Mortgage Glossary

Bringing on 5 cases p/m can give you an additional income of £10800 per year

Normal Brokers would give you £6000 per year

Your Comprehensive Guide to Mortgage and Property Terminology

The Annual Percentage Rate of Charge represents the total cost of credit to a consumer annually.

Automated Valuation Model estimates property values based on recent local sales and trends without an onsite surveyor.

The core interest rate set by the Bank of England, influencing lenders’ Standard Variable Rates (SVR).

An agreement within a profession to create a compensation fund for consumer protection. Buildings Insurance:

Covers property damage; its amount insured may vary based on the property’s valuation or purchase price.

Buying property for investment with rental income and potential capital growth.

A repayment mortgage involving monthly repayments of both interest and a portion of the capital.

A mortgage limiting the interest rate from exceeding a specified level for a fixed period.

A sum given by a lender to a customer at the start of a mortgage contract.

The final stage of house-buying after the exchange of contracts.

Compulsory insurances often required by lenders for specific mortgages.

Regulated buy-to-let mortgages for non-business purposes, offering greater protection.

Covers personal belongings in a home; often separate from buildings insurance.

Legal processes ensuring property ownership, mortgages, and planning information.

Local authority tax based on property valuation; tenants often pay in rented properties.

A court ruling due to debt default, affecting credit records.

Holds centralized credit records used by lenders to assess applicants. Current Account: Bank account with cheque or debit facilities; offers limited or no interest.

Formal documents detailing property ownership and mortgage information.

Initial lump sum payment contributed by the buyer towards the property purchase.

A method of saving based on regular, interest-bearing deposits.

A mortgage with an interest rate below the lender’s SVR for a fixed period.

Mortgages not completed face-to-face.

Strategy spreading investments across various types for risk reduction.

Documents capable of being stored and reproduced for future reference.

Fees charged if the loan is repaid before a specified date.

Description of a borrower’s working arrangements impacting mortgage approval.

A mortgage funded by an insurance-based savings plan, repaid at term end.

Legally binding property sale commitment post contract exchange.

Service without advice, only executing customer orders.

A mortgage with a fixed interest rate for a specific period.

Allows overpayments, payment holidays, and other flexible features.

Specialized loans for recent graduates to buy properties.

Income or value before tax or deductions.

Investment strategy aimed at maximizing capital value.

Insurance premium for higher Loan-To-Value (LTV) mortgages.

Joint insurance for property structure and personal belongings.

Lender’s estimate of monthly payments and costs under a specific loan.

Specialist loans for customers with credit issues.

Investment strategy seeking to generate income for regular expenses.

Unbiased advice considering the entire mortgage market.

Fee paid by a borrower to a lender for borrowing money.

Pays only interest during the mortgage term, repaying capital separately.

Mortgage funded by Individual Savings Account contributions.

Assists landlords in property acquisition, tenant search, and rental management.

The amount you want to borrow divided by the purchase price, indicating the deposit’s size.

Examines planning records for future developments or site restrictions.

Interest rate among banks influencing mortgage rates.

Wholesale lending markets for financial institutions.

Provides advice on regulated mortgage contracts.

Switching a mortgage from one lender to another without moving house.

The full lifespan of a mortgage; typically ranges from 5 to 30 years.

Income or value after tax or deductions.

Loan without disclosed income details.

Use savings to offset mortgage debt and reduce interest payments.

Repaying more than the required mortgage amount; often penalty-free.

Temporarily halting regular mortgage repayments.

Uses personal pensions to repay a mortgage’s capital.

In the context of insurance, a regular sum you pay to keep your cover in force.

The process of switching your mortgage loan from one lender to another without moving house. Repayment Mortgage: A mortgage loan funded by simple monthly repayments, calculated to repay capital and interest usually over a term of 25 years.

The means by which a mortgage loan’s capital is repaid.

A local authority search examines planning records for future developments or site restrictions.

If you default, the lender can repossess your property to recover their money.

For self-employed people who do not have pay slips or regular income to confirm to a lender.

Helps finance the building and ownership of a self-built house.

The tax levied by the government on house purchases.

A mortgage lender’s main interest rate.

The process of cashing in an unwanted endowment policy with the insurer.

Mortgages linked to a benchmark rate, often Bank of England base rate.

A mortgage repayment smaller than the regular agreed sum.