| Additional Security Fee | | | | Equity Release |
| An Additional Security Fee (Mortgage Indemnity | | | | Equity release is a means of releasing money from |
| Guarantee policy) is the fee taken to get an insurance | | | | the value of your home either in a lump sum or in |
| policy that will cover your lender so that if you default | | | | monthly installments. This money may be used for |
| on payments, he will not suffer any loss. You have to | | | | home improvements, debt consolidation, or other large |
| pay the Additional Security Fee and the premium along | | | | expenses. |
| with your mortgage advance. Although you are paying | | | | Exchange of Contracts |
| the premium, remember that this policy is for the | | | | Exchange of contracts occurs when the buyer and |
| protection of your lender and not for you. | | | | the seller of a property sign and swap the contracts |
| Administration Fee | | | | which detail the property, the price, the date, and the |
| The administration fee is the amount charged by your | | | | terms of the arrangement. When the contracts are |
| lender to start working on the documentation part of | | | | signed, they become legally binding, and legal action |
| your mortgage application. It includes the home | | | | can be taken against anyone who breaks the |
| valuation fee as well. The administration fee will not be | | | | contract. |
| refunded even if your valuation is not done or if your | | | | Existing Liabilities |
| application has been rejected. | | | | Existing liabilities are all financial commitments outside |
| Adverse Credit | | | | of your mortgage. Existing liabilities may include bank |
| Adverse credit occurs when you have a history of | | | | loans, credit card debt, maintenance payments, etc. |
| bad credit, bankruptcy, CCJ, or loan arrears. Adverse | | | | First Time Buyers (FTB or FTP) |
| credit can also be called as bad credit, poor credit, or it | | | | A first time buyer is one who has never owned |
| can be said that you have a low credit score. | | | | property before. |
| Agricultural Restriction | | | | Fixed Rate |
| An agricultural restriction is a rule which will restrict you | | | | A fixed rate is when you pay a fixed amount of |
| from holding a property if your occupation is in any | | | | interest on a loan for a fixed period of time. Lenders |
| way related to agriculture. | | | | provide fixed rate loans for short periods of time |
| Annual Percentage Rate | | | | (three-six months) all the way up to 25 years. Early |
| The Annual Percentage Rate is the rate at which you | | | | redemption penalties apply if you pay off the |
| borrow money from lender. It includes all the initial fees | | | | mortgage before the end of the fixed rate term. |
| and ongoing costs that you will pay throughout the | | | | Flexible Scheme |
| mortgage term. As the name suggests, annual | | | | A flexible scheme is a new way of calculating |
| percentage rate, or APR, is the cost of a mortgage | | | | mortgage interest charges. Lenders calculate interest |
| quoted in a yearly rate. The annual percentage rate is | | | | on a daily basis instead of on an annual basis. The |
| a good way to compare the offers from different | | | | new interest rates will only affect the remaining |
| lenders based on the annual cost of each loan. | | | | balance of the mortgage. By making regular |
| Apportionment | | | | overpayments, you can repay the loan faster thereby |
| Apportionment, or sharing out, is a facility that allows | | | | saving a lot on interest charges. |
| you to divide the responsibility for utilities, property | | | | Fixture |
| taxes, etc. with the buyer or the seller of the property | | | | A fixture is an item attached to your property, and |
| when you are either selling or buying the property. | | | | therefore it is legally part of the property. |
| Arrears | | | | Freehold |
| Arrears happen when you default on your mortgage | | | | Freehold means that you have ownership of a |
| payment or any other type of debt payment. If you | | | | property for an indefinite period of time. This is in |
| have arrears on the record of your current mortgage, | | | | contrast to leasehold which means that the property is |
| you will face problems when you want to look at | | | | only under your control for a limited period of time. |
| remortgaging or getting a new mortgage. | | | | Further Advance |
| Arrangement Fee | | | | A further advance is an add-on loan to your existing |
| An arrangement fee is the amount you have to pay | | | | mortgage from your existing lender. The money from |
| your lender to access particular mortgage deals. While | | | | a further advance may be used for home |
| searching for a fixed rate, cash back, or discounted | | | | improvements, to purchase a freehold property, or for |
| rate mortgage, you will pay this fee at the time that | | | | personal purposes such as debt consolidation. |
| you submit your application, it must be added to the | | | | Guarantor |
| loan upon completion of the term, or it will be deducted | | | | A guarantor is a person who guarantees the lender |
| from the loan on completion. | | | | that the borrower is eligible for a loan or mortgage. If |
| Assignment | | | | the borrower fails to make payments, the guarantor |
| An assignment is the document transferring the lease | | | | will make them. |
| of the property or rights of ownership from a seller to | | | | Gazumping |
| a buyer. It may be an endowment policy to the building | | | | Gazumping occurs when a seller agrees to sell a |
| society in connection with a mortgage. | | | | property to one person, and they proceed to decline |
| ASU | | | | that offer in favor of a higher one. |
| ASU is Accident, Sickness, and Unemployment | | | | Ground Rent |
| insurance which covers your mortgage payments in | | | | Ground rent is the amount which a leaseholder needs |
| case of an accident, a sickness, or involuntary | | | | to pay to the freeholder each year. |
| unemployment. | | | | Home Buyer Report |
| Auction | | | | A home buyer report is made by a lender after a |
| An auction is the public sale of a property to the | | | | mortgage valuation has been done and before the full |
| person who quotes highest bid. The highest bidder has | | | | survey takes place in order to give the borrower a |
| to sign a binding contract that ensures that he do all | | | | complete understanding of the property they are |
| valuations, searches, etc. before the sale of the | | | | thinking of buying. |
| property. | | | | Income Multipliers |
| Authority to Inspect the Register | | | | An income multiplier is a type of calculation that a |
| An authority to inspect the register document is a | | | | lender will use to calculate the amount a borrower can |
| document fro the legal or registered owner of a | | | | receive. The most common income multiplier is three |
| property allowing the solicitor of the purchaser to get | | | | times a single income or two and a half times joint |
| information concerning the property. | | | | income. The lender will choose the one that yields the |
| Banker Draft | | | | higher figure. Lenders are more flexible if your LTV |
| A banker draft is a way to make a payment. In | | | | ratio is low. |
| appearance, it is the same as a cheque, but in effect it | | | | Income Protection Insurance |
| is a cash payment. The money is given to the bank, | | | | With income protection insurance, your monthly |
| and they issue a cheque that is certified to be good | | | | payments will be covered in the case of illness, |
| for the given amount. | | | | accident, or unemployment. |
| Base Rate Tracker | | | | Intermediary |
| Base rate tracker is a type of mortgage in which the | | | | An intermediary is a mediator who finds the best |
| interest rate is variable, but it is set at a premium | | | | mortgage for you, and they also arrange the |
| (above) the Bank of England Base Rate for a period | | | | mortgage for you on your behalf. |
| or for the full term of the mortgage. The best part | | | | Land Registry Fee |
| about this type of mortgage is that it has little or no | | | | A land registry fee is paid when you want to register |
| redemption penalty. This means that by making | | | | your ownership of a property or when you want to |
| overpayments, you will be able to save money on | | | | change the registered title of a property. |
| interest by paying off your mortgage earlier than the | | | | Leasehold |
| agreed upon date on the initial mortgage contract. | | | | Unlike freehold in which a property is owned, leasehold |
| Booking Fee | | | | is when a property is owned, but the land that it is built |
| A booking fee or arrangement fee is charged when | | | | on is not owned by the leaseholder. Their control of |
| applying for a fixed or a capped rate loan. Booking | | | | the property is only for a set number of years. |
| fees are normally non-refundable if charged upfront, | | | | Licensed Conveyancer |
| but sometimes the booking fee is added to your final | | | | A licensed conveyancer is like a solicitor in that they |
| mortgage payment. | | | | specialize in the legalities of buying and selling property. |
| Bridging Loan | | | | Local Authority Search |
| A bridging loan is useful when you want to purchase a | | | | A local authority search is made by the solicitor of the |
| property, but your ability to do so is contingent upon | | | | people that plan to buy your property. They check to |
| the sale of your old property. This is a very short term | | | | make sure there are no planned developments on the |
| loan that is paid off as soon as your old property sells. | | | | property such as roads or buildings. They will check for |
| Speak with a loan adviser before taking out a bridging | | | | any planning permissions or enforcement notices |
| loan to be sure it is the best option for you. | | | | posted on your property. |
| Broker Fee | | | | LTV |
| A broker fee is paid to your debt advisor or other | | | | LTV, or loan to value, is the percentage derived from |
| intermediary that assists you in finding the best | | | | dividing the value of your property by the amount of |
| mortgage or loan deal for your circumstances. | | | | your mortgage. A low LTV is much less risky for |
| BSAThe BSA, or the Building Societies Association, is | | | | lenders than a 100% LTV. |
| a group that works in the interest of member societies. | | | | Loan Consolidation |
| Building Societies Commission | | | | Loan consolidation happens when a loan is taken out |
| The Building Societies Commission is a regulatory | | | | to repay another loan with a higher interest rate or to |
| organization for Building Societies. This commission | | | | repay a number of high interest debts. Loan |
| reports to the Treasury Ministers. | | | | consolidation is often achieved through remortgaging. |
| Building Society | | | | MIG |
| A Building Society is a mutual organization that gives | | | | A MIG, or mortgage indemnity guarantee, is insurance |
| you money to buy or remortgage residential properties. | | | | one takes out to cover their lender in the case that |
| This money comes from individual investors who are | | | | their property is repossessed, and the lender is unable |
| paid interest on their funds. A portion of building society | | | | to get their money back. A MIG is paid for upon |
| funds is also raised through commercial money | | | | completion of a mortgage. |
| markets. | | | | MIRAS |
| Buy-to-Let | | | | MIRAS, or mortgage interest relief at source, was a |
| When you purchase a property for the sole purpose | | | | tax relief given to those with mortgages, but this relief |
| of renting it out, you can apply for a buy-to-let | | | | was abolished by the government in April of 2000. |
| mortgage. The payments for this type of mortgage | | | | Mortgage |
| are calculated based on your projected rental income | | | | A mortgage is a loan that allows someone to buy a |
| instead of your personal income. | | | | property. The property itself is the security for the loan. |
| Capital and Interest | | | | Mortgagee |
| Your monthly mortgage payments consist of two | | | | The mortgagee is the company or organization that |
| parts: the interest and the capital. The interest payment | | | | finances your mortgage. |
| is a payment on the interest balance of your loan. The | | | | Mortgagor |
| capital payment is a payment on the amount that you | | | | The mortgagor is the person taking out the mortgage |
| borrowed. | | | | to buy a property. |
| Capital Raising | | | | MPPI |
| Capital raising generally means remortgaging for a | | | | MPPI, or mortgage payment protection insurance, is |
| higher amount than you need to pay off your existing | | | | insurance one takes out in the case of an accident, an |
| mortgage in order to use the excess money for other | | | | illness, or involuntary unemployment that would render |
| personal financial uses. | | | | them incapable of making their monthly mortgage |
| Capped Rate | | | | payment. |
| A capped interest rate is an interest rate that will not | | | | MRP |
| exceed the standard variable interest rate for a set | | | | MRP, or mortgage repayment protection, is insurance |
| period of time (from 1-5 years) that is decided by you | | | | taken out through your lender during the term of your |
| and your lender. If the standard variable rate falls | | | | loan. |
| below your capped rate, your interest rate will | | | | Negative Equity |
| decrease accordingly. | | | | Negative equity occurs when the money you owe to |
| Cash Back | | | | your mortgage lender is greater than the value of your |
| Cash back is the amount you receive when you take | | | | property. People find themselves in negative equity |
| out a mortgage, the amount may be fixed or a | | | | situations when they take out 100% LTV mortgages. |
| percentage of your mortgage amount. | | | | Overpayment |
| CCJ | | | | Overpayment happens when you pay more than the |
| CCJ stands for County Court Judgment. This is a | | | | regular monthly payment on your mortgage so that the |
| decision reached by a county court against you when | | | | mortgage is repaid before the end of the mortgage |
| you have defaulted on your debt payments. If you | | | | term. With overpayments, you can save money on |
| clear the debt in question in a set amount of time, a | | | | interest, but you may also be charged an early |
| satisfactory note will be put on your credit report to | | | | redemption penalty.Payment HolidayA payment holiday |
| signify that the debt is taken care of. | | | | is a period during which you make no mortgagee |
| Centralized Lender | | | | payments. This is normally available with flexible |
| A centralized lender is a mortgage lender that does | | | | mortgages only. |
| not rely on a branch network for distribution. | | | | PEP |
| Centralized lending is now provided by several building | | | | A PEP, or personal equity plan, allows you to own |
| societies. These societies operate separately from | | | | shares or unit trusts without paying any taxes. |
| their branch networks, and they rely exclusively on | | | | Personal Pension |
| mortgages from intermediary sources. | | | | A personal pension provides for your financial needs |
| Charge | | | | after retirement. You make structured payments into |
| A charge is any interest on a mortgage to which a | | | | your pension savings during your working years. Often, |
| freehold or leasehold property can be held. | | | | some of this money may be taken out to pay off your |
| Charge Certificate | | | | mortgage liabilities. |
| A charge certificate is a certificate issued by HM Land | | | | Portability |
| Registry to you with your name as the registered title | | | | Portability is a term used to describe a mortgage that |
| for a given property. This certificate contains details of | | | | can be transferred between properties when you |
| restrictions, mortgages, and other interests. It has three | | | | move from one house to another. |
| different parts: a charges register, a property register, | | | | Redemption |
| and a proprietorship register. If there is no mortgage on | | | | Redemption is when you pay off your mortgage, |
| the property, it is called a Land Certificate, and it is | | | | when you remortgage, or when you move to a new |
| issued to the registered proprietor. | | | | house. |
| Chattels | | | | Remittance Fee |
| Chattels are moveable items in your house such as | | | | A remittance fee is charged by a lender for sending |
| furniture or your personal possessions.Chief RentChief | | | | the amount of a mortgage to your solicitor. |
| rent is paid by the owner of a freehold property. This | | | | Remortgage |
| is the same as the ground rent that is paid by a | | | | A remortgage is a loan taken out from a new lender |
| leaseholder. | | | | or a loan renegotiated with your existing lender to pay |
| CML | | | | off your existing mortgage. This is done to decrease |
| Council of Mortgage Lenders | | | | the interest rate you are paying or to raise extra |
| Completion | | | | capital. |
| Completion is a term that explains that you have | | | | Repayment Mortgages |
| become the owner of your house after finishing the | | | | A repayment mortgage is when part of your monthly |
| formalities of the sale and the purchase of the | | | | payment goes toward the interest and another part of |
| property. | | | | the payment goes toward the principal. This is also |
| Conditional Insurance | | | | known as a capital and interest mortgage. If payments |
| When you take out a fixed or discounted rate | | | | are made regularly, the entire sum of the loan will be |
| mortgage, your lender may try to persuade you to | | | | repaid by the end of the term. |
| take out an insurance policy that will cover any missed | | | | Retention |
| payments due to an illness, an accident, or | | | | Retention is the amount that your lender keeps |
| unemployment. | | | | pending until certain conditions of your mortgage are |
| Contract | | | | met. |
| A contract is a legally binding sale agreement. There | | | | Repossession |
| are two identical copies signed by both the buyer and | | | | Repossession is a legal process by which your |
| the seller, and each party keeps a copy for their | | | | mortgaged property comes under the control of your |
| records. Once both parties have signed the contract, | | | | lender due to incomplete repayment. Your property |
| they are committed to the terms of the agreement. | | | | may then be sold at public auction. |
| Conveyance | | | | Right to Buy |
| A conveyance is the deed by which a freehold, | | | | Right to buy means that you are legally able to |
| unregistered title is transferred. The deed is called an | | | | purchase the property at a discounted rate if you |
| assignment if your property is unregistered or | | | | have been a tenant for a long enough period of time. |
| leasehold. If the property is registered, the deed is | | | | Sealing Fee |
| called a transfer. | | | | A sealing fee is an amount charged by your lender |
| Conveyancing | | | | when you repay your mortgage. |
| Conveyancing is the legal process by which the buying | | | | Self Certification of Income |
| and the selling of a property take place. | | | | Self certification of income means that you confirm |
| Covenant | | | | how much you earn, and the lender does not need |
| A covenant is an assurance given in a deed.Credit | | | | proof of your income from a third party. Self |
| ScoringCredit scoring is the procedure by which a | | | | Certification is useful for self employed people or |
| lender evaluates your paying capacity before offering | | | | contract workers. |
| a loan or mortgage. | | | | Shared Ownership |
| Credit Search | | | | Shared ownership is a scheme devised by housing |
| A credit search is done by a lender and a credit | | | | associations that requires you to pay mortgage |
| bureau to search your records for CCJs and other | | | | payments on the part of a property that you own |
| indicators of bad credit. | | | | while you also make monthly rent payments on the |
| Debt Consolidation | | | | portion of the property owned by the building |
| Debt consolidation is the process by which you take | | | | association. |
| out a loan or mortgage in order to pay off a number | | | | Solicitors |
| of high interest debts. By doing this, you will only need | | | | Solicitors are the people who give legal advice and |
| to make one payment each month, and you will save | | | | carry out all the legal work for mortgage and |
| significantly on interest charges. | | | | remortgage transactions.Stamp Duty Stamp duty is a |
| Deed | | | | tax paid to the government on the purchase of a |
| A deed is a legal document that denotes the owner of | | | | property. |
| a given property. You can transfer a title to both | | | | SVR |
| freehold and leasehold with a deed. | | | | The SVR, or standard variable rate, is the base rate of |
| Deposit | | | | the lender. It is subject to change at any time |
| A deposit is the amount of money you put down | | | | depending on the lender. The SVR will fluctuate based |
| toward buying a property. | | | | on the Bank of England Base Rate. |
| Disbursements | | | | Structural Survey |
| Disbursements are any amount you pay to solicitors | | | | A structural survey is the thorough inspection of a |
| against land registry fees, searches, faxes etc. | | | | property carried out by a professional surveyor. |
| Discounted Rate | | | | Tenure |
| Discounted rates are used to attract new borrowers | | | | Tenure means the type of rights a person has over a |
| to lenders by setting the interest rate below the | | | | property or the land it stands on. Tenure could be |
| standard variable rate for a guaranteed period of time. | | | | freehold or leasehold, for example. |
| If you repay the entire discounted rate mortgage within | | | | Term |
| the first few years, your lender may charge you early | | | | The term of a mortgage is the number of years over |
| redemption penalties. | | | | which you plan to pay your mortgage off. |
| Early Redemption Penalty | | | | Tie-in Period |
| An early redemption penalty is charged by your lender | | | | A tie-in period is an amount of time for which you are |
| if you do a part or full payment of your mortgage | | | | bound to a lender. Tie-in periods often exist with |
| amount before the completion of your mortgage term. | | | | special mortgage deals like fixed, capped, or |
| These penalties will also be charged if you decide to | | | | discounted rates. If you move your mortgage to a |
| remortgage and move your mortgage to a new | | | | different lender during this period, you are subject to an |
| lender. Early redemption penalties mainly apply to fixed | | | | early redemption fee. |
| rate, discounted rate, and cash back mortgages. | | | | Title Deeds |
| Easement | | | | A title deed is a legal document that validates the |
| Easement is the right held by one property owner to | | | | ownership of your property. A title deed proves your |
| make use of the land of another for a limited purpose, | | | | true and legal right to your property. |
| like a right of passage. | | | | Transfer Deed |
| Endowment Mortgage | | | | A transfer deed is a legal deed used for transferring |
| An endowment mortgage is an interest only mortgage | | | | the ownership of your property to a buyer. |
| supported by an endowment policy. During the term of | | | | Unencumbered |
| the mortgage you will pay only interest to the lender, | | | | The term unencumbered means that you own your |
| and your premiums are alternately paid into an | | | | property outright with no mortgages or loans against it. |
| endowment policy which will mature over the term of | | | | Valuation |
| your mortgage. The endowment policy is designed to | | | | A property valuation is a survey conducted on a |
| pay off your mortgage as well as act as life insurance. | | | | property by a qualified surveyor in order to assess the |
| However, you cannot depend on this amount to be | | | | value of the property. This valuation is done on behalf |
| sufficient to pay all of your debt. | | | | of your lender so that they are able to confirm the |
| Endowment | | | | value of your property. |
| There are different types of endowments, but here an | | | | Variable Rate |
| endowment is a life insurance policy that will pay off | | | | A variable rate means that your interest rate may |
| your interest only mortgage. | | | | change from month to month thereby causing your |
| Equity | | | | payments to fluctuate monthly. |
| Equity is the amount of value in your home. It is the | | | | Vendor |
| value of your home less the amount left to be repaid | | | | A vendor is the person from whom you purchase a |
| on your mortgage. | | | | property. |