Working for you

[A-C]:

APR
Abbreviation for Annual Percentage Rate. Where an APR is quoted it will be based on the total charge for credit.

ARREARS
When a mortgage holder falls behind on their mortgage payments the missed payments are known as "arrears", a mortgage account which has outstanding missed payments is known to be "in arrears".

ASSIGNMENT
A legal transfer of rights or benefits, e.g. in your mortgage, a lease or life assurance policy.

BANKRUPTCY
A person is declared bankrupt when their debts outweigh their assets. While bankrupt a person is not allowed to have a mortgage or borrow money in his or her own right.

CAPITAL REPAYMENT MORTGAGE
(Also known as a capital and interest mortgage). With this type of mortgage you repay part of the capital each month plus interest on the outstanding amount over an agreed number of years and at the end of the term the mortgage will be repaid in full.

CERTIFICATE OF TITLE
(Also known as Report on Title). The document prepared by the solicitor for the lender confirming all formalities are satisfactory, prior to completion.

CHARGE
Secured lending on the property.

COMPLETION
The formal conclusion of the transaction when the mortgage monies are handed over and legal formalities are dealt with.

CONTRACT
A legal agreement between purchaser and seller, which binds both to complete the sale and purchase of the property. It is prepared in duplicate and each party signs a copy. When your solicitor exchanges these contracts, the obligation to buy and sell becomes legally binding.

CONSUMER CREDIT ACT
Regulates certain secured and unsecured lending up to £25,000.

CONVEYANCE
The document that transfers the land ownership usually where the title is changing.

COUNTY COURT JUDGEMENT (CCJ)
This is where a county court will make a decision over an outstanding debt, and order that payment must be made, usually in monthly instalments. CCJs will appear on your credit file and will be marked as satisfied once the debt has been repaid.

CREDIT SCORING
A technique based on probabilities used to assess the degree of risk exposure arising from a potential lending situation.

[D-F]:

DISBURSEMENTS
Amounts that your solicitor has to pay out on your behalf in connection with the transaction, e.g. local authority searches, land registry fees, etc.

DISCOUNTED RATE
This is a discount from the standard variable rate for a set length of time.

DISCHARGED BANKRUPTCY
Usually a person will remain bankrupt for 3 years, after which they will be discharged from bankruptcy and can once again borrow money, although many discharged bankrupts will have trouble obtaining finance for some years after being discharged.

EARLY REPAYMENT CHARGE
This is charged if the loan is repaid prior to a set period as laid down in the terms & conditions of the loan.

ENDOWMENT
An investment vehicle combined with life assurance over a specific term. Typically used in conjunction with an interest only mortgage.

EQUITY
The difference between the value of the property and the amount of mortgage outstanding. NB, can be positive or negative.

FEUHOLD
The Scottish term for the right to absolute ownership in land.

FREEHOLD
The right of absolute ownership in land.

[G-I]:

GROUND RENT
An annual sum paid by the leaseholder to the freeholder as a rental amount for the ground on which the property stands, which the freeholder actually owns.

HIGHER LENDING CHARGE
A single premium policy, paid for by the borrower on completion of the mortgage. It insures the lender for losses in excess of % of the loan-to-value sum. The borrower still remains liable for any amount claimed.

INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)
An IVA is an alternative to bankruptcy; a person can enter into an IVA and pay the maximum possible amount to the creditors to repay their debts. These are seen as a preferable option than Bankruptcy.

INTEREST ONLY OR PART INTEREST ONLY MORTGAGES
Interest only or part interest only mortgages are where interest is paid on the mortgage each month and all or part of the capital remains outstanding. You make a separate payment into a repayment vehicle such as an endowment, a personal pension or an ISA.

An endowment is an investment vehicle combined with life assurance over a specific term.

A pension can be used to repay your mortgage subject to certain limitations.

An ISA is a tax free investment vehicle, subject to certain limits, designed to pay off your mortgage on maturity.

If you enter into an interest only or part interest only mortgage you must maintain throughout the term of your mortgage a repayment vehicle that will provide you with enough money at the end of the mortgage term to enable all monies under the mortgage to be repaid in full. Failure to do so may have adverse financial consequences. You are responsible for ensuring that a suitable repayment vehicle remains in place until the mortgage is repaid.

If there is no means of repaying the mortgage at the end of the mortgage term your lender may seek to recover the outstanding mortgage amount through the sale of your property.

INTEREST RATE
This is the rate at which the interest charged on your mortgage is calculated.

[J-L]:

LAND REGISTRY FEE
A fee paid to H.M. Land Registry to register changes to the title, e.g. new ownership.

LAND TENURE
This is the right to hold property in the UK.

LEASE
A contract with rights and obligations between freeholders and tenant. The freeholder grants the tenant a leasehold interest in the land.

LEASEHOLD
A right to exclusive possession of land for a fixed term of years, where the freehold is owned by a third party.

LOAN TO VALUE (LTV)
Expressed as a percentage, the Loan to Value is the percentage of the value of your property which you are looking to borrow.

LOCAL AUTHORITY SEARCH
A search made by the purchaser's solicitor at the local authority for the area in which the property is situated. This search would reveal detail such as the maintenance responsibility of roads and footpaths serving the property, road proposals in the immediate vicinity, whether the property is connected by the mains drain, or any planning matters affecting the property which could adversely affect the property in the future.

[M-O]:

MORTGAGE
A loan that is secured on your home.

MORTGAGE CONDITIONS
These are usually contained in a lender's booklet, which together with the terms of your offer (see: standard offer conditions), form the basis of the terms and conditions of your mortgage following completion.

MORTGAGE OFFER
The document which states that the lender is prepared to offer a mortgage for the purchase or remortgage of a property. This document will give details on the exact amount of money that will be lent to you and on what terms.

MORTGAGE PAYMENT PROTECTION
(Also known as Mortgage Repayment Protector). An insurance policy designed to cover mortgage payments during uncertain financial situations caused by illness, accident or involuntary unemployment.

[P-R]:

PANEL VALUER
An independent valuer with whom a lending institute is prepared to arrange inspections of property to determine the adequacy of security for loans.

REMORTGAGE
Mortgaging a property you already own, usually replacing an existing mortgage. You can remortgage to obtain lower monthly payments, or if you have sufficient equity in you property, to raise money for a number of purposes.

RETENTION
An amount kept back from the mortgage by the lender until certain works or other requirements to the property are complete.

[S-U]:

SEALING FEE
Charge made for discharging the mortgage.

SECURED LOAN
This is a loan secured on a property, sometimes known as a second mortgage; it will usually be a second charge (the mortgage being the first charge).

SOLICITOR
The lawyer who represents the parties in a transaction who takes care of all the legalities.

SPECIAL CONDITIONS
These are the conditions specific to your mortgage and are contained in your mortgage offer.

STAMP DUTY
This is a tax payable on purchases above a level set by the government. The amount depends on the purchase price of the property. Stamp duty may also be payable upon a remortgage where there is a transfer of ownership.

STANDARD OFFER CONDITIONS
These are printed conditions, which together with any special conditions, the mortgage offer and the mortgage conditions, form the terms of the mortgage.

STANDARD VARIABLE RATE (SVR)
This is a lenders own base rate. It is usually linked to either the bank of England base rate, Barclays base rate or LIBOR, although not necessarily. The SVR can change at the lenders will.

TELEGRAPHIC TRANSFER FEE
(Also known as Remittance Fee). This is charged for sending sums of money electronically.

TERM
A period in years. Eg. A mortgage term, the length (in years) of the mortgage.

TITLE
The right to ownership of land.

TITLE DEEDS
The documents which prove the title. These may be in the form of conveyances or may be an extract of the records held at H.M. Land Registry.

TRANSFER
The document that transfers the land where the title is registered.

TRANSFER OF EQUITY
The process of adding or removing a party from a mortgage.

UNDERTAKING
A legal promise to complete a task.

[V-Z]:

VALUATION REPORT
This is carried out on behalf of the lender and is purely to find out the suitability of the property for lending purposes. A mortgage valuation is prepared on behalf of the lender and may not be relied upon by you for any purpose. There are other valuation reports that are available to you. These consist of a home buyers report and a full structural survey. A full structural survey is a thorough and complete inspection of the property. A 'Home Buyers' report is a 'halfway house' between the basic valuation and a full structural search, completed on your behalf. If you wish for either of these valuations to be carried out, the prices will vary.