Select a letter
from the list below to browse this glossary section:
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Advance - The
amount of money we initially lend you in the form of a mortgage or loan.
Annual Percentage Rate (APR) - A standard calculation
used to show the total cost of a mortgage or other loan. Includes costs such
as interest payments, valuation fees, legal fees and administration fees which
aren’t included in the basic interest rate. The APR is designed to reflect
the true cost of credit. It’s a good way of comparing the cost of different
loans on a 'like-for like' basis and because mortgage and loan rates vary, so
will the APR.
Application Fee - This is made up
of a valuation fee and a non-refundable administration fee.
Arrangement Fee -
Sometimes an arrangement fee is charged when taking out a mortgage. The fee
is non-refundable.
Assets - Property and possessions
that are regarded as having value. For example, when granting a loan to a business,
the Company may use the value of that company’s assets to guarantee the
loan repayments.
ASU - Accident, Sickness and Unemployment
- for definition see Mortgage Protection Insurance (MPI). Audited Accounts - A set of accounts that have been officially
examined by a certified or chartered accountant to check that they
are in order.
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Bank of England Base Rate - This is a variable interest rate
set by the Bank of England each month which all our accounts follow.
Buy to Let - This where private individuals or
companies wish to purchase or remortgage an additional property
for letting purposes.
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Capital - In
relation to a mortgage, this is the amount of money you borrow.
Capital and Interest Repayment Type
- See Repayment Mortgage.
Completion - The moment when you become
the legal owner of a property, and consequently, the moment when you can move
in. Mortgage completion is when your mortgage starts.
Contracts - The legal documents under
which you, and the person selling the property, agree to buy and sell that property. Conveyancing - The legal process involved in buying and selling
property.
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Disbursements - The fees your solicitor
or licensed conveyancer will incur - such as search fees or Land
Registry fees - during conveyancing. These are added to your overall
legal bill.
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Early Repayment Charges
- On some mortgages a charge will be made if part, or all, of your mortgage
is paid-off before a pre-agreed date. This charge may also be incurred if you
move your mortgage to another lender. The mortgage Terms and Conditions will
state if this charge applies.
Endowment Policy - A form of savings
plan that comes with a particular type of mortgage - an endowment mortgage.
It is designed to potentially pay-off your mortgage at the end of the term,
or pay-off an outstanding mortgage in the event of death. This type of policy
could be a repayment vehicle for an interest-only mortgage.
Equity - The difference between the
value of your property and the total amount of borrowings secured against it.
For example, you may have borrowed a £30,000 mortgage but your house is
worth £60,000. This would mean that you have equity of £30,000. Exchange of Contracts - In England, Wales and Northern Ireland
this is the point at which the buyer and seller of a house have
legally committed themselves to that deal.
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Feuhold - Similar
to Freehold (see below) under Scottish law.
Fixed Interest Rate - An interest
rate that's fixed until a set date: it will not go up or down - even if the
variable rate does.
Fixed Rate With Extended Tie-In -
This is where the period in which an Early Repayment Charge would be applied
extends beyond the fixed rate period.
Fixed Rate With No Extended Tie-In
- This is where the period in which an Early Repayment Charge would be applied
lasts the same length of time as the Fixed Rate period. At the end of the Early
Repayment Charge period you can repay your loan, in part or in full, without
any Early Repayment Charge being levied.
Freehold - If you have a freehold
property, you own it.
Full Building - A comprehensive survey
carried out by a professional surveyor, on your behalf, to thoroughly examine
the condition of a property. Further Advance - Further borrowing secured against your
property, in addition to your initial mortgage advance.
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General Insurance - The
class of insurance which does not involve death as the main risk.
It includes home, car and many specialized commercial risks such
as aviation or marine etc.
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Higher Lending Charge
- This is a fee sometimes payable by the borrower. Where a high percentage of
the property value is borrowed. Any higher lending charge will be detailed in
an illustration. Homebuyers Report - A survey that you ask a professional
surveyor to carry out on a property that you wish to buy. You will
receive a report on the condition of the property that states any
repairs or defects that need attention.
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Interest-Only Mortgage - With an interest-only
mortgage you pay just the interest on a monthly basis as normal.
You can then decide how you wish to invest your money to pay off
your mortgage at the end of the term, by using an investment plan
or a pension plan sum for example.
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Land Tax - Government
tax on property purchase. This is 1% of the purchase price on any property bought
for more than £60,000, 3% for properties over £250,000 and 4% for
properties over £500,000.
Leasehold -
A contract by which a freeholder of a property allows someone else to stay there
under certain conditions, and for a given length of time. (Almost all flats
are leasehold).
Life Assurance - An insurance policy
that pays a lump sum on death to the policyholder's estate. Loan To Value (LTV) - This is the amount of money borrowed
as a percentage of the property's overall purchase price (or value,
whichever is lower). For example, if a deposit of £25,000
is provided when purchasing a property valued at £100,000,
then the mortgage amount borrowed will be £75,000; the LTV
is therefore £75,000 divided by £100,000, or 75%.
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Mortgage - A
loan secured against a property.
Mortgage Deed - The legal document
by which the lender (the Company) secures the loan against the borrower's property.
Mortgagee - An institution that gives
someone a mortgage, such as a bank or building society.
Mortgage Protection Insurance (MPI) - Mortgage
Protection Insurance is designed to provide cover in the event you are unable
to work due to involuntary redundancy, illness or injury due to an accident.
For each claim you will usually receive the amount you have insured for up to
12 months.
Mortgage Term - The time over which
the mortgage is to be repaid. Mortgagor - Someone who takes out a mortgage (i.e., the borrower).
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Part Commercial Mortgage
- Mortgage secured on a property which is part residential and part commercial
e.g. a guest house.
Portable Mortgage - If a mortgage is
'portable' it means that it can be transferred from one property to another
without a penalty. Purchaser - The term used by estate agents, solicitors and
lenders for the buyer of a property.
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Redeem - To
pay-off all or part of the outstanding balance of your mortgage.
Remortgage - Transferring your mortgage
without moving house.
Repayment Mortgage -
With a repayment mortgage you make one payment each month for the length of
the mortgage. This payment covers both the interest and the repayment of capital.
The proportion of the capital repaid increases as the term progresses. At the
end of the term you will have repaid your mortgage in full. Repayment Vehicle - A savings plan such as an endowment policy,
an ISA or a pension which is designed to repay the balance of a
mortgage at the end of its term.
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Self Certification - Self Certification
mortgages are for self-employed and employed applicants for whom
proving their total income is not simple. Instead or proving your
income, you are asked to calculate how much of your income you can
put towards your mortgage after deducting tax, other regular commitments
and the cost of living.
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Title - The legal right to ownership
of a property.
Title Deeds - Documents showing who
owns a property.
Total Amount Payable - The total cost
of repaying a mortgage over the loan period, including the initial money borrowed,
interest charges, etc. Transfer Deed - Purchase document which transfers ownership
from the seller to the buyer.
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Valuation - This is the basic assessment
that is carried out on a property. This valuation is for the lender's
benefit only so it can decide how much mortgage it is prepared to
offer.
Variable Interest Rate - An interest
rate which can go up or down. Vendor - The term used by estate agents, solicitors and lenders
for the seller of a property.
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M&S Mortgage Solutions Ltd is an Appointed Representative of BDS Mortgage Group which is authorised and regulated by the Financial Services Authority for mortgages and Non-Investment Insurance FSA number 301646
The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.
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