Glossary Of Terms
Please find below a list of terms most commonly associated with mortgages, remortgages and the whole home moving and remortgageing process. If you are interested in finding out the latest remortgage rates and looking to remortgage then one of our mortgage advisors will be happy to help you, we do not charge fees and even complate all those lengthy forms. Just on the '*Quote Enquiry*' button or call us on the number above.
Additional Loading
Extra charges attached to buying or selling shares in a mutual fund.
Annual Percentage Rate or APR
Yearly rate of interest paid on a loan or investment. Includes advertised interest rate and associated fees.
ASU Insurance
An acronym for Accident, Sickness, and Unemployment Insurance. Private insurance that provides income for a set period in case of inability to work or redundancy.
Buildings Insurance
Private insurance that covers many types of damage to structures.
Capital and Interest Mortgage - Repayment Mortgage
The most straightforward type of mortgage. Money borrowed against a property is paid back concurrently toward the interest and capital owed.
Capped rate mortgages
A type of mortgage in which the interest owed by the debtor cannot exceed a certain rate, but can fall below it. The cap usually is only in effect for the initial mortgage period.
Cashback
A kind of mortgage that provides the borrower with a lump sum of cash after securing the loan. Typically 5% of the value of the mortgage.
CCJ
An acronym for County Court Judgment, a UK court order to pay an outstanding debt. If left unpaid after one month, a CCJ will enter the court register and be listed on credit records for six years.
CeMAP
An acronym for Certificate of Mortgage and Advice Planning, a mandatory certification for UK mortgage advisers gained through testing.
Completion
The complete repayment of both interest and capital on a mortgage.
Contents Insurance
Private insurance that covers the furniture, appliances and other contents of homes or other structures from damage. For structural insurance, see Buildings Insurance.
Conveyancing
The transfer of the title, or ownership, of a property from one person to another.
Daily Interest
The real money amount of interest owed on a loan, reduced from the usual monthly or yearly rate to its daily rate.
Disbursements
The payment of debts or expenses, esp. to UK solicitors.
Discounted rate
A type of mortgage where the interest rate is somewhat reduced for a preliminary incentive period.
Early Redemption Payment
A financial penalty written in to some mortgages with initial incentive rates below market interest levels. Early completion of the mortgage levies the penalty payment.
Endowment
An interest-only mortgage where the capital is made through investment funded by a separate endowment policy. The endowment policy is a form of life insurance that pays out a lump sum at its term end.
Equity
In real estate, ownership equity is the difference between the assets, or worth of the property, and liabilities, the money borrowed against it.
Exchange of Contracts
A step in the process of transferring property, or conveyancing. In the UK , the exchange of contracts makes a conveyance legally binding.
Fixed Rate Mortgages
A mortgage in which the interest rate is fixed for an initial temporary period.
Flexible Mortgages
A mortgage that allows the borrower to over- or underpay their monthly bill, generally due to income fluctuation.
Freehold
The absolute ownership of real estate property that can be left to inheritors. Also known as fee simple.
FSA - Financial Services Authority
The FSA is the independent, non-governmental agency that oversees and regulates the financial services industry in Britain.
Gazumping
In British conveyancing, it is the act of pulling out on a sale for a better offer before contracts are exchanged. Gazumping exploits a loophole in English Law which has buyers makes offers without contractual assurance.
Higher Lending Charge
A fee extracted by lenders for security when issuing large loans. In a mortgage over 90% the value of the property, a high lending charge is retained in case of repossession.
Interest Only Mortgage
A mortgage where only the interest is paid monthly, while the capital is paid at the end of the mortgage. Capital funds are generally raised through investment.
Investment Vehicle
A broad term covering all forms of investment, from property to shares to mutual funds.
IPT - Insurance Premium Tax
A tax, usually either 5% or 17.5%, placed on insurance premiums with risk in the UK.
ISA - Individual Savings Account
A tax-free investment plan introduced by the British government to promote savings. Up to £7,000 may be saved annually, either or both in cash or equities like shares.
Leasehold
Real estate rented from the owner for a period of time, usually long-term. Holders of leases can then rent them out for shorter-term tenancy.
LIBOR rate
The London Inter Bank Offered Rate, or LIBOR rate, is the averaged rate of interest at which UK banks loan wholesale to one another. This rate is referenced widely to set interest rates both in and out of Britain.
Life Insurance
Generally, any of the variety of insurance in which the insurer pays out a certain sum in the event of the death - or sometimes ill health - of the policyholder. Also known as life assurance.
LTV - Loan to Value
The percentage ratio of the worth of a loan against the value of the property.
MIG - Mortgage Indemnity Guarantee
A form of insurance for a mortgage lender in case of non-payment and repossession. See also Higher Lending Charge.
Mortgage
In general, a loan taken out against a property for its purchase.
Mortgage Offer
A simplified summary of a proffered mortgage given to borrower to clarify the loan's details.
Negative Equity
In mortgages or other secured loans, the condition of the liability, or debt, being more than the equity, or property's worth.
Offset Mortgage
A real estate loan in which interest earnings from a saving or other account is diverted to lessen interest payments on the mortgage.
Portability
The capability to transfer and retain pension entitlements when switching jobs.
Remittance Fee
A fee paid to a lender for transmitting funds to the solicitor in order to complete the mortgage.
Remortgage
Taking a fresh mortgage on an already-mortgaged property. In a remortgage, the remainder of the old mortgage debt is paid off by the new loan.
Repayment Mortgage
A home loan where the interest and capital are both gradually and concurrently repaid, with the interest absorbing the bulk of initial payments. Also known as a Capital and Interest Loan.
Self Certified - Self Certification
Also referred to as "self cert," this is a loan, such as a mortgage, that does not require standard documentation but rather a personal estimation of expected earnings. It is tailored toward self-employed income earners or others with unorthodox income.
Solicitors
Typically, a lawyer engaged in conveyance - the transfer of property, and other non-court duties.
Stamp Duty
A tax levied on all property transactions above a set amount, usually £60,000 or more.
Standard Variable Rate Mortgage
A home loan in which the interest rate is based on the Standard Variable Rate (SVR) as set by the Bank of England.
Tenure
Also Land Tenure, it is the ownership of property, be it for a limited period (Leasehold) or total ownership (Freehold)
Term
The period of a mortgage. At the end of the term the mortgage must be paid in full, either finally or through remortgage.
Tie in period
The term given to the temporary initial period of many mortgages in which interest rates are suppressed. This discounted period is used to tie customers in to the mortgage.
Title Deeds
The documents that represent and verify the ownership of a property on the UK Land Registry. In a full land transaction, these are the last things exchanged.
Transfer Deeds
A lesser document than the Title Deed, this indicates tenure on the UK Land Registry.
Tracker rate Mortgage
A mortgage where the interest is tied to the Bank of England's base interest rate. See also Standard Variable Rate Mortgage.
Valuation
A preliminary survey conducted on behalf of lenders to establish the rough worth of a property.