| Adverse credit | This refers to things such as late or missed payments, defaults, county court judgements, Bankruptcy, involuntary arrangements, arrangements to pay, debt management plans and even payday loans taken in the last 3 years. |
| Arrangement fee | This is a fee that the lender charges, either added to the mortgage or paid upfront. It usually means you obtain a lower interest rate than their no-fee products |
| Buy to let | A type of mortgage for both first time landlords and existing landlords. Some mortgages do not require proof of income as they can be classed as self-funding, provided the rental income is sufficient. |
| Capitol and Interest | (Also known as repayment) Paying the interest as well as the mortgage balance. |
| Cash-back | Some lenders will offer cash-back on completion. Traditionally paid to your solicitor on completion, however some lenders will pay this directly to the homeowner’s bank account using the pre-agreed direct debit details. (Payment within 30 days of completion) |
| Completion | The day you get the keys and move in! |
| Contents insurance | This is a recommendation, not a legal requirement. This will protect the personal belongings in your home from such events as; fire, theft, storm and flooding |
| Conveyancer | A solicitor that deals with house sales and purchases. |
| Covenant | A condition within the title deeds that your solicitor will make you aware of prior to exchange |
| Credit score | Some lenders use this to determine whether or not they will lend to you. Recognised agencies used are; Experian, Equifax and Transunion |
| Deposit | The amount you need to put in on top of the mortgage to buy the house, this can vary depending on individual circumstances, typically start from 5% on a standard purchase, On some occasions on shared ownership, right to buy and rent to buy schemes there may be the option to do 100% and zero deposit |
| Discounted mortgages | A mortgage type usually a certain percentage below the lender’s current standard variable. It’s important to note that there is some risk as your payments could go up or down during the term |
| Equity | This is the current value of your house minus any mortgage owed, the difference is your equity eg, your house is worth £150k you have a mortgage left on there of £100k this means you have £50k equity |
| First time buyer | You are classed as a first time buyer is you have never owned any property before whether in the uk or overseas. Some lenders may class you as a first time buyer for their products if you have owned before but not for a specific number of years |
| Fixed rates | Once completed, your mortgage will be fixed for a set period (typically two, three, five or ten years, or fixed for the life of the mortgage). The rate and monthly payment figures are fixed during this period. If you pay the mortgage off early for any reason you may incur an early repayment charge (see ERC for more details) |
| Freehold | You purchase a house and own the house and the land |
| Further Advance | Available through your current lender only, you may be able to borrow some additional funds for objectives such as; home improvements, extension work, landscaping. A further advance allows you to release some of the equity from your home’s value, and the agreed amount will be added to your mortgage monthly repayment. |
| Ground rent | This is usually charged on flats, but can be also be charged on some new build properties for the maintenance of the building and/or grounds |
| Interest-only mortgages | You only pay the interest each month, meaning the full balance of the home will still be outstanding at the end of the mortgage term. You will not own the house until the balance is paid. You may plan to pay this with; the sale of the property and downsizing, from an investment or pension fund |
| Leasehold | You own the house/flat but not the land it is built on. At the end of a lease, if not extended, the ownership goes back to the leaseholder. Extending a lease will depend on the leaseholder and costs can vary significantly to do this. *It’s important to check when buying a leasehold property how long is left on the lease. (A shorter lease means it may be harder to sell in the future and can affect future buyers’ chances of obtaining a mortgage). You should also check the ground rent and service charges, including how often they increase and by how much, as lenders dislike frequent and large increases |
| Let to buy | You change your current residential mortgage to a buy to let (BTL). You may be able to release some of the equity to purchase your next home |
| Mortgage term | The amount of years that you repay your mortgage over |
| Moving home | You may still be in a fixed rate on your current property’s mortgage and could incur an early repayment charge (ERC) if you then pay that mortgage off early. If your current lender allows, we can explore the option of porting your mortgage, this means you keep your current rate and move this over to the new house. The rate is usually fixed, so you have the option to look for additional borrowing if needed to fund the move. We can also explore extending the mortgage term to keep the payments within your budget. |
| Offset mortgage | If you have a lump sum of savings you can put these into a savings account with the same bank that your mortgage is with. By doing this they will only charge the mortgage interest on the difference. (For example, with a £100k mortgage and £50k in savings, the lender will only charge interest on £50k of your mortgage). Interest is typically not paid on that savings balance, but it does mean that you avoid paying interest on your mortgage |
| Part & Part | This is where some of your mortgage balance is on repayment, and some is on interest-only, which could help keep your monthly repayments lower as you’re not paying back the full balance. However, you will need to make sure you have a suitable method of repayment at the end of the term |
| Porting | If you are still in a fixed rate mortgage with your current lender and decide to move home, porting allows you to move the rate on to the new property. Subject to affordability you may be able to borrow more and potentially extend or shorten the term of the mortgage without incurring an early repayment charge (ERC) |
| Product transfer | This is when your fixed rate ends, but rather than move to a new lender it may be more cost-efficient to stay with your current lender (or this may be your only option at the time). Instead of being stuck on standard variable rate, which can be quite costly, you can move on to a new fixed/tracker rate from their current product range |
| Purchase | The loan to buy your home. This is typically available from a 5% deposit, however the bigger the deposit the better the interest rate will be. The threshold increases at every 5% interval, so in order to receive a better rate you would need to increase your deposit by 5% |
| Re-mortgage | This is required when your fixed rate ends. You can re-mortgage up to six months before the end of your current term, meaning if the rates are low you are able to secure it in that time. It’s also important to note that if the rates then reduce during this time we can amend or reapply so that you receive the best rate possible |
| Repayment mortgage | You pay back the interest and some of the capitol balance. By keeping up to your repayments on time and in full every month, at the end of the mortgage term you will own the house outright |
| Standard Variable | (Also known as the revert rate). This is the rate that your mortgage will go on to at the end of the fixed term if you don’t do anything. This can be more costly than other options, it also means your monthly payments can change month to month as the rate can change at any time |
| Tracker mortgages | This type of mortgage tracks at a percentage above the Bank of England (BOE) rate. Because this rate changes, it means you have to be prepared and aware that your monthly payment can fluctuate. With some of these mortgages you have the option to change to a fixed rate without an early repayment charge (ERC), so if you feel you no longer want to take this payments risk, then we can look to change this mid-term |
| Valuation | The lender will conduct a basic valuation. This can be done remotely as an auto generated desktop valuation, which means they will not visit the house and is determined from online data. Or, they may do a physical valuation and visit the house. |
