Insurance cover arranged by the borrower to help protect against inability to meet mortgage payments - click here for more information about ASU insurance
Some lenders will reserve a proportion of the fee charged for the valuation to cover their own costs. This element of the valuation fee will normally not be refunded if the mortgage fails to go ahead
See bad credit
An up front decision from a lender on how much you can borrow which puts you in a stronger buying position and means your property transaction is likely to complete more quickly - click here for more information about the benefits of obtaining an agreement in principle
A figure intended to clearly explain the true cost of borrowing and to provide the borrower with a method of comparing the true costs of different types of loan
Mortgage payments not maintained
A term used for a range of individuals who do not fit the traditional lenders criteria for a variety of different reasons
The amount of money earned that is guaranteed regardless of the individual or company performance
To secure a particular deal, a lender may charge an up front fee, this normally applies to special offer loans, such as fixed or capped rates
Fee charged by an intermediary to the borrower for arranging their mortgage
Insurance covering the structure of a building which is a prerequisite for having a mortgage - click here for more information about buildings insurance
Buy to let mortgages are for properties purchased for investment purposes
The principle part of a loan - ie the original amount borrowed
Otherwise known as a repayment loan, the borrower pays an amount each month to cover the amount borrowed and the interest charged
The increase in the value of your property
A type of mortgage which means that the mortgage interest rate will not exceed a specified value during a certain, specified period of time, but can fluctuate up and down below that level
A type of mortgage where the lender will offer a lump sum of cash at the start of your mortgage. Often this will take the form of a sum of money towards the cost of legal fees or survey charges
The point at which the legal formalities of a property purchase or mortgage are finalised and the funds are released by the lender. In the case of a property purchase, it is also the point at which the keys are released by the estate agent to the new owner of the property
The insurance for the property within your home - ie furniture, clothes and other personal possessions - click here for more information about contents insurance
A method of property purchase which involves buying in partnership with a Housing Association. The borrower purchases part of the property and rents the remainder from the Housing Association
A self-contained flat that has been converted out of part of a larger property
The process a solicitor goes through to complete the legal aspects of your purchase
Enquiry made on the credit history of an applicant, normally by reference to one of the major credit agencies such as Equifax
The means by which many lenders assess the risk of taking you on as a borrower based on your financial record and income
The standard terms and conditions applied by a lender for acceptable loan applications. These vary from mortgage to mortgage
The length of time you have spent with your current employer
Money paid on exchange of contracts
Costs incurred by solicitors in carrying out their work which they re-charge to their client - this can include photocopying, postage and couriers
A type of mortgage where the interest rate is lower than the current standard variable rate for a fixed period. This is usually shown as a fixed percentage reduction against the standard rate
With some lenders there is a fee if you want to pay back your loan early - this is usually called an early repayment charge but is also sometimes (incorrectly) referred to as an early redemption fee or penalty
A written statement from an employer confirming employment, giving details of their salary and length of service
The basis of employment - ie self-employed, employed etc
The stake that you own in your home, ie the property value less the mortgage loan outstanding
Mortgage products that are only available from certain mortgage brokers or other particular distribution channels - eg Internet only
Equivalent of freehold under Scottish law
Person buying a property for the first time. Some lenders offer preferential rates to first-time buyers and vendors often prefer to sell to them as they normally able to move faster than someone with a property to sell
A type of mortgage where the repayments are based on a certain interest rate for a stated period and the amount payable will not change regardless of any changes (up or down) in the lenders standard variable rate
A type of mortgage growing in popularity where the borrower can make overpayments in order to repay the mortgage ahead of schedule or take payment holidays as their circumstances dictate
Land or property which is owned outright
Commonly used abbreviation for first-time buyer
A person who agrees to guarantee that a loan will be paid - the guarantor is therefore fully liable for the repayment of the mortgage should the borrower default on their payments
A charge made by some lenders to those who want to borrow a higher than average percentage of the value of the property
A fuller inspection of the property than the standard mortgage company valuation - payable by the borrower
A thorough document showing the monthly cost of a mortgage and any other expenses associated with the loan
The number of multiples of your salary (or combined income) a lender is prepared to lend you
The interest rate that is payable from the start of the loan - many mortgage products eg fixed and discount have an initial rate of interest which will change at the end of the initial period
A type of mortgage where you simply pay the lender the minimum amount to cover the interest on your loan and invest enough each month in an investment vehicle to build up a large enough fund to pay off the capital element of the mortgage when it comes due at the end of the agreed term
Additional income over basic salary that is of an erratic nature - additional payments to which the borrower may be entitled by which are not received on a regular basis
A mortgage application involving more than one person
A central register of property, ownership and mortgages held at HM Land Registry
Is where the land on which a property is built is not owned directly by the property purchaser - most flats and apartments in the UK are leasehold properties
Any organisation offering mortgage products
A policy which is payable upon the death of the insured - sometimes referred to as life insurance
The total amount borrowed
The percentage of the loan borrowed against the value of the property
A search of local authority record to confirm the status of the property which will reveal any proposed changes in the area such as road widening - the local authority search is normally carried out by your solicitor as part of your standard conveyancing
Usually used to describe a flat which extends over more than one floor or a flat which has its own front door at street level
A loan which is secured by the value of the land and the property occupying the land
A legal document establishing a loan on a property
The length of time before the mortgage loan is completely paid off
Insurance cover to protect your mortgage payments
A situation which occurs when the amount loaned against a property is more than the market value of the property
Newly built properties
See bad credit
A type of mortgage that is not based on personal income details
The value of a property on the basis of a willing buyer and seller in the open market
The schedule of payments that are required to be made to pay back the loan
A product feature of some mortgages which means that you can carry the same mortgage deal across to a new property if you move
A self-contained residential unit contained within a larger structure containing several self-contained units or flats all sharing a common entrance
Paying off the mortgage, either to move to another property or at the end of the mortgage term
See Early Repayment Charge
Arranging a loan on the property that the borrower already lives in - normally to obtain more attractive terms, a lower interest rate or to raise additional capital
The monthly amount due to the lender
A property which is in the process of being built under the control of the borrower. Loans on self-build properties will normally be advanced in stage payments and are subject to strict limits on loan to value
A mortgage loan where the borrower makes a statement of their income
See co-ownership
A person with the legal right of occupation - even if the property is sold to a new owner - who is able to apply to the local authority to set a fair rent
A property that is occupied by the borrower and their immediate family only
A borrower who is unable or unwilling to provide proof of income and status
A Government land tax charged as a percentage of the purchase price of a property. It is charged on all property purchases of over £125,000 with the percentage rate varying by price
Constructed of brick with a tile or slate roof - lenders tend to be more cautious of properties of non-standard construction
A detached, semi-detached or terraced house or bungalow
A type of flat comprising of a single habitable room plus a bathroom and possibly a separate kitchen
A term used to describe a lender who specialises in offering mortgages for individuals who fall into the 'bad credit' category who, for whatever reason, would find it difficult to arrange a mortgage with a traditional high-street lender
A mortgage lender's main interest rate. Fixed-rate and discount loans usually switch to SVR when the special offer period expires
The total amount due to the lender over the lifetime of the mortgage, including all fees from the lender
The loan to value ratio above which the higher lending charge is payable
A type of mortgage that links your interest rate to the Bank of England base rate. The rate you pay will move up and down in line with the base rates
The process of following the progress of a mortgage application
A form of second mortgage normally used to provide an overall loan in excess of the loan to value ratio allowed by the primary lender
An inspection carried out for the benefit of the mortgage lender to ascertain if a property offers good security
The fee for the valuation paid by the borrower, usually on application
An interest rate that will vary over the term of the loan - usually in line with the general cost of borrowing
A type of mortgage common in the 1990s where no deposit was required. 100% mortgages are no longer available.
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