Useful Information
Mortgage Jargon Buster A-Z
Arrangement Fee
This is our fee for consulting and arranging your mortgage.
Base Rate
This is the basic rate of interest set periodically by the Bank of England.
Buy to Let
This is when you purchase a property to rent out (one in which you will not live in).
Completion of Contracts
That all important moment when your solicitor confirms that all the legal work has been completed and your lender releases the funds to your solicitor for your purchase or remortgage. The date that this takes place will be one that is agreed by all parties.
Conveyancer
This is what you have to pay your solicitor (conveyancer) for carrying out the legal work related to your purchase or remortgage. The final bill for this service should also include stamp duty, land registry fees and the conveyaner’s own fee for their time.
Decision In Principle (also referred to as Agreement in Principle)
This means that your application for a mortgage (or any kind of financial service) has been agreed in principle, subject to such things as the valuation of your property or confirmation of your income (prior to full mortgage application).
Early Repayment Charges
This is the penalty you will incur from the lender incur if you wish to repay your mortgage before the end of its full term (fixed rate period). These will be set out in your Mortgage Offer.
Equity
This is the difference between the value of your property and the mortgage/lending that you have secured on it.
Exchange of Contracts
This is when the buyer’s and seller’s conveyancers check with each other that the contracts the buyer and seller have signed to agree the sale are identical and then send them to each other. Only then is the sale legally binding and neither party can pull out without facing significant costs. This is the point at which all parties have to have agreed on a moving/completion date.
Help to Buy
These are Government shemes aimed to help purchase a property. Please see All schemes – Own Your Home for available schemes.
Land Registry
If you take out a mortgage or change an existing one on a property, this needs to be registered with the Land Registry, who will make a charge for amending the records. Set up to register ownership and interests in a property.
Let to buy
Put simply this is when you remortgage your existing home onto a buy-to-let basis, often releasing additional equity from it at the same time which you can then use as a deposit on a new home, which you then buy with a residential mortgage.
Loan to Value
Put simply this is the amount of borrowing allowed to a specified property value. So a 90% LTV on a property of £100,000 would result in lending of £90,000 (other factors may affect this).
Mortgage Deed
A mortgage deed is the written legal agreement between you and your lender.
Mortgage Offer
This is the formal document issued by a lender to you when they are satisfied that all criteria has been met with regards to finances and property.
Negative Equity
This is when the current value of your property is less than the borrowing that you have on the property. Generally experienced in times of recession.
Procuration Fee
The fee that a Mortgage Lender will pay to an introducer/broker for introducing the business to them.
Product / Lenders Arrangement Fee
A lender usually charges a fixed fee for access to a particular product or for arranging your mortgage.
Remortgage
This is where you take out a new mortgage with a new lender on a property you already own and have a mortgage on. Find out more about Remortgaging here
Residential Mortgage
This is a mortgage secured on your primary residence.
Stamp Duty
This is a tax that is paid to the Government when buying property or land. Stamp duty brackets change from time to time,so for the latest information please go to https://www.gov.uk/stamp-duty-land-tax.
Standard Variable Rate
A standard variable rate (SVR) is the type of mortgage interest rate that you are most likely to go onto after finishing an introductory fixed, tracker or discounted deal. An SVR mortgage means your payments can go up or down according to changes in interest rates. The rate you pay on an SVR mortgage will be determined by your mortgage lender.
