Mortgages And More (NI) Ltd - Independent Financial Advisers

It is important to understand the jargon involved with you mortgage, whether you're a first time buyer, selling or remortgaging you home.

Below is a list of mortgage jargon definitions if you would like further clarification on any of the terms please do not hesitate to contact us.

Adjustment Date
This is the date on which the interest rate changes on a variable rate mortgage.

Arrangement Fee
A fee paid to the lender to cover the costs of the mortgage application. May or may not include valuation fee.

Adverse Credit
A term applied to a borrower or applicant with credit history problems, due to late mortgage or credit payments, bankruptcy or County Court Judgement (CCJ).

Agreement in principle
Gives the applicant an indication of the likely outcome of a loan application. It includes a credit check and assesses your ability to repay the loan requested. This is not a formal offer.

Annual Percentage Rate (APR)
Shows total cost of borrowing and allows you to compare offers from different lenders. Taking all fees, charges and monthly payments over the life of the loan into account.

Appreciation
The increase in the value of the property due to changes in the market.

Arrears
The amount in months or pound which you mortgage has fallen behind in.

Buy To Let
A mortgage specifically designed for buyers with the intention to let the property out to a third party.

Base Rate
The interest rate from which lenders set their rates, this is usually based on the Base Rate set by the Bank of England.

Cap and Collar Mortgage
Capped is a maximum rate of interest that can be charged by the lender over a specific period of time, collar is he minimum rate of interest.

Cashback Mortgage
A mortgage where a sum of money is paid by the lender to the borrower at the start of the mortgage, this can be to help cover the costs of moving home.

County Court Judgment (CCJ)
A ruling for bad debt issued by a County Court or higher court.

Completion
This is the date you become the legal owner of the property. It is the date on which you solicitor forwards the money from the lender to the solicitor of the vendor.

Conveyancing
The legal procedure carried out by the solicitor or licensed conveyancer of transferring ownership of the property.

Discounted Rate Mortgage
A lower level interest rate, usually levied for a specified period, than the standard variable rate.

Early Repayment Charge
A fee charged to the applicant in the event of the mortgage being paid in full or in part before a specified time.

Equity
Also know as capital. The amount of money either put into buying a property or the deposit placed on a property.

Fixed Rate Mortgage
A mortgage with a fixed interest rate for a specific time.

Flexible Mortgage
A mortgage that allows the borrower to make over- or under payments, or take a payment holiday.

Guarantor
A person, other than the borrower, who guarantees the mortgage repayments in the event the borrower defaults.

Higher Lending Charge (HLC)
A fee charged by lenders when the loan-to-value (LTV) ratio is above a certain level.

Income Multiplier
The formula used by lenders to calculate how much a prospective borrower can borrow.

Interest Only Mortgage
A mortgage where the borrower only pays the interest on the loan for the duration of the loan term and repays the full loan amount at the end of the term.

Joint Income
The total gross income of the two borrowers in a joint mortgage.

KFI (Key Facts Illustration)
The KFI summaries all the mortgages specifics in a clear and not confusing way.

Landlord's Reference
A previous landlords reference, confirming applicants history of payment of rent and general conduct as a tenant.

Level Term Assurance
This type of life assurance is usually used to protect interest only mortgage and provides a lump some to cover mortgage repayment in the event of death.

Loan to Value (LTV)
This refers to the amount you are borrowing as a percentage of the property value.

Mortgage
A loan made against the security of a property.

Mortgagee
The mortgage lender.

Mortgagor
The Mortgage applicant.

Negative Equity
A situation where the property is worth less than the mortgage loan secured on it.

Overpayment
Increased or additional mortgage payments made by the borrower usually with the intention to repay the mortgage early.

Payment Holiday
A period of one or more months when the borrower does not make any mortgage repayments. This is usually associated with flexible mortgages where the borrower has previously overpaid their monthly repayments.

Re-mortgaging
Using the proceeds from a new mortgage to repay the old one, using the same property as security for both.

Re-inspection Fees
A fee issued by the lender if need occurs to re-inspect the property after the original valuation.

Repayment Mortgage
A mortgage where part of the actual loan plus interest on the outstanding loan amount is repaid each month, gradually reducing the amount borrowed.

Retention
The ability of a lender to retain part of a mortgage until certain conditions are met.

Right-to-Buy mortgages
The right of a tenant in a local authority owned property to buy the property, sometimes at a discount.

Self Certification
A mortgage for applicants who cannot prove their income because perhaps are self-employed with low accounts/ sales person with low basic salary and high bonus'. Typically the lender will charge higher rates of interest, or require a larger deposit.

Self build
A mortgage for customers who are looking to build their new home themselves.

Stamp Duty Land Tax
A tax paid by the buyer when purchasing a property. This percentage is determined by the government.

Standard Variable Rate (SVR)
This is usually the rate that accounts revert to after a fixed, capped or discount product ends.

Term
The period of time between the beginning and end of the mortgage loan.

Tracker mortgage
This type of mortgage is a variable rate interest. The interest rate is directly linked to the Bank of England's Base rate. Therefore whenever the Bank of England's Base rates change the tracker mortgage interest rates are guaranteed to change.

Unencumbered
A property that has no loans or borrowings secured on it.

Valuation Fee
A fee charged to cover the cost of a valuation, typically paid by the borrower.

Your home may be repossessed if you do not keep up repayments on your mortgage. Our typical fee for mortgage advice is £299, although the precise amount will depend upon your own circumstances.
Information and/or advice intended for UK residents only. Non-UK residents please contact us for further information.

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