Unemployment Insurance provides an income to the insured on
occurance of any of the events. Can have deferred (delayed)
period of payment and can be bought in blocks' of benefit.
Check the small print for exclusions!
Annual Percentage Rate is the true
cost of borrowing as it includes any fees (see Fees) with the
repayments of the loan.
The transfer of ownership of
an asset from one person to another.
The rate of interest
set by the Bank of England.
The lenders fee for
reserving a particular rate for a borrower, usually related to
a fixed rate
A short term loan
usually used to cover a period between selling a property and
buying a new one if simultaneous Exchange of
Contracts/Completion is not possible. Can be expensive!
A fee charged by a
broker the use their services
Buy to Let
Simply, this is a
mortgage type where-by a borrower intends to let out the new
property or property already owned to tenants as a form of
A one office
lender. No network of branches, just a HQ in one location.
Normal monthly living costs
which will include any credit, mortgage and
The day you pick up
your keys' to your new purchase. You are now the legal owner
and all monies have been transferred to the vendor
(seller) via the solicitor(s).
mortgage schemes insist on the borrower having the insurances
specified with them as a condition on offering the mortgage.
Normally this will be the buildings/contents insurance.
The legal work
carried out by a solicitor or licensed conveyancer for the
transfer of property ownership from seller to buyer.
CCJ (County Court Judgement)
debt ruling issued by a County Court. This will show on any
credit check taken up by a mortgage lender.
information (whether good or bad) and voters roll information
is logged by various agencies used by lenders. The lenders
check the details when an application for a loan is received
and the information is used, by underwriters, when deciding to
lend the money. This information is called your credit
history' and you will have a credit rating/score' depending
on the details held and a credit report is provided to the
applicant, if requested.
Historically mortgage interest was
charged to your account monthly or annually. Any payments made
by you between charging dates would not reduce the balance
until the end of the month or year. Daily charging means you
get the benefit of a reduced balance the day after.
If you fall into arrears with
any credit agreement after reminder letters then a lender may
register this as a default' on your credit file.
The borrowers down
payment' towards the purchase price of a property. The balance
is usually financed by a loan (mortgage).
The profit' margin in a
property, calculated by subtracting any mortgages or other
secured loans away from the value. An equity release mortgage
or re-mortgage can release this tied-up' capital, to be used
for most legal reasons.
Exchange of Contracts
and seller confirm legally binding commitments to the
sale/purchase & agree to the terms and conditions of this
transaction. This happens prior to Completion.
Arrangement Fee, the lenders
administration fee for a particular mortgage
The holder of the
charge (usually a mortgage company) has a legal right to the
first call on the property in the event that the borrower
defaults on repayments.
Gives the owner
ownership of the property and the land on which the property
stands (ie. is built).
A person, other than
the borrower, who guarantees the mortgage repayments in the
event the borrower defaults. Normally a parent or blood'
A formal quotation
of the cost of a particular mortgage scheme, including fees,
early redemption charges (see Redemption Charges) and other
The lenders' formula
used to calculate how much they can lend you, based on your
income. This can vary from lender to lender.
ISA (Individual Savings
A TAX FREE investment product,
available to all. It can held as cash (like a normal building
society account), shares, life assurance or a combination of
these within certain limits for each. An ISA can be used to
repay a mortgage.
Property ownership only
and not the land on which it is built.
A document which is
held at the Land Registry detailing who has first claim on a
property. Usually this is the owner.
LTA (Level Term Assurance)
assurance policy that pays out a lump sum, which remain the
same throughout the chosen term of the policy, on the death of
the named person on the policy documents. (DTA v Decreasing
Term Assurance, pays out a reducing lump sum over time).
LTV (Loan To Value)
expressed as a percentage of the loan/mortgage in place or
required against the value/purchase price of the property eg.
Value ?100000, mortgage ?70000, therefore LTV is 70%.
Mortgage Code Arbitration Scheme
disputes between borrowers and lenders to be settled without
court action. Administered under the Mortgage Code.
The legal document
that confers title or ownership of a property.
MIG (Mortgage Indemnity Insurance) / High
Percentage Lending Fee / Additional Security
An insurance policy taken out by the
lender against any loss incurred by them, by the borrower
defaulting on their mortgage payments. Usually paid by the
borrower above certain LTV's.
The mortgage lender
The mortgage borrower
The value of the
property is less than any mortgage/loan secured on it.
break in mortgage payments, normally when the borrower has a
Flexible Mortgage, where overpayments have previously been
made. Underpayments can also be made if overpayments have been
previously made in this instance.
to transfer your current mortgage scheme to a new property
without incurring any mortgage related costs or penalties.
Redemption Penalties/Charges/Early Redemption
Fees paid by the borrower if the
mortgage is paid off or part paid off before the end of the
particular scheme with the lender. This is an important area
to get clear before you commit to a particular mortgage
The lender keeps back
some of the proposed mortgage until certain conditions are
met. Usually related to the state of repair of the property
revealed by the valuation report.
required to build a brand new house. Usually released in
staged payments at various stages of the build.
confirms his/her income. No income checks are made by the
The borrower buys
part of the property and the remaining part is still owned by
the developer/Housing Association. This part is usually
chargeable to rent to the borrower.
A Government Tax paid
by the purchaser. Currently no duty is paid on a purchase
price up to ?60000 with the rate increasing to 4% for purchase
prices over ?500000.
of the property, to be bought, by a qualified surveyor.
This can be arranged privately, however, generally this
arranged through the lender via their authorised panel. There
are three levels of survey/valuation that can be arranged;
Mortgage Survey/Home Buyers Report/Full Structural Survey and
they increase in price the more detailed they become.
The stated cost of
the survey, usually related to the proposed purchase price of
A property where
the main construction components are wood rather than brick,
stone or concrete. Generally, more difficult to obtain a
A property with no
loans/mortgages or any borrowings on it.