Glossary
Accident Insurance
Insurance cover that cover you against certain injuries, such as loss of a limb or vision.
Agreement In Principle
This means you have been accepted for a mortgage, but it will depend on the circumstances – eg valuation report or confirmation of employment.
Annual Percentage Rate (A.P.R)
the effective interest rate that will be paid on a loan, In other words the APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. APR is intended to make it easier to compare lenders and loan options.
Arrangement Fee
The fee charged by a lender for setting up the loan. Payable on completion but may sometimes be added to the loan.
Asking Price
The initial starting price for which the property owner is looking to sell their property.
Bank Rate
The basic interest rate set by the Bank of England.
Bridging Loan
Short-term loan used as coverage when buying a new property before selling an existing one.
Buildings Insurance
Insurance policy which covers the structure of the building.
Buy To Let Mortgage
A mortgage for a property which the owner intends to rent out privately to tenants.
Capped Rates
The mortgage interest rate will not exceed a certain value during a certain period of time.
Cash Back Mortgages
Cash back mortgages provide you with a single lump sum of cash on completion.
Cash Buyer
Person or persons who do not need a mortgage in order to buy a property and who do not have a property to sell.
Certificate Of Deposit
Certificates from a financial organisation confirming you have the funds available to pay the deposit.
Commercial Mortgage
Where the loan is granted for commercial purposes, and is usually secured against commercial property, though residential property may be used.
Completion
The moment at which all the legal formalities of the purchase or mortgage are finalised and the funds are drawn down from the lender.
Completion Date
The official date for completion of a sale of a house, when keys are transferred.
Conditional Insurance
An insurance policy that has to be taken out as a condition of the loan.
Contents Insurance
This is the insurance of items within your home i.e. furniture, clothing, personal possessions etc.
Conveyancing
The legal documentation relating to the transfer of ownership of a property.
Conveyancing Fee
A fee charge by a solicitor or licensed conveyancer for arranging the necessary legal work in transferring the ownership of a property.
Co-Ownership
Shared ownership, a method of purchasing property in partnership with a housing association, where the borrower purchases part of the property and rents the rest from the housing association.
Credit Averse
If a borrower has been bankrupt or has outstanding CCJs they would be described as credit adverse.
Credit History
The history of the borrowers financial record.
Credit Rating
Rating used to establish risk involved in lending money. This is used in conjunction with credit history and employment status.
Credit Reference Agency
Companies that hold credit information one file.
Deed
The document that proves you own the property. It also shows land boundaries.
Default
When payment or payments are missed.
Discount Rate
The mortgage interest rate is lower than the current normal standard variable rate, but only for a certain period of time.
Early Repayment Charge (ERC)
A fee charged if you choose to move or pay off your mortgage before the end of an agreed term.
Endowment mortgage
A mortgage with an interest payment and a separate payment into an endowment investment product designed to repay the mortgage at the end of the term.
Estate agent
A person whose business is the sale or lease of buildings or land on behalf of others. Currently unregulated.
First Time Buyer
A person that is purchasing a property for the first time.
Fixed Rates
A loan where the initial payments, for a certain period of time, are based on a specific interest rate.
Freehold
Land or property which is owned outright, as opposed to leasehold where the owner has the right to occupy the land or property for a given period of years only.
FSA Financial Services Authority
The body responsible for regulating the mortgage market, among others.
Gazumping
Where the seller accepts a higher bid after accepting yours.
Ground Rent
When you are a leaseholder you will probably have to pay ground rent to the person that owns the land your property stands on.
High Street Lenders
These are mainl banks and building societies we expect to find on the high street.
Home Improvements
Work carried out to improve your home.
Homebuyer's Report
Same as a survery but less stringent report than a full structural survey.
Homebuyer's Valuation Fee
This is the fee paid for a simple survey of the property you are thinking of buying.
Household Insurance
Insurance cover for your home. This is split into two main types of cover- building and contents insurance.
Interest Only
Mortgages where you pay off the interest only.
Interest Rate
Percentage of your loan that a lender charges each year for lending you money.
Joint Application
A mortgage application that involves more than one person as the borrower.
Joint Liability
Two people who are responsible for a loan or debt.
Land Registry
A record of property, ownership and the mortgage is registered in a central register at HM land registry.
Land Registry Fees
A fee payable to the land registry to change an entry in their records following a transaction involving registered land. This can be following a change of ownership or just a change of mortgage.
Leasehold
The land on which the property is built is not owned directly by the property purchaser and is held under a lease for a fixed period.
Mortgage
The name given to credit used to buy property or loan secured by land.
Mortgage Code
The regulations that mortgage provider have to stick to.
Mortgage Deed
Legal document establishing a loan on property.
Mortgage Term
Is the length of time before the mortgage loan must be repaid.
Negative Equity
A situation that occurs when the amount loaned against a property is more than the market value of the property.
Open Market Value
The value of a property on the basis of a willing buyer and willing seller in the open market allowing for a reasonable period for sale.
Pension Mortgage
An interest-only mortgage where the capital will be repaid from the tax free cash sum that can be received from the pension fund at maturity.
Redemption
This is paying off the mortgage, either to move to another property or at the end of the mortgage term.
Remortgaging
Switching your mortgage and/or mortgage lender.
Search Fee
Before you buy your property you have to check with your local authority that there are no plans that will effect the value of your property.
Self Certification
A mortgage loan where the borrower makes a statement of his or her income and the lender makes fewer checks than normal on the accuracy of this statement.
Shared Ownership
A method of property purchase in partnership with a housing association. The borrower purchases part of the property and rents the remainder from the housing association.
Stamp Duty
A tax payable on property purchase, charged at 1% on properties costing £125,000 to £249,999 ; 3% on properties from £250,000 to £499,999, and 4% on properties over £500,000.
Structural Survey
The most comprehensive form of inspection that can be undertaken by a chartered surveyor. In the case of properties with movement, lenders may require a structural engineer's report. This is a different type of survey carried out by a chartered building engineer and should not be confused with a structural survey.
Survey
An inspection carried out for the benefit of the mortgage lender to make sure that the property forms a good security for a loan.
Term
The mortgage term is the length of time before the mortgage loan must be repaid.
Valuation
When basic survey carried out by a surveyor to establish the value of your property.
Valuation Fee
A fee paid by the borrower for the lender's inspection of the property. This is normally paid on application.