October 19, 2021

Dyers Ville

Business and General

Glossary of Mortgage Terms

Mortgage

Additional Security Fee

The Additional Guarantee Fee (Mortgage Indemnity Guarantee Policy) is the fee taken to obtain an insurance policy that will protect your lender so that if you fail to pay, he or she will not suffer a loss. You must pay the Additional Security Fee and premium along with your mortgage down payment. Even if you pay a premium, remember that this policy is for your lender’s protection and not for you.

Administrative costs

The administration fee is the amount charged by your lender to start working on the documentation part of your mortgage application. This includes the cost of the home appraisal as well. Administration fees will not be refunded even if your assessment is not made or if your application is rejected.

Bad credit

Adverse credit occurs when you have a history of bad credit, bankruptcy, CCJ, or loan arrears. Bad credit can also be called bad credit, bad credit, or you could say you have a low credit score.

Agricultural Restrictions

Farm restrictions are rules that will restrict you from owning property if your job is related to agriculture.

Annual percentage rate

The Annual Percentage Rate is the rate at which you borrow money from a lender. This includes all initial and ongoing costs that you will pay over the life of the mortgage. As the name suggests, the annual percentage rate, or APR, is the cost of the mortgage quoted in an annualized rate. The annual percentage rate is a good way to compare offers from different lenders based on each loan’s annual fee.

Distribution

Sharing, or sharing, is a facility that allows you to share responsibility for utilities, property taxes, etc. with the buyer or seller of the property when you sell or buy a property.

Arrears

Arrears occur when you default on your mortgage payments or other types of debt payments. If you have arrears on your current mortgage records, you will face problems when you want to look at remortgaging or getting a new mortgage.

Setup Fee

A setup fee is the amount you must pay the lender to access a particular mortgage offer. When looking for a fixed rate, cash back, or discount rate mortgage, you will pay this fee at the time you submit your application, it must be added to the loan upon completion of the term, or it will be deducted from the loan in progress.

Assignment

An assignment is a document that transfers property rental or ownership rights from the seller to the buyer. This may be a donation policy to the building community in connection with a mortgage.

ASU

ASU is Accident, Sickness, and Unemployment insurance that covers your mortgage payments in the event of an accident, illness, or forced unemployment.

Auction

An auction is a general sale of property to the person who makes the highest bid. The highest bidder must sign a binding contract that ensures that he or she carries out all assessments, searches, etc. before the sale of the property.

Authority to Check List

An authority to examine register documents is a document from the legal or registered owner of a property that allows the buyer’s attorney to obtain information about the property.

Banker Draft

Banker drafts are a way to make payments. It looks the same as a check, but is basically a cash payment. The money goes to the bank, and they issue a certified check for the amount given.

Basic Tracker

A base rate tracker is a type of mortgage in which the interest rate varies, but is set at a premium (above) the Bank of England Base Rate for a period or for the full term of the mortgage. The best part about this type of mortgage is that it has little or no redemption penalty. This means that by making more payments, you will be able to save money on interest by paying off your mortgage earlier than the date agreed in the original mortgage contract.

Booking fee

Ordering fees or setup fees are charged when applying for a fixed or limited interest rate loan. Booking fees are usually non-refundable if charged in advance, but sometimes the booking fee is added to your final mortgage payment.

Bridge Loan

Bridging loans are useful when you want to buy property, but your ability to do so depends on selling your old property. These are short-term loans that are repaid as soon as your old property is sold. Talk to a loan advisor before taking out a bridging loan to make sure it is the best option for you.

Broker fee

A brokerage fee is paid to your debt advisor or another intermediary who helps you find the best mortgage or loan deal for your circumstances. BSA BSA, or Building Societies Association, is a group that works for the benefit of member societies.

Community Development Commission

The Building Societies Commission is the governing organization for Building Societies. This commission reports to the Minister of Finance.

Building Community

The Building Society is a joint organization that gives you money to buy or mortgage back residential property. This money comes from individual investors who are paid interest on their funds. Some public funds are also raised through commercial money markets.

Buy-to-Let

When you purchase a property solely for the purpose of renting it out, you can apply for a buy-to-let mortgage. Payments for this type of mortgage are calculated based on your projected rental income, not your personal income.

Capital and Interest

Your monthly mortgage payment consists of two parts: interest and capital. Interest payments are payments on your loan interest balance. Capital payments are payments on the amount you borrowed.

Capital Raising

A capital increase generally means remortgaging for a higher amount than you need to pay off your existing mortgage to use the excess money for other personal finance uses.

Limited Rates

A captive interest rate is an interest rate that will not exceed the standard variable interest rate for a specified period (from 1-5 years) as decided by you and your lender. If the standard variable rate falls below the capped rate, your interest rate will fall.

Refund

Cashback is the amount you receive when you take out a mortgage, the amount may be fixed or a percentage of your mortgage amount.

CCJ

CCJ stands for County Court Judgment. This is the decision the district court makes against you when you have defaulted on your debt. If you pay off the debt in question within a certain period of time, a satisfactory note will be included on your credit report to show that the debt has been repaid.

Centralized Lender

Centralized lenders are mortgage lenders that do not rely on a network of branches for distribution. Centralized loans are now provided by several development agencies. These societies operate separately from their network of branches, and they rely exclusively on mortgages from intermediary sources.

Charge

The fee is the interest on the mortgage on which the title or rental property can be held.

Fee Certificate

A fee certificate is a certificate issued by the HM Land Registry to you on your behalf as a registered right to a particular property. This certificate contains details of restrictions, mortgages, and other interest. It has three distinct sections: expense list, property list, and ownership list. If there is no mortgage on the property, it is called a Land Certificate, and it is issued to the registered owner.

Moving stuff

Movable items are movable items in your home such as furniture or your personal belongings. Head Rent The principal rent is paid by the property owner. This is equivalent to the land rent paid by the lessee.

CML

Mortgage Lender Board

Solution

Settlement is a term that describes that you have become the owner of your home after completing the formalities of selling and buying the property.

Conditional Insurance

When you take out a fixed-rate or discounted mortgage, your lender may try to persuade you to take out an insurance policy that will cover missed payments due to illness, accident, or unemployment.

Contract

A contract is a legally binding sale agreement. There are two identical copies signed by the buyer and seller, and each party keeps a copy for their records. Once both parties sign the contract, they commit to the terms of the agreement.

Vehicle

The means of transportation is a deed by which ownership rights, unregistered property rights are transferred. The deed is called an assignment if your property is not registered or leased. If the property is registered, then the person who dies is called moving.

Delivery

Conveyancing is the legal process by which the buying and selling of property takes place.

Agreement

An agreement is a guarantee given in a deed. Credit Assessment A credit assessment is a procedure that lenders use to evaluate your ability to repay before offering a loan or mortgage.

Credit Search

Credit searches are performed by lenders and credit bureaus to search your records for CCJ and other bad credit indicators.

Debt consolidation

Debt consolidation is the process by which you take out a loan or mortgage to pay off a large amount of high-interest debt. By doing this, you only need to make one payment per month, and you will save on interest costs significantly.

Deed

A deed is a legal document that shows the owner of a particular property. You can transfer ownership and lease rights by deed.

Deposit

Deposit is the amount of money you spend to buy property.

Defrost

Fee is the amount you pay the attorney for land registration fees, searches, faxes, etc.

Discount value

The discount rate is used to attract new borrowers to the lender by setting an interest rate below the standard variable rate for a guaranteed term. If you pay back the entire mortgage at a discount in the first few years, your lender may charge you an early redemption penalty.

Early Redemption Penalty

An early redemption penalty is charged by your lender if you make part or all of the payment of your mortgage amount before the completion of your mortgage term. This penalty will also be imposed if you decide to re-mortgage and transfer your mortgage to a new lender. Early redemption penalties mainly apply to flat rates, discount rates, and cash back mortgages.

Convenience

Convenience is a right that one property owner has to use another’s land for a limited purpose, such as a right of transfer.

Waqf Mortgage

An endowment mortgage is an interest-only mortgage that is backed by an endowment policy. During the term of the mortgage, you will only pay interest to the lender, and your premium is in turn paid into an endowment policy that will mature over the term of your mortgage. Endowment policies are designed to pay off your mortgage as well as act as life insurance. However, you cannot depend on this amount to be sufficient to pay all your debts.

Donation

There are different types of endowments, but here an endowment is a life insurance policy that will only pay interest on your mortgage.

Equity

Equity is the sum of the values ​​in your home. This is the value of your home minus the amount left to pay off your mortgage.

Equity Release

An equity release is a way of releasing money from the value of your home either all at once or in monthly installments. This money can be used for home improvements, debt consolidation, or other major expenses.

Contract Exchange

A contract exchange occurs when a buyer and seller of a property sign and exchange a contract detailing the property, price, date, and terms of the agreement. When contracts are signed, they become legally binding, and legal action can be taken against anyone who violates the contract.

Existing obligations

Existing liabilities are all financial commitments outside of your mortgage. Existing obligations may include bank loans, credit card debt, maintenance payments, etc.

First Time Buyer (FTB or FTP)

First-time buyers are people who have never owned a property before.

Fixed Rate

A fixed interest rate is when you pay a certain amount of interest on a loan for a certain period of time. Lenders provide loans with fixed interest rates for short terms (three and six months) up to 25 years. The early redemption penalty applies if you pay off the mortgage before the end of the fixed rate term.

Flexible Schema

Flexible schemes are a new way of calculating mortgage interest costs. Lenders calculate interest daily, not annual. The new interest rate will only affect the remaining mortgage balance. By making more payments regularly, you can pay off your loans faster, saving you a lot of interest costs.

equipment

Equipment is an item attached to your property, and is therefore legally part of the property.

Right of ownership

Ownership means that you have ownership of the property for an indefinite period of time. This differs from a lease which means that the property is only under your control for a limited period of time.

Forward Further

A further down payment is an additional loan to your existing mortgage from your existing lender. The money from a further down payment can be used for home improvements, to purchase self-owned property, or for personal purposes such as debt consolidation.

guarantor

A guarantor is a person who assures a lender that the borrower is eligible for a loan or mortgage. If the borrower fails to make a payment, the guarantor will pay it.

Looking to

Gazumping occurs when a seller agrees to sell a property to one person, and they proceed to reject the offer in favor of a higher person.

Land rent

Land rent is the amount that the tenant has to pay to the free holder each year.

Home Buyer Report

A home buyer report is made by the lender after a mortgage assessment has been carried out and before a full survey is conducted to give the borrower a complete understanding of the property they are thinking of buying.

Revenue Multiplier

An income multiplier is a type of calculation that a lender will use to calculate the amount a borrower can receive. The most common income multipliers are three times single income or two and a half times joint income. The lender will choose the one that yields the higher amount. Lenders are more flexible if your LTV ratio is low.

Income Protection Insurance

With income protection insurance, your monthly payments will be covered in the event of illness, accident, or unemployment.

intermediary

The intermediary is the mediator who finds the best mortgage for you, and they also arrange the mortgage for you on your behalf.

Land Registration Fee

A land registration fee is paid when you want to register ownership of your property or when you want to change the registered rights to the property.

rental

Unlike a property right where the property is owned, a lease is when the property is owned, but the land on which it is built is not owned by the lessee. Their control of the property was only for a few years.

Licensed Conveyor

Licensed conveyors are like lawyers because they specialize in the legality of buying and selling property.

Local Authority Search

Local authority searches are conducted by lawyers for people planning to buy your property. They check to make sure there is no development planned on the property such as roads or buildings. They will check any planning permits or enforcement notices posted on your property.

LTV

LTV, or loan to value, is the percentage you get by dividing the value of your property by your mortgage amount. Low LTV is much riskier for lenders than 100% LTV.

Loan Consolidation

Loan consolidation occurs when a loan is taken out to pay off another loan with a higher interest rate or to pay off a number of high-interest debt. Loan consolidation is often achieved through remortgaging.

MIG

MIG, or mortgage indemnity guarantee, is insurance issued to protect their lenders if their property is repossessed, and the lender is unable to recover their money. A MIG is paid upon settlement of the mortgage.

FLUID

MIRAS, or mortgage interest relief at source, was a tax break granted to those with mortgages, but this waiver was abolished by the government in April 2000.

Mortgage right

A mortgage is a loan that allows a person to buy a property. The property itself is collateral for the loan.

Mortgage right

The mortgagee is the company or organization that finances your mortgage.

Mortgagor

A mortgage is a person who takes out a mortgage to buy a property.

MPPI

MPPI, or mortgage payment protection insurance, is insurance that is taken out in the event of an accident, illness, or involuntary unemployment that prevents them from making monthly mortgage payments.

MRP

MRP, or mortgage payment protection, is insurance that is taken out through your lender for the term of your loan.

Negative Equity

Negative equity occurs when the money you owe your mortgage lender is greater than the value of your property. People find themselves in negative equity situations when they take out a 100% LTV mortgage.

overpayment

An overpayment occurs when you pay more than the usual monthly payments on your mortgage so that the mortgage is paid off before the end of the mortgage term. With an overpayment, you can save money on interest, but you may also incur early redemption penalties. Vacation Payments Vacation pay is the period during which you do not make mortgage payments. These are usually available with flexible mortgages only.

SPIRIT

A PEP, or personal equity plan, allows you to own stock or unit trusts without paying any taxes.

Private Pension

Personal retirement provides for your financial needs after retirement. You make structured payments into your retirement savings during your working years. Often, some of this money can be taken to pay off your mortgage obligations.

Portability

Portability is a term used to describe a mortgage that can be transferred between properties when you move from one house to another.

Redemption

Redemption is when you pay off your mortgage, when you re-mortgage, or when you move into a new home.

Remittance fee

A remittance fee is charged by the lender for sending the mortgage amount to your attorney.

mortgage right

A remortgage is a loan taken from a new lender or a loan renegotiated with your existing lender to pay off your existing mortgage. This is done to reduce the interest rate you pay or to add additional capital.

Repayment Mortgage

A repayment mortgage is when part of your monthly payment is used for interest and another part of the payment is used for principal. This is also known as a capital and interest mortgage. If payments are made regularly, the entire loan amount will be repaid at the end of the term.

Storage

Retention is an amount that your lender continues to hold until certain conditions of your mortgage are met.

Withdrawal

Repossession is a legal process in which the mortgaged property is under the control of your lender due to incomplete payments. Your property can then be sold at a public auction.

Right to Buy

The right to purchase means that you can legally purchase the property at a discount if you have been a tenant for a sufficiently long period of time.

Sealing Fee

The sealing fee is the amount your lender charges when you pay back your mortgage.

Self-Certification on Income

Self-earning certification means you confirm how much you earn, and lenders don’t need third-party proof of your income. Self-certification is useful for self-employed or contract workers.

Joint Ownership

Co-ownership is a scheme designed by a housing association that requires you to pay mortgage payments on the part of the property you own while you also make monthly rental payments on the part of the property owned by the building association.

Lawyer

Lawyers are the people who provide legal advice and do all the legal work for mortgage and remortgage transactions. Stamp Duty Stamp duty is a tax paid to the government on the purchase of property.

SVR

The SVR, or standard variable rate, is the lender’s base rate. This can change at any time depending on the lender. The SVR will fluctuate based on the Bank of England Base Rate.

Structural Survey

A structural survey is a thorough inspection of the property carried out by a professional surveyor.

Length of service

Ownership means the type of rights that a person has over the property or land on which he or she stands. Tenures can be either property rights or lease rights, for example.

stock

The term of the mortgage is the number of years in which you plan to pay off your mortgage.

Tie-in period

A tie-in period is the amount of time that you are tied to a lender. Tie-in periods often come with special mortgage offers such as flat, capped, or discounted rates. If you transfer your mortgage to a different lender during this period, you will be charged an early redemption fee.

Title of Deed

A title deed is a legal document that validates ownership of your property. The title deed proves your actual and legal title to your property.

Transfer Deed

A transfer deed is a legal deed used to transfer ownership of your property to a buyer.

unburdened

The term unencumbered means that you own your property directly without a mortgage or loan against it.

Evaluation

A property valuation is a survey carried out on a property by a qualified surveyor to appraise the value of a property. This appraisal is done on behalf of your lender so they can confirm the value of your property.

Variable Rate

A variable rate means that your interest rate can change from month to month causing your payments to fluctuate each month.

peddler

The vendor is the person from whom you buy the property.