Is a poor repayment track record of current of previous financial commitments This can affect whether a lender will grant you a mortgage.
Agreement in Principle
This is an initial assessment of your financial circumstances and past credit history to indicate if they are likely to lend you a certain amount over a given term. This will generally include a credit search.
Annual percentage rate. The overall cost of a mortgage, including the interest and fees. It assumes you will have the mortgage for the whole term.
A fee charged by some lenders for arranging the mortgage. Tracker and variable rates are generally
Accident sickness and unemployment insurance, sometimes called MPPI (Mortgage Payment Protection Insurance). This is generally a short term insurance (one to two years) that is designed to cover the amount of your mortgage and associated costs if you are unable to work due to accident, sickness or unemployment.
The Bank of England’s official rate of interest. Lenders generally use this to set their variable and tracker rates.
A fee charged by some lenders, normally charged to book the funds required for your mortgage application.
This is required by all lenders. It covers you for structural damage to your property.
Buy to Let
A mortgage used for purchasing a property that will be let to tenants.
A type of mortgage rate. It sets a maximum rate you will pay if interest rates rise.
County Court Judgement. These can be applied when an individual has failed to make payments on a loan or credit agreement. These will stay on a credit file for 6 years and will have a serious impact on the choice of lenders that will be prepared to offer mortgage finance.
The legal process of transferring the ownership of a property from one individual to another.
A measuring system used by many lenders to assess whether to lend or not based on numerous items including, occupation, salary, time in job, credit history and many more.
A mortgage rate that is discounted from the lenders standard variable rate. For example if it was 2% discount from a lenders variable rate of 5% then the rate you would pay is 3%.
The value of your property less any mortgage secured on it.
Early Repayment Charge. This is a penalty that is payable to a lender if the mortgage is repaid before a certain date. They are usually expressed as a percentage of the loan.
A type of rate that stays the same for a given time regardless of changes to the lenders variable rate.
A type of mortgage that allows you to make over payments, under payments and payment holidays.
The Tenure of a property where you own the property and the land it is built on.
Help to Buy Equity Loan
A scheme set up by the government to allow you to buy a new property funded by a mortgage and a loan from the government agency (normally 20% of the value of the property).
Help to Buy Mortgage Guarantee
A scheme set up by the government to allow people to borrow 95% of the value of a property. It can only be used for your main residence and you must not own any other property.
This is where a borrower only pays back the interest to the lender and not the capital. This type of mortgage is not generally available for residential mortgages.
This is where you own the property but not the land it is built on. As the length of the lease reduces this can affect the ability to gain a mortgage on the property.
Loan to Value, normally expressed as a percentage of the loan against the value of the house. For example if a property is valued at £100,000 and you require a loan of £90,000 then the LTV is 90%. Generally the lower the LTV the better the mortgage rate available.
This is the official document that details the terms and conditions of the mortgage including the amount, interest rate, term and any charges.
Mortgage Payment Protection Insurance, sometimes called ASU (Accident Sickness and Unemployment). This is generally a short term insurance (one to two years) that is designed to cover the amount of your mortgage and associated costs if you are unable to work due to accident, sickness or unemployment.
If a mortgage is “portable” it can be transferred between properties if you move during the period of the initial rate.
The cost of rebuilding your property if it was destroyed. It is not the same as the value of the property.
It is structured so that each month you pay back an element of interest and an element of capital. This is the only type of mortgage that is designed to ensure that you repay the loan at the end of the term.
This is a type of mortgage where you buy part of a property and rent the remainder. These types of mortgage are generally available to people on low incomes to allow them to enter the property market.
This is a tax levied by the government on the transfer of the title of a property that is over a certain value, currently £125,000.
Standard Variable Rate. This is the rate of interest charged by a lender when the initial mortgage rate has ended.
The conditions under which land or a property held. This is generally either Freehold or Leasehold for properties in England and Wales.
A type of mortgage rate that “tracks” a variable rate often the Bank of England Base Rate at rate either above or below it.
This is carried out by the lender to assess the value of the property and whether they are prepared to lend the amount requested. It is primarily for the Lenders use.
A type of mortgage rate that goes up or down in relation to changes to the Lenders standard variable rate.