A
Accident, Sickness, Unemployment
Insurance (ASU)
This policy pays a percentage of the monthly
mortgage payment if you cannot work because
of one of the above instances. It only covers
specific incidents and will only be paid for
a pre-defined period. More
Adverse Credit
A term used to describe someone who has a
history of poor credit transactions and has
missed or made late payments on their credit
commitments, sometimes resulting in defaults,
County Court Judgements and bankruptcy. (Click here for adverse credit loans and mortgages)
Agreement In Principle (AIP)
Agreement from the lender that the mortgage
is approved, subject to the valuation report
and satisfactory references.
Annual Percentage Rate (APR)
This is the true interest rate including the
total charge for credit. It is useful for
comparing the cost of credit as it includes
not only the interest rate but also any related
fees and charges.
Application Fee
Covers the cost of undertaking a valuation
of the property.
Arrears
Usually measured in months or £s, this
is the measure by which mortgage repayments
are behind schedule.
B
Bank Base Rate
The base rate of the Bank of England as determined
from time to time by the Bank's Monetary Policy
Committee. You will pay interest in two components
- the base rate plus a pre-determined, non-variable
margin.
Bankrupt
A term used to describe someone who has been
relieved from the payment of all their debts
by a court order after surrender of all their
assets.
Bankruptcy
The court proceedings which relieves a debtor
who owes more than his/her assets by transferring
his/her assets to a trustee appointed by the
court
Basic Income
Gross pay before any deductions of Tax and
National Insurance.
Broker
(Also known as an intermediary) A person who
brings parties together and assists in negotiating
terms.
Buildings Insurance
A policy to cover the cost of repairing or
rebuilding your property following its damage. More
Buy to Let
A mortgage for when a property is bought as
an investment and rented out to a tenant who
pays the borrower a rental income. More
C
Capital Raising
The process of raising money from the equity
in your home for other purposes, such as another
property purchase, home improvements or debt
consolidation.
Chain
When a buyer is also selling a property a
chain is created. This means that there is
more than one party involved in the transaction.
Charge
A legal Charge is the right to acquire the
property. A mortgage lender will generally
have a first charge over the property. If
the borrower defaults on the loan, the holder
of the first legal charge has priority on
selling the property to discharge its debt.
Commitments
Charges which a person has committed to pay,
which could include mortgage payments, maintenance
payments, car loans or any other loan or credit
payments.
Completion
The date when the buyer's solicitor forwards
the cost of the property to the seller's solicitor.
The buyer becomes the legal owner of the property.
Contents Insurance
A policy to protect your home contents from
damage, loss & theft. More
Conveyancing
The process of transferring legal ownership
between buyer and seller, normally carried
out by a solicitor.
County Court Judgement
An adverse ruling for debt recorded against
a person by a creditor in a county or higher
court. This will be shown whenever that person's
credit history is checked.
Credit Reference Agency
An organisation that collects financial and
public records information about payment records
of individuals.
Credit Search
Using a reporting system to check an individual's
credit history. This could include searching
against CCJs, credit card payments, outstanding
debts or arrears.
D
Debt Consolidation
Borrowing a larger amount of money in a single
loan from one lender in order to repay several
smaller debts. More
Deeds
The legal document conveying title to a property.
Default
The registration of a default notice on credit
registers, normally by lenders, following
non payment of loan repayments.
Deposit
Money the borrower is putting down towards
the transaction, i.e. the difference between
the purchase monies and the mortgage amount.
Discharged Bankrupt
After being declared bankrupt for a number
of years, a person can be relieved of liability
by a court and is then a discharged bankrupt
and can apply for credit again.
Discounted Rates
A guaranteed reduction in the interest rate
for a pre-determined period of time from completion.
Great British Finance Mortgages discount rates to a set
date.
Disbursements
Fees that a solicitor has to pay on behalf
of their client (e.g. searches, stamp duty,
land registry charges etc) which are normally
added to the client's bill.
E
Endowment
A policy designed to give a maturity value
at the end of the term sufficient to repay
the loan (used in conjunction with an interest
only mortgage). Whether there are sufficient
funds to repay the mortgage at the end of
the term depends on the performance of the
endowment policy.
Equity
The difference between the value of the property
and the loans secured on it.
Exchange of Contracts
Both buyer and seller are legally bound to
proceed when contracts have been signed and
exchanged between the solicitors of all parties.
F
First Time Buyer (FTB)
A person who has never previously owned a
property. More
Fixed Rate Mortgage
This guarantees a fixed rate of interest for
a set period of time. More
Freehold
A property where you own both the building
and the land on which it is built.
Further Advance
Where another mortgage is given on a property
by an existing lender. Typically used for
home improvements. More
G
Gifted Deposit
A non-repayable sum of money given to help
provide the deposit to purchase a property.
H
Home Buyers Report
A type of property survey, which is more detailed
that a mortgage valuation, but less detailed
than a structural survey.
I
Impaired Credit
See adverse credit
Income Multiple
Great British Finance Mortgages use a multiplier against
the borrower's income to help assess the amount
they can borrow.
Independent Financial Adviser
A person qualified to carry out financial
planning and recommend financial products,
such as insurances/investments or pensions. More
Interest Only
When only the interest payments on the loan
are paid during the term of the loan. No payments
are made to reduce the capital balance outstanding.
Intermediary
See broker
J
K
L
Land Registry
The Land Registry holds all the ownership
records of all registered land and property.
Also it holds information on any mortgages,
charges, cautions and restrictions on all
registered land and property.
Land Registry Fee
A fee which is incurred when the property
is registered at the land registry.
Leasehold
Granted by the freeholder - they give the
legal right to live in the property for a
set period of time.
Legal Charge
Document held at the land registry documenting
who has a charge on your property.
Life Assurance
A policy that pays a lump sum on the death
of a policyholder.
Loan to Value
The ratio of the total loan amount against
the value of the property. For example on
a property valued at £100,000 a loan
amount of £80,000 would make a LTV of
80%.
Local Search
A check carried out by the solicitor of Local
Authority plans, to see if there are any developments
taking place in the area which could effect
the future value or saleability of the property.
M
Main Residence
If a person owns more than one property, this
is the one they spend the most time in.
Mortgage Advance
The amount of money agreed to be lent to you.
Mortgage Deed
The legal document by which the lender has
a charge over the property.
Mortgage Payment Protection
See Accident, Sickness and Unemployment Insurance
section. More
Mortgagee
The lender.
Mortgagor
The borrower.
Multi-Occupancy
A property will be classed as having multiple
occupancy if there is more than one resident
having their own "Assured" Shorthold
Tenancy" (AST), their own bedroom, and
sharing communal area, bathroom, kitchen,
living room.
N
O
P
Q
Quotation
An illustration showing the monthly repayment
on a mortgage along with any other costs or
charges that apply.
R
Redemption
When a mortgage loan is paid off completely.
Redemption Charge
A redemption fee is set by the lender that
the borrower must pay if they wish to repay
their loan before a set period had elapsed.
Repayment Method
The way that a mortgage is being repaid, for
example Capital & Interest or Interest
Only.
Repayment Mortgage (Capital &
Interest Mortgage)
A mortgage where the monthly payments are
made up of part interest and part capital
repayment.
Repossession
The legal process by which a borrower is deprived
of his/her interest in the property as a result
of mortgage arrears. This usually involves
the property being sold and the debt to the
lender being repaid.
Retention
A sum of money held back from the original
loan amount pending completion of outstanding
repairs or improvements to the property as
specified by the valuer.
Right to Buy
This occurs when a tenant in a council property
is given the opportunity to purchase their
home at a discounted price. The amount of
the discount depends on how long they have
lived in the property. More
S
Second Charge
Occurs when there is already one loan against
a property and another lender wants to secure
additional borrowing against the property.
The second lender's rights over the property
are secured after the first lender's. This
means should the property be repossessed,
the second lender will not receive any money
until the first lender has been fully repaid.
Self Certification
If it is difficult to provide substantiated
confirmation of your income, you can choose
to self certify your income by signing a declaration
stating your income and that you can afford
the loan repayments.
Sitting Tenant
A person who currently rents a property that
they are now purchasing.
Special Conditions
Requirements on the mortgage offer that must
be met before completion.
Stamp Duty
A tax payable on the purchase price of a property.
Structural Survey
A thorough examination of the property by
a qualified surveyor.
Studio Flat
A one roomed flat, normally with a bathroom
and separate kitchen. Great British Finance Mortgages will
consider applications on these properties.
T
Term
The length of time a mortgage is taken out
over.
Title Insurance
Title Insurance is a single premium indemnity
policy which is issued in favour of an owner
of a property, a mortgage lender or both.
It does not matter whether the title concerned
is freehold or leasehold, registered or un-registered.
U
Unencumbered
A property without any borrowing against it.
V
Valuation
A written response from the valuer to determine
if the property is a suitable risk for the
lender. This is for the lender's purposes
only, if you would like a more detailed report
you can request a Homebuyers report or a full
structural survey.
Vendors Deposit
The seller agrees to sell the property to
the buyer for a certain amount. The agreement
includes a separate discount on the purchase
price. This means the seller is paying part
of the deposit.
W
X
Y
Z
|
