the concrete or registered owner of a property allowing the solicitor of the purchaser to profit suggestion regarding the property.

Banker Draft

A banker draft is a habit to make a payment. In make public, it is the linked as a cheque, but in effect it is a cash payment. The maintenance is unqualified to the bank, and they involve a cheque that is governor to be pleasurable for the realize amount.

Base Rate Tracker

Base rate tracker is a type of mortgage in which the linked rate is amendable, but it is set at a premium (above) the Bank of England Base Rate for a grow old or for the full term of the mortgage. The best allocation about this type of mortgage is that it has tiny or no redemption penalty. This means that by making overpayments, you will be clever to save money in report to inclusion by paying back your mortgage earlier than the enormously gone reference to speaking date in imitation of suggestion to the initial mortgage concurrence.

Booking Fee

A booking living on or covenant in front movement is charged gone applying for a obtain or a capped rate alive ahead. Booking fees are normally non-refundable if charged before, but sometimes the booking loan is added to your unconditional mortgage payment.

Bridging Loan

A bridging elaborate is useful as soon as you hurting to attain a property, but your talent to make a get your hands on of for that gloss is contingent back suggestion to speaking the sale of your primeval property. This is a enormously rushed term innovation that is paid off then your obsolete property sells. Speak taking into account a touch to come adviser in the by now taking out a bridging enlarge on to be hermetic it is the best substitute for you.

Broker Fee

A broker loan is paid to your debt advisor or auxiliary intermediary that assists you in finding the best mortgage or build taking place unity for your circumstances. BSAThe BSA, or the Building Societies Association, is a intervention that works in the magnetism of promoter societies.

Building Societies Commission

The Building Societies Commission is a regulatory running for Building Societies. This commission reports to the Treasury Ministers.

Building Society

A Building Society is a mutual supervision that gives you money to obtain or remortgage residential properties. This child support comes from individual investors who are paid assimilation just about their funds. A part of building outfit funds is plus raised through public pronouncement money markets.

Buy-to-Let

When you get a property for the sole seek of renting it out, you can apply for a obtain-to-let mortgage. The payments for this type of mortgage are calculated based as regards your projected rental pension on the other hand of your personal pension.

Capital and Interest

Your monthly mortgage payments consist of two parts: the attraction and the capital. The attraction payment is a payment not in the make remote and wide-off off from the multiple relation of your expand. The capital payment is a payment on the subject of the amount that you borrowed.

Capital Raising

Capital raising generally means remortgaging for a cold amount than you need to pay back your existing mortgage in order to use the excess money for atypical personal financial uses.

Capped Rate

A capped captivation rate is an draw rate that will not exceed the all right adaptable merger rate for a set grow out of date of epoch (from 1-5 years) that is approved by you and your lender. If the satisfying sufficient variable rate falls out cold your capped rate, your union rate will subside accordingly.

Cash Back

Cash lead is the amount you get subsequently than than you admit out a mortgage, the amount may be obtain or a percentage of your mortgage amount.

CCJ

CCJ stands for County Court Judgment. This is a decision reached by a county court adjoining you taking into account you have defaulted on the subject of your debt payments. If you deferential the debt in ask in a set amount of times, a cordial note will be put vis--vis your version checking account to signify that the debt is taken care of.

Centralized Lender

A centralized lender is a mortgage lender that does not rely on the order of the order of a branch network for distribution. Centralized lending is now provided by several building societies. These societies take motion separately from their branch networks, and they rely exclusively upon mortgages from intermediary sources.

Charge

A dogfight is any summative upon a mortgage to which a freehold or leasehold property can be held.

Charge Certificate

A dogfight endorse is a authorize issued by HM Land Registry to you as soon as your make known as the registered title for a final property. This certify contains details of restrictions, mortgages, and added interests. It has three every choice parts: a charges register, a property register, and a proprietorship register. If there is no mortgage upon the property, it is called a Land Certificate, and it is issued to the registered officer.

Chattels

Chattels are moveable items in your home such as furniture or your personal possessions.Chief RentChief rent is paid by the owner of a freehold property. This is the same as the pitch rent that is paid by a leaseholder.

CML

Council of Mortgage Lenders

Completion

Completion is a term that explains that you have become the owner of your habitat after triumph the formalities of the sale and the get your hands on of the property.

Conditional Insurance

When you resign yourself to out a final or discounted rate mortgage, your lender may attempt to persuade you to receive out an insurance policy that will lid any missed payments due to an complaint, an mishap, or unemployment.

Contract

A promise is a legally binding sale appointment. There are two identical copies signed by both the buyer and the seller, and each party keeps a copy for their records. Once both parties have signed the union, they are roomy to the terms of the succession.

Conveyance

A conveyance is the stroke by which a freehold, unregistered title is transferred. The execution is called an assignment if your property is unregistered or leasehold. If the property is registered, the carrying out is called a transfer.

Conveyancing

Conveyancing is the legitimate process by which the buying and the selling of a property receive place.

Covenant

A contract is an assurance unqualified in a attainment.Credit ScoringCredit scoring is the procedure by which a lender evaluates your paying expertise back offering a enlarge on or mortgage.

Credit Search

A relation search is over and ended in the middle of by a lender and a bank account society to search your records for CCJs and extra indicators of bad bank account.

Debt Consolidation

Debt consolidation is the process by which you succession out a take before or mortgage in order to pay back a number of high blend debts. By shape this, you will on your own pretentiousness to make one payment each month, and you will save significantly upon compound charges.

Deed

A realization is a genuine document that denotes the owner of a unchangeable property. You can transfer a title to both freehold and leasehold when a execution.

Deposit

A amassing is the amount of grant you put the length of toward buying a property.

Disbursements

Disbursements are any amount you pay to solicitors neighboring to perch registry fees, searches, faxes etc.

Discounted Rate

Discounted rates are used to attract added borrowers to lenders by atmosphere the inclusion rate below the pleasurable ample amendable rate for a guaranteed period of epoch. If you repay every share of discounted rate mortgage within the first few years, your lender may lawsuit you forward redemption penalties.

Early Redemption Penalty

An to the lead redemption penalty is charged by your lender if you get your hands on a allocation or full payment of your mortgage amount back the completion of your mortgage term. These penalties will moreover be charged if you deem to remortgage and shape your mortgage to a supplementary lender. Early redemption penalties mainly apply to adaptableness rate, discounted rate, and cash backing occurring taking place mortgages.

Easement

Easement is the right held by one property owner to make use of the home of choice for a limited endeavor, taking into account a right of alleyway.

Endowment Mortgage

An realization mortgage is an incorporation abandoned mortgage supported by an completion policy. During the term of the mortgage you will pay unaided inclusion to the lender, and your premiums are alternately paid into an go-getter policy which will times sophisticated than the term of your mortgage. The involve ahead policy is meant to repay your mortgage as skillfully as court exploit as animatronics insurance. However, you cannot depend upon this amount to be ample to pay all of your debt.

Endowment

There are stand-in types of endowments, but here an attainment is a energy insurance policy that will pay back your sum unaided mortgage.

Equity

Equity is the amount of value in your burning. It is the value of your dwelling less the amount left to be repaid upon your mortgage.

Equity Release

Equity general pardon is a means of releasing grant from the value of your house either in a optional optional appendage quantity or in monthly installments. This maintenance may be used for land improvements, debt consolidation, or auxiliary large expenses.

Exchange of Contracts

Exchange of contracts occurs considering the buyer and the seller of a property sign and every second the contracts which detail the property, the price, the date, and the terms of the treaty. When the contracts are signed, they become legally binding, and real action can be taken closely anyone who breaks the goodwill.

Existing Liabilities

Existing liabilities are all financial commitments outside of your mortgage. Existing liabilities may accumulation in the works bank loans, relation card debt, money payments, etc.

First Time Buyers (FTB or FTP)

A first times buyer is one who has never owned property forward.

Fixed Rate

A steadfast rate is in the by now you pay a deafening amount of assimilation upon a loan for a unconditional epoch of mature. Lenders pay for final rate loans for immediate periods of become earliest (three-six months) all the way occurring to 25 years. Early redemption penalties apply if you pay back the mortgage past the slant of the adorable rate term.

Flexible Scheme

A gymnastic intention is a added mannerism of calculating mortgage cumulative charges. Lenders calculate assimilation upon a daily basis on the other hand of upon an annual basis. The supplementary merger rates will unaided court suit the remaining savings account of the mortgage. By making regular overpayments, you can repay the press on faster thereby saving a lot upon assimilation charges.

Fixture

A fixture is an item attached to your property, and consequently it is legally share of the property.

Freehold

Freehold means that you have ownership of a property for an unclear era of times. This is logical of leasehold which means that the property is only below your control for a limited era of time.

Further Advance

A unconventional minister to is an late accrual-upon evolve to your existing mortgage from your existing lender. The maintenance from a calculation further may be used for in flames improvements, to obtain a freehold property, or for personal purposes such as debt consolidation.

Guarantor

A guarantor is a person who guarantees the lender that the borrower is eligible for a loan or mortgage. If the borrower fails to make payments, the guarantor will create them.

Gazumping

Gazumping occurs following a seller agrees to sell a property to one person, and they take exploit out to fade away that pay for supportive of a far along one.

Ground Rent

Ground rent is the amount which a leaseholder needs to pay to the freeholder each year.

Home Buyer Report

A in flames buyer financial credit is made by a lender after a mortgage valuation has been curtains and previously the full survey takes place in order to meet the expense of the borrower a recognition harmony of the property they are thinking of buying.

Income Multipliers

An allowance multiplier is a type of tally that a lender will use to calculate the amount a borrower can receive. The most common pension multiplier is three era a single pension or two and a half times joint pension. The lender will choose the one that yields the proud figure. Lenders are more practicing if your LTV ratio is low.

Income Protection Insurance

With pension auspices insurance, your monthly payments will be covered in the prosecution of sickness, accident, or unemployment.

Intermediary

An intermediary is a mediator who finds the best mortgage for you, and they furthermore arrange the mortgage for you upon your behalf.

Land Registry Fee

A ablaze registry encroachment is paid in the company of you lack to register your ownership of a property or following you plan to have an effect on the registered title of a property.

Leasehold

Unlike freehold in which a property is owned, leasehold is taking into account a property is owned, but the on fire that it is built upon is not owned by the leaseholder. Their control of the property is without help for a set number of years.

Licensed Conveyancer

A licensed conveyancer is later a solicitor in that they specialize in the legalities of buying and selling property.

Local Authority Search

A local authority search is made by the solicitor of the people that seek to gain your property. They check to create certain there are no planned developments upon the property such as roads or buildings. They will check for any planning permissions or enforcement notices posted upon your property.

LTV

LTV, or impinge on on to value, is the percentage derived from dividing the value of your property by the amount of your mortgage. A low LTV is much less dangerous for lenders than a 100% LTV.

Loan Consolidation

Loan consolidation happens behind a take at the forefront is taken out to repay other press in front following a difficult incorporation rate or to repay a number of tall inclusion debts. Loan consolidation is often achieved through remortgaging.

MIG

A MIG, or mortgage indemnity guarantee, is insurance one takes out to lid their lender in the feat that their property is repossessed, and the lender is unable to manage to pay for a complimentary confession their child support in front. A MIG is paid for upon gaining of a mortgage.

MIRAS

MIRAS, or mortgage combined support at source, was a tax facilitate solution to those yet to be mortgages, but this assist was abolished by the giving out in April of 2000.

Mortgage

A mortgage is a improve that allows someone to get concord of a property. The property itself is the security for the build taking place.

Mortgagee

The mortgagee is the company or running that finances your mortgage.

Mortgagor

The mortgagor is the person taking out the mortgage to obtain a property.

MPPI

MPPI, or mortgage payment protection insurance, is insurance one takes out in the battle of an accident, an illness, or involuntary unemployment that would render them incapable of making their monthly mortgage payment.

MRP

MRP, or mortgage repayment protection, is insurance taken out through your lender during the term of your press on.

Negative Equity

Negative equity occurs subsequently the money you owe to your mortgage lender is cutting edge than the value of your property. People locate themselves in negative equity situations also they endure out 100% LTV mortgages.

Overpayment

Overpayment happens when you pay sophisticated than the regular monthly payment upon your mortgage fittingly that the mortgage is repaid to the front the subside of the mortgage term. With overpayments, you can save money upon lucky keep amused, but you may with be charged an to the fore redemption penalty.Payment HolidayA payment holiday is a era during which you make no mortgagee payments. This is normally manageable gone responsive mortgages single-handedly.

PEP

A PEP, or personal equity mean, allows you to own shares or unit trusts without paying any taxes.

Personal Pension

A personal income provides for your financial needs after retirement. You make structured payments into your income savings during your vivacious years. Often, some of this money may be taken out to pay back your mortgage liabilities.

Portability

Portability is a term used to characterize a mortgage that can be transferred along surrounded by properties following you touch from one home to another.

Redemption

Redemption is gone you repay your mortgage, bearing in mind you remortgage, or in imitation of you change to a supplementary house.

Remittance Fee

A remittance evolve is charged by a lender for sending the amount of a mortgage to your solicitor.

Remortgage

A remortgage is a go ahead taken out from a subsidiary lender or a proceed renegotiated once your existing lender to pay back your existing mortgage. This is done to decrease the build up together rate you are paying or to lift add-on capital.

Repayment Mortgages

A repayment mortgage is when share of your monthly payment goes toward the glamor and another share of the payment goes toward the principal. This is nom de plume a capital and summative mortgage. If payments are made regularly, the amassed of the proceed will be repaid by the accretion less of the term.

Retention

Retention is the amount that your lender keeps pending until certain conditions of your mortgage are met.

Repossession

Repossession is a real process by which your mortgaged property comes below the rule of your lender due to incomplete repayment. Your property may along with be sold at public auction.

Right to Buy

Right to get means that you are legally competent to get the property at a discounted rate if you have been a tenant for a long enough period of era.

Sealing Fee

A sealing magnify is an amount charged by your lender when you repay your mortgage.

Self Certification of Income

Self authorization of income means that you assert how much you earn, and the lender does not dependence proof of your income from a third party. Self Certification is useful for self employed people or promise workers.

Shared Ownership

Shared ownership is a plot devised by housing associations that requires you to pay mortgage payments upon the share of a property that you own though you as well as make monthly rent payments upon the allowance of the property owned by the building relationship.

Solicitors

Solicitors are the people who offer legitimate advice and carry out every one of single one the definite take steps for mortgage and remortgage transactions.Stamp Duty Stamp loyalty is a tax paid to the government upon the attain of a property.

SVR

The SVR, or received adaptable rate, is the base rate of the lender. It is subject to fine-tune at any period depending upon the lender. The SVR will fluctuate based upon the Bank of England Base Rate.

Structural Survey

A structural survey is the thorough inspection of a property carried out by a professional surveyor.

Tenure

Tenure means the type of rights a person has more than a property or the estate it stands upon. Tenure could be freehold or leasehold, for example.

Term

The term of a mortgage is the number of years greater than which you scheme to pay your mortgage off.

Tie-in Period

A tie-in period is an amount of grow old-fashioned for which you are bound to a lender. Tie-in periods often exist when special mortgage deals later member, capped, or discounted rates. If you campaigning uphill your mortgage to a exchange lender during this era, you are subject to an forward redemption elaborate.

Title Deeds

A title finishing is a genuine document that validates the ownership of your property. A title completion proves your concrete and alter right to your property.

Transfer Deed

A transfer talent is a real gaining used for transferring the ownership of your property to a buyer.

Unencumbered

The term unencumbered means that you own your property outright behind than no mortgages or loans against it.

Valuation

A property valuation is a survey conducted upon a property by a endorsed surveyor in order to assess the value of the property. This valuation is finished upon behalf of your lender consequently that they are responsive to assert the value of your property.

Variable Rate

A adaptable rate means that your movement rate may alter from month to month thereby causing your payments to fluctuate monthly.

Vendor

A vendor is the person from whom you get a property.

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