Secured Loans

Unsecured Loans

Mortgages

Equity Release Mortgages

Credit Repair

Commercial Loans

Vehicle Finance

Insurance Quotes

Sell Endowment

Subscribe to our FREE newsletter dealing with personal finance,money saving and general tips. Just enter your email address in the box and press 'subscribe'.

Debt Elimination

GLOSSARY OF MORTGAGE TERMS

Advance
The mortgage loan

APR
Annual Percentage Rate. This compares the cost of capital and takes into account most of the up-front and ongoing costs involved in a mortgage.

Arrangement fee
A fee you pay to the lender in return for a mortgage deal. This deal could be fixed, discounted or cashback.

Capital and Interest
Your monthly payments are partly to pay the interest on the amount you borrowed and partly to repay the outstanding mortgage.

Capped rate
An interest rate charged for a set period of months or years which can go up and down with the variable rate, but there is a maximum (capped) interest which it cannot go above.

Cashback
A payment you receive when you take out a mortgage. It may be a fixed amount, or a percentage of the amount of the mortgage.

CCJ
County Court Judgment. A decision reached in the County Court which can be for not paying debts. If you pay off the debt, the CCJ is satisfied and a note is put on your records to say this.

Credit scoring
A lender's way of assessing whether you are a good risk to lend a mortgage to.

Credit Search
A check the lender makes with a specialist company to find out whether you have any CCJs or a bad credit record.

Discounted rate
A guaranteed reduction in the standard variable mortgage rate. This often lasts for an agreed period.

Early redemption charges
A fee charged by the lender if you pay off all or part of your mortgage before an agreed date or you move the loan to another lender. These charges usually apply on fixed, discounted, or cashback mortgages.

Endowment
A life assurance policy that is designed to produce a lump sum to pay off an interest-only mortgage. There are different types of endowments.

Equity
The amount of value in a property that isn't covered by a mortgage - simply take the amount of the mortgage from the valuation to work out the equity.

Equity release
You take a new, larger mortgage, or increase a mortgage you already have and use some or all of the extra money you have raised for home improvements, holidays and so on.

Exchange of contracts
Where you snd the person selling the property sign and swap identical contracts that show the price and what fixtures and fitting are being sold, as well as the finalised date. When you exchange the deal becomes legally binding and if you or the seller pull out before completion, you or they will have to pay compensation.

Fixed rate
The interest charged on the mortgage is for a set amount for an agreed period of months or years.

Flexible mortgage
A type of mortgage where you can make extra payments and even underpayments without paying a charge or penalty.

Freehold
This is where you own the property and the land it is on.

Ground rent
A fee that a leaseholder has to pay the freeholder every year.

Homebuyer's report
When a professional surveyor checks the structural state of a property. This is more detailed thana valuation but less detailed than the structural survey. The report is optional and you pay the bill; but this report should pick up possible problems and may give you the chance to negotiate a lower price.

Income multipliers or multiples
The size of mortgage that lenders will offer will often be worked out by multiplying your income each year by a set figure. If you are the only person taking out the mortgage, the usual maximum income multiple is three times your yearly income. If you are taking out a mortgage with someone else, the multipliers might be three times the main income plus two times the second income. Or it could be two and a half times the two combined incomes. Lenders may consider including all or part of any regular bonuses or commission you receive.

Income protection insurance
This covers accident,sickness and unemployment. It provides a monthly payment if you cannot work for an extended period due to an accident,sickness or unemployment.

Interest-only
Your monthly payments are simply made up of interest. You do not pay off any of the mortgage during the term of the mortgage. You pay of the mortgage finally using the proceeds of a seperate investment plan for example, an endowment, personal pension or PEP and so on.

Leasehold
This is when you own the property for a set number of years, after which it goes back to the freeholder. Most flats are on leasehold, and although lenders will lend on leasehold properties, they will demand that there is a number of years left on the lease before making a loan.

LTV
Loan to value. This is the size of the mortgage as a percentage of the value of the property or the price you are paying for the property.

Mortgage
A loan to buy a property where you put up the property as security against you paying back the loan.

MRP
Mortgage Repayment Protection. This is insurance you take through the lender when you take out the loan.

Negative equity
Where the money you owe on the mortgage is greater than the value of the property.

Non-status
The lender does not need employment or income references from you. This type of loan is often offered to self-employed people.

Remortgage
A new mortgage although you are not moving home.

Repayment
Your monthly payments are partly to pay the interest on the amount you borrowed and partly to pay the outstanding mortgage.

Self-certified
You confirm how much you earn, and the lender does not need any references.

Stamp Duty
A tax you pay on properties which cost over £60,000.

Structural survey
This is the most wide ranging check of the outside and inside of a property. This is carried out by professional surveyor and it should pick up all but the most hidden faults.

SVR
Standard variable rate. The interest rate the lender charges goes up and down, with your interest payments changing accordingly.

Tie-in period
As a condition of a special mortgage deal, you may have to agree to stay with the lender for a period of months or years after the deal has ended. If you move your mortgage elsewhere during this period, you may have to pay an early redemption charge.

Term
The period of years over which you take the mortgage and when you have to repay it.

Valuation
A simple check of the property in order to find out how much it is worth and whether it is suitable to lend a mortgage on.

Variable rate
The interest rate the lender charges goes up and down, with your interest payments changing accordingly.

Click here now for mortgage enquiry form

The following articles provide useful general advice and information about different types of mortgages.

Looking to remortgage? - Switch home loans and cut your costs

First time buyer? - Get a leg up onto the housing ladder

Save money with a flexible mortgage

The rise of the flexible mortgage

Repayment loans are back in fashion

Looking for buy to let? - Read this

Got an endowment mortgage? - You must read this

Great part-time new business opportunity