Home

 

Mortgage On Line Quote

 

Independent Mortgage Advice

 

Endowment Alert

 

Mortgage Repayment Insurance

 

Home Insurance Quote

 

Mortgage Calculator

 

Useful Information

 

Jargon Buster

 

 

 

WE CAN ARRANGE YOUR MORTGAGE  click here

Advance The mortgage loan. We arrange this for you.

 

APR Annual Percentage Rate. This takes into account up-front and ongoing costs associated with taking out a mortgage.

 

Arrangement Fee This is normally charged by the lenders for arranging a fixed, capped or cash-back mortgage.

 

ASU Accident, Sickness and Unemployment (also referred to as MPPI - Mortgage Payment Protection Insurance). This is an insurance policy designed to provide a regular income to pay the mortgage, should the borrower become unemployed or be unable to work due to an accident or sickness. Click here for prices. (On clicking the link you will be leaving this site and we are not responsible for the information that appears on the site you are now about to enter)

 

Bank of England Base Rate If this is altered in an attempt to control the overall economy, then the lenders will normally follow its movement and alter their own Standard Variable Rate.

 

Capital and Interest Your monthly payments to your lender are partly to pay the interest you owe, and partly to pay back some of the outstanding mortgage debt. Also known as a repayment mortgage.

 

Capped Rate An interest rate that is set for a period of months or years, and is applied only if the standard variable rate exceeds it.

 

Cash-back A lump sum of money given by the lender when you take out their mortgage. It varies depending on the individual scheme, can be quoted as a set figure or as a percentage of the overall mortgage, and can, in some cases, be used to fund the deposit.

 

CCJ County Court Judgement. A decision made in the County Court, usually for the non-payment of a debt and is registered on your credit file. Once the debt is paid ("satisfied"), and a satisfaction certificate obtained, it is also noted on your credit file.

Completion The day you become the new owner and can move in.

 

Contracts The legal documents under which the buyer and seller of the property agree the terms.

 

Conveyancing The process of transferring ownership of the property.

.

Credit Search This is a search your lender will carry out to determine whether you have any CCJ's, defaults or outstanding credit card bills.

 

Credit Scoring A process used by some, but not all, lenders to determine whether you are a good risk to offer a mortgage too.

 

Critical Illness Policy An insurance policy taken out by a borrower designed to pay them a lump sum of money, at least equal to the mortgage amount, should they be unfortunate enough to be diagnosed as suffering from any one of a number of certain medical conditions after the mortgage is in place. Unlike life assurance, it pays out on survival of the illness. It means the mortgage can be cleared so that there is no fear of repossession. Click here for a quote (On clicking the link you will be leaving this site and we are not responsible for the information that appears on the site you are now about to enter)

 

Deposit The amount of money you put towards the purchase of the property.

 

Disbursements The solicitor's expenses, which you have to pay on top of the fee, for such things as land registry, searches, faxes, etc.

 

Discount Rate A percentage off the lender's Standard Variable Rate and set for a specific amount of time, i.e. 1% off for three years.

 

Early Repayment Charge (previously known as "Early Redemption Penalty") A financial penalty for repaying part or all of the mortgage before an agreed date. It is often applied to mortgage schemes that are either fixed, capped or cash-back types. Quite simply, the lender agrees to offer what it believes is an exceptional package of benefits, providing the borrower agrees to keep the mortgage with them for an agreed length of time. Some lenders, and some scheme types, have no early redemption penalties at all. These are definitely worth looking into.

 

Endowment A savings plan with built-in life assurance that can be used as the repayment vehicle on an "interest-only" mortgage. Some policy holders have received notification that their policy may not mature with sufficient value, and as a result either switch to a repayment mortgage, or part endowment and part repayment. Some policy holders also cash their policy in early, unaware that they can get more for it by selling the policy to a third party who then continue to pay the premiums. The life offices do not appear to be notifying their policy holders of this option. If you have a policy that you are thinking of cashing in, and would like to see what it is worth if it was auctioned off instead, click here and fill in your name and phone number, to be contacted for the details. You will be notified of the highest bid for your policy, and can then decide whether to cash it in or sell it. (On clicking the link you will be leaving this site and we are not responsible for the information that appears on the site you are now about to enter)

 

Exchange of Contracts This is the point at which the respective solicitors swap contracts agreeing the price, fixtures and fittings, and completion date for the move. Everything is now legally binding. The buyer is now responsible for the new properties buildings insurance and, if either the buyer or seller withdraw, compensation will have to be paid.

 

Extended Tie-Ins This is where the early redemption penalties apply even after the scheme date has finished. It means, in effect, that the lender, in exchange for what it believes is an exceptional scheme, requires the borrower to keep the mortgage with them after the scheme has ended, for a set period of time, i.e. "fixed rate for two years with an early redemption period of five years." Extended tie-ins are to be avoided if at all possible.

 

Fixed Rate The interest rate is set for an agreed period of time.

 

Flexible Mortgages A relatively new breed of mortgage types that will allow flexibility of repayments. Typically, a borrower will be allowed to overpay, underpay, take payment holidays, and in some cases link their current, savings and deposit accounts to the mortgage account, so that the positive balances offset the negative balances. Some lenders will also include daily interest calculations so that any overpayments have an immediate effect on the interest charged.

 

Gazumping This is where the seller accepts an offer and agrees the sale only to accept a bigger offer before exchange of contracts has taken place.

 

Higher Lending Charge (previously known as Mortgage Indemnity Guarantee.) This insurance covers the lender if your property gets repossessed and the lender does not get all its money back. It protects the lender, not you. You would still be responsible for reimbursing the insurance company if they have to pay out to the lender. It is usually you who has to pay the one-off premium as part of the lender's conditions, but most lenders allow it to be added to the overall mortgage debt, and is collected when the mortgage is redeemed in the future. Recently the threshold for triggering a MIG premium has been raised from 75% LTV to 90% LTV. This means that anyone with at least a 10% deposit will probably escape it.

 

Homebuyers Report A Homebuyers Report, or a homebuyers survey, is a surveyors assessment of the state of repair and condition of the property. It includes all parts that are readily accessible, including the roof space, if possible, but excludes under floor areas. The concise report will summarise the findings and make recommendations for further investigations or remedial work if required. Because the surveyor is in direct contact with you, you can discuss any issues or concerns directly.

 

High Loan to Value Fee See MIG.

 

Income Multipliers Determines, in most cases but not always, how much you can borrow. The industry average is three times the gross salary of the first applicant plus one times the second, or two-and-a-half times the joint salaries, if this produces more.

Income Reference The lenders will usually write for an income statement from your employer.

 

ISA A savings plan designed to grow tax-free and can be used to repay an "interest only" mortgage.

 

Leasehold This is where you own the property for a number of years and then it reverts to the freeholder.

 

Licenced Conveyancer An alternative to using a solicitor. They specialise in property ownership transfer.

 

Life Assurance An insurance policy taken out by most borrowers to, at least, repay the outstanding mortgage debt should they die. It means their dependants/relatives/partner/ spouse can now inherit the property with no mortgage on it. Click here for a quote (On clicking the link you will be leaving this site and we are not responsible for the information that appears on the site you are now about to enter)

 

LTV Loan To Value. This refers to the size of the mortgage in relation to the value of the property. For instance a mortgage of £75,000 on a property of £100,000 value is said to be 75% LTV.

 

Mortgage Indemnity Premium - see Higher Lending Charge

 

Negative Equity Where the property has a value which is lower than all the loans secured against it.

 

Non Status A mortgage arranged under Non Status terms means that the lender is relaxing the requirement for proof of income, or is accepting adverse financial circumstances i.e. CCJ's. This usually translates into higher applied interest rates.

 

PEP Personal Equity Plan. A savings plan designed to build up tax-free savings which can be used to repay an "interest-only" mortgage.

 

Personal Pension This is a structured savings and investment plan designed to provide you with an income in retirement. Because you can take some of the plan as cash it could be used to repay an interest-only mortgage. Beware, unless you can somehow compensate for the reduced pension fund that this action will obviously result in, you will have less income in retirement.

 

Remortgage A new mortgage with a different lender even though you are not moving home. It can be of the same size, bigger or smaller. ANYONE ON A STANDARD VARIABLE RATE MORTGAGE SHOULD, AT LEAST, INVESTIGATE THIS. IT CAN SAVE YOU A SIGNIFICANT AMOUNT OF MONEY. CLICK HERE FOR A QUOTE

 

Repayment Mortgage See Capital and Interest.

 

Sealing Fee A fee paid to your "old" lender when the mortgage account is closed.

 

Searches These are checks carried out during the Conveyancing process to determine any planning proposals or other matters which might affect the future saleability of the property. Another search is carried out after exchange of contracts to check that the borrower is not bankrupt.

 

Self Certification This is a special arrangement whereby the lender relies on the borrower to certify their own income, and does not seek to confirm this by reference to the employer, (or the accounts, in the case of a self-employed person).

 

Standard Variable Rate The interest rate applied to the mortgage account when no other overriding scheme is in force. It fluctuates and follows the Bank of England base rate, but staying a margin above. SEE "REMORTGAGE" ABOVE.

 

Structural Survey This is based on a detailed inspection of the property and is a comprehensive report on the general condition and state of repair. It is particularly advisable for older or unusual properties, or where you want to assess the possibility of making building alterations at a later date. The scope of the report is discussed and agreed with the surveyor before the inspection, and you can discuss any issues afterwards.

 

Term The period of years over which you take the mortgage.

 

Title Deeds Documents that show proof of ownership.

 

Tracker Mortgage This where a lender offers a mortgage at an interest rate that is tied into, but a percentage above, the Bank of England base rate, as opposed to a percentage below their own individual standard variable rate. This means the change in interest rate is immediate if the Bank of England alters its rate. With a discount rate, some lenders have been criticised for delaying or not passing on any drop in the interest rate, but applying any increase immediately.

 

Transfer Deed The document that transfers the ownership.

 

Valuation Report Lenders require a standard valuation to be undertaken on the property before issuing the mortgage offer. This is to protect the lenders interest, not the borrowers. If the lenders valuation report reveals further reports or work to be undertaken, any further costs will be payable by the borrower, should the borrower choose to proceed. The lender will compare the valuation figure with the agreed buying price, and use whichever is lower when deciding on how much to lend.

 

Vendor The seller.



 

 

 

 

No information on this website is intended to constitute advice. This site contains a summary of the information relating to the products and is not intended to promote any specific mortgage or insurance product or provide mortgage or insurance advice. It is for information purposes only.