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Mortgages can be quite complicated for many, with difficult processes and technical words you don’t necessarily understand.
It is the aim of this “Jargon Buster”, a glossary of mortgage terminology, to provide clear and simple explanations of various words and phrases relating to mortgages, equity release, insurances and more.
This refers to borrowing additional money from a mortgage lender, often for use on things like home improvements. Doing so, will increase the overall size of your mortgage.
Adverse (bad) credit is the name given to a borrower’s credit challenges that have perhaps affected their ability to take out credit. This includes things like late payments, county court judgements (CCJ’s) or bankruptcy.
An adverse mortgage is what you would be taking out if you had adverse credit, but were also accepted for a mortgage by a specialist mortgage lender. You are likely to encounter these if you have missed payments, fallen into arrears or had any defaults/CCJ’s.
There are a lot of mortgage lenders who won’t lend to someone with bad credit, though thankfully there are still plenty who offer specialist products to people in need, so long as they meet the criteria.
It is recommended that you seek the help of a dedicated mortgage broker, if you are looking to take out a mortgage with bad credit.
An affordability assessment is an important step taken by mortgage lenders to assess whether you have the financial capability to repay your mortgage within the desired period of time.
This process involves an in-depth look at your income, expenses, and overall financial situation to ensure that you can comfortably afford to repay the mortgage.
By conducting an affordability assessment, mortgage lenders can make sure that you are not at risk of experiencing financial difficulties and defaulting on your mortgage amount.
An agreement in principle (also known as a mortgage/decision in principle) is a document that a mortgage lender can issue to you, in order to confirm the maximum amount they are willing to lend you for a mortgage.
By having this document, homebuyers are able to show the estate agents and sellers that not only can they afford to purchase that property, but that they are ready to proceed with the sale, having a mortgage lender lined up.
It’s also the first step in your mortgage application process, where the mortgage lender will take a look at your personal, income, and expenditure details, as well as perform a credit check, and decides on the maximum amount they are willing to lend you.
An agreement in principle will usually stay valid for up to 30 days, as that is about the time your credit file will update. As a mortgage broker, we are typically able to get you this within 24 hours of your initial appointment.
Learn more about AIP’s in our article “What is a mortgage in principle?“
According to the law, a mortgage lender must verify that you possess sufficient funds for the purchase and that the funds were obtained through legal means.
As a home buyer, you may be required to provide evidence of your funds during this stage.
Mortgage lenders will sometimes charge these fees to cover the administrative costs that come with a mortgage.
They often apply to loans with special fixed or discounted interest rates. These fees are typically paid separately, though they can also sometimes be added on to the mortgage amount.
Being in arrears is another way of saying that you are in debt to a creditor. In the case of your mortgage, you would be in arrears if you had missed monthly mortgage payments.
If you let your mortgage lender know ahead of time that you are going to possibly miss some payments, they are usually quite happy to work out an arrangement that helps out both sides.
When purchasing a property, the mortgage lender may conduct an audit trail to authenticate the origin of the down payment funds.
This can involve requesting a bank statement to corroborate the deposited funds and asking for additional information in order to validate the source of the deposit.
AVM stands for Automated Valuation Model. An AVM is a tool used by some mortgage lenders to figure out the value of your property, based on recent local sales and value trends.
This can remove the need for a surveyor to come out and visit the property themselves, though it doesn’t account for things like extensions or new works that have been done.
You can read more about this in our article “What is an AVM?“
When someone mentions the term base rate, they will be referring to the Bank of England base rate. This base rate is used to determine the interest rate that is charged on things like tracker and variable rate mortgages.
A (mortgage) broker serves as a middle ground between someone looking to take out a mortgage and the mortgage lender, helping the process to move efficiently and to help the customer find the best deal, from a panel of different mortgage lenders.
Learn more about mortgage brokers in our article “What does a mortgage broker do?“
This is a fee that may be charged by a mortgage broker for helping a customer through their mortgage process and for administrative services. Your fee may vary depending on your case.
A budget planner is an effective tool to manage your finances on a monthly basis.
While it’s possible to list out your expenses manually, using a spreadsheet based plan can provide an easier way to view all expenses in one place and keep on top of all your bills.
A buy to let holiday home is a type of property that is also known as a holiday let.
A holiday let mortgage is a type of mortgage loan that is tailored to the purchase of a property where the owner has the intention of renting it out on a short-term basis to tourists and visitors.
You can learn more about this in our article “Buy to Let Holiday Home Mortgages“.
A buy to let mortgage is what will be taken out by those looking to create an investment opportunity, by renting out the property to tenants. You will generally find these taken out as either interest only or repayment mortgages.
If you’re currently renting out a property, you might want to consider a buy to let remortgage, where you would switch to a new mortgage.
This could either mean changing to a different mortgage lender or choosing a new deal from your current lender, also known as a product transfer.
A cap is a maximum limit on interest rates, typically for a set period of time. For example, if your mortgage has a 3% cap, your interest rate will not go any further than that, even if rates climb to 4%.
When looking at mortgages, capital is the name given to the money or deposit used for a property purchase.
As capital is the given name to money, in the case of mortgages, this means that a capital repayment is the amount you pay to the mortgage lender per month towards your mortgage balance (excluding interest).
Your monthly repayments typically consist of both capital and interest, unless you have taken out an interest rate mortgage, where the capital is only paid once the term ends.
A capped rate is similar to a standard variable rate. Whereas with a fixed rate your interest will stay the same for the set period, a capped rate will go no higher than that number, though can still fluctuate.
Cashback is an amount of money paid by a mortgage lender to a customer, usually when their contract starts, as an incentive to take out a mortgage with them.
A commission is the fee sometimes charged by a mortgage broker for their mortgage or insurance arrangement services.
The goal of every mortgage is to reach completion! This is the date when your solicitor is set to send the funds for your purchase from your mortgage lender, to the solicitor of the person selling the property.
In doing this, you will become the legal owner of this property.
Compound interest is the interest that you earn on the capital amount, as well as any previously gathered interest.
Consent to let is an option that some residential property owners may gain permission from their mortgage lender to do, where they rent out their property for a short term. This can be done if say, you are moving out of the UK for a length of time.
Learn more about consent to let in our article “Buy to Let Mortgages Explained“
Consumer buy to let mortgages are what we call specific circumstances, wherein the borrower perhaps had no intention of borrowing for business or investment purposes, has no other buy to let properties, or is only looking to take out a remortgage on their property. These mortgages are regulated.
A contract is the legal agreement between a property buyer and seller, outlining the terms and conditions of the sale of the property.
A contractor mortgage is a type of mortgage designed specifically for contractors, where the mortgage loan is based on the contractor’s contract rate rather than their accounts.
Getting a good mortgage deal from high street mortgage lenders can be a challenge for contractors, as mortgage advisors may struggle to interpret the applicants’ limited company income and may rely on their accounts instead.
A conveyancer is a professional who specifically deals with the legal aspects of buying or selling property and land.
They can be a specialist conveyancing solicitor who is fully trained in legal services and who is a specialist in their field, a general solicitor trained in conveyancing but not to the degree of the latter, or a licensed conveyancer who is an expert in conveyancing but doesn’t have the additional legal training, which may lead them to refer you to a solicitor at a later date.
Conveyancers will typically work for a legal firm, and most mortgage lenders will insist on employing a solicitor or conveyancer in order to protect their own interests.
Conveyancing is the legal process for transferring ownership of a property from the seller to a buyer. This will usually be arranged by a licensed conveyancer or solicitor. A conveyancing fee may be charged for this service.
CCJ’s are rulings issued by a County Court or higher court, to individuals who have fallen into bad debt. The County Court Judgement against an individual is recorded and will be shown when credit checks are taken out against people.
CCJs can harm the chances of someone being able to apply for a mortgage. That said, mortgages with a CCJ may still be possible.
To learn more, please see our article “Can you get a mortgage with a CCJ?“
Credit is where the borrower receives money, with the condition set that they are to repay the other party, the mortgage lender, on a recurring basis until a set point.
A credit check is the process of checking a person’s credit history, usually as a step in the mortgage application process.
Mortgage lenders will use these to examine outstanding debts, any arrears you have, credit card repayments, and possible County Court Judgements.
The credit crunch was a period when banks stopped lending due to unsustainable lending practices.
Few people had the resources to pay off their debts, resulting in a vicious cycle where no one was borrowing, lending, or repaying their debts.
The full history of a person credit habits, including paid and unpaid debts. This is helpful to mortgage lenders, as it shows how likely a potential borrower is to be able to keep up their monthly mortgage repayments.
A company, such as Equifax and Experian, that analyses various financial records related to the payment history of a potential borrower.
At UK Moneyman, we would personally recommend using Check My File, as they pull data from each of these agencies into one simple, easier to understand report that gives you a better understanding of your overall credit score.
You get a 30 day free trial, which can be cancelled at anytime, otherwise continuing at £14.99.
A report will be issued by a credit reference agency. It will go into detail about an individual’s personal credit history. Mortgage lenders will use this to review the quality of the mortgage application.
Not to be confused with the credit score you are given by credit reference agencies, a credit score in the mortgage sense is the total number of points that are given to a mortgage application by a mortgage lender.
This will be determined by the answers given to all the questions and data received during a credit check of the prospective applicants. Mortgage lenders will each have their own criteria to determine who passes these checks.
Learn more in our article “What credit score do I need for a mortgage?“.
Additionally, learn how to improve your credit score in our article “How to Improve Your Credit Score“.
Critical Illness Cover (CIC) provides a tax-free lump sum to holders of a policy, if they are diagnosed with one of several “critical” illnesses or conditions that are specified when the policy is taken out, during their term.
These can include, but are not limited to, cancer, Parkinson’s Disease, Multiple Sclerosis, or paralysis following a heart attack or stroke.
Learn more in our article “Do I need Critical Illness Cover?“
Dashly uses cutting-edge technology to continuously search the mortgage market for better deals, regardless of how much time is left on your current mortgage agreement.
UK Moneyman works with Dashly to power The Mortgage Club, providing our customers with a way to track their mortgages at all times.
As your mortgage application progresses, your dedicated case manager will be the person who takes on the bulk of your process and acts as your point of contact for your ongoing case, working alongside and liaising with your mortgage advisor.
Deeds are the legal documents that confirm you are the owner of a property, typically held by a mortgage lender.
A deposit is basically your down payment on a property, the funds you pay upfront for your purchase. Mortgage lenders typically require at least 5% for a standard residential purchase, 25% for a buy to let mortgage and possibly 15-20%, maybe even more if your applying for a bad credit mortgage.
This deposit acts as security for a mortgage lender, as you are then not borrowing against 100% of the property value, leaving some margin for making their money back in the event of arrears and repossession.
The more deposit you are able to put down, the lower your monthly payments may be. There are various schemes that can help with your deposit. Additionally, gifted deposits, where a family member or friend gives you some of or all of the funds (as a gift, not a loan), are also popular options.
Learn more about deposits in our article “How much deposit do I need for a mortgage?“
When a borrower fails to make their monthly mortgage repayments, a mortgage lender may takes action to declare that the contract is in default.
This does not work the same way as a CCJ, wherein a court order is taken out against the borrower.
Disbursements are the fees associated with the purchase of a property, such as stamp duty land tax and land registry fees. These are paid by a solicitor on behalf of a buyer.
During the initial period of a mortgage term, the interest rate that a borrower is to pay, may be discounted by a certain percentage from the standard variable rate, for an agreed upon period of time.
In the context of mortgages, documents refer to the paperwork required during the application process.
This can include proof of income, identification documents, bank statements, and other financial records that are used to assess an applicant’s suitability for a mortgage.
Funds being “drawn-down” refers to when your solicitor has received the mortgage funds and your mortgage term has begun.
Mortgage lenders may charge a fee when a borrower actually pays their mortgage off before their agreed date or remortgages before their fixed-period is due to end, as this is technically a break in the contracted agreement.
This will typically apply to fixed or discounted rate mortgages. You should get in touch with your mortgage lender to see if any early repayment charges are present and if they are, what that charge may total to, if you are looking to pay off your mortgage early.
Our Employee Benefit Scheme provides a range of financial benefits to employees of partnering companies, including mortgage advice, access to exclusive mortgage deals, and discounts on other financial services.
This is a term that is used to describe whether or not you are in work and what type of work you are in, such as unemployed, employed, self employed, student and so on.
Your mortgage lender will need to know what your employment status is.
Self employed applicants may sometimes be seen as a higher risk to a mortgage lender, though there are still specialist mortgage lenders who can help these types of applicants.
Whilst sometimes seen as more difficult, the most challenging part for self employed mortgages, is evidencing income.
Learn more in our article “Mortgage Advice for Self Employed Applicants“.
The end date is the date on which your mortgage deal (such as a fixed-period) will be set to expire, with the interest rate no longer applicable. Unless you have selected a new mortgage deal, you will be switched on to your mortgage lenders standard variable rate (SVR), which can cost considerably more.
Please bear in mind that this is different from your mortgage term end date. Whilst your deals may end after a short time, typically between 2-5 years, your mortgage term will likely be running for longer, say 25 years (if you have agreed to that), for example.
Equity refers to a portion of funds that is sat within the property not covered by the mortgage. Your equity is calculated by subtracting the amount remaining on your mortgage balance from the value of the property.
Equity release is a way for homeowners that are over the age of 55 and have a property that is worth at least £70,000, to access cash by converting a portion of their property value, without the need to sell their home.
Learn more about equity release in our article “Pros & Cons of Equity Release“.
To understand the features and risks, ask for a personalised illustration. Equity Release may come in the form of a lifetime mortgage or home reversion plan.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.
The Equity Release Council is an organisation that represents the equity release sector and advocates for ethical and responsible practices in the provision of equity release products and advice.
Consumer protection is their top priority, and they work to establish high standards of conduct and practice within the industry.
As proud members of the Equity Release Council, we at UK Moneyman adhere to their standards to ensure essential consumer protection.
The exchange of contracts will occur at the point at which the buyer signs the contract for sale and sends it to the seller, who will also sign this.
Once the contract is signed, both parties are legally bound to finish the transfer of funds. Pulling out prior to completion may result in charges.
You may be required to pay an exit fee when you have fully repaid your mortgage.
Family income benefit is a type of life insurance policy that provides regular payments to a policyholder’s family in the event of their death.
Financial ties refer to individuals with whom you share a financial account or a joint account application, such as a mortgage or a shared account for bills with flatmates.
If you are a first time buyer, this means you have never purchased a property and become a homeowner before.
In some niche cases, if you previously were a property owner and have not been in the property market for quite some time, a mortgage lender may accept you as a first time buyer.
We often find that those applying for first time buyer mortgages will open themselves up to better deals than other borrowers may have access to.
First time buyer buy to let refers to someone who has never owned a home or rental property before and decides to invest in a rental property as their first property purchase.
It can be a strategy for first time buyers to enter the property market and generate additional income while saving for their ideal home.
Before taking this route, you first need to make sure that you have sufficient funds for a deposit and must ensure that you have enough income to cover mortgage payments in case you don’t receive rental income immediately.
To learn more, please take a look at our guide “First Time Buyer Buy to Let Mortgages Explained“.
A fixed rate mortgage is a mortgage that has an agreed interest rate for a set period of time. This is typically between 2-5 years, though can be longer.
It provides stability in monthly payments though it may also come with early repayment charges if you remortgage early.
Additionally, leaving your fixed rate either when it concludes or if you are remortgaging early, may see you on higher interest rates than you previously had, so you’ll need to be aware of this.
Purchasing a property with a fixed term contract mortgage may present some additional hurdles. It’s important not to confuse this with a fixed rate mortgage.
Applicants for these types of mortgages are individuals who have a contract that has a specific start and end date, indicating that their employment is not permanent, at the time of mortgage application.
A flexible mortgage will allow eligible borrowers to vary their monthly repayments, perhaps even take a payment holiday, and make overpayments, which can help them to reduce the interest that is payable.
That being said, however, flexible mortgages also tend to charge a higher interest rate, to allow for said flexibility.
The Forces Help to Buy Scheme (FHTB) enables service personnel to borrow up to 50% of their salary, up to a maximum of £25,000, interest-free, towards the purchase of a new home.
The aim behind this was to address the low rate of home ownership within the armed forces and support the Defence Accommodation Strategy.
Learn more about FHTB in our article “Forces Help to Buy Explained“.
Owning a freehold means that you own the property and the land that it is on.
When the housing market is seemingly doing quite well, it’s unfortunately far too common for buyers to find themselves being “gazumped”.
The word itself derived from the Yiddish word for “cheat”, to be gazumped, is to have the seller accept a higher offer from another buyer, after having already accepted your offer, but before the exchange of contracts can take place.
Similar to being gazumped, gazundering is a nightmare situation for a property seller.
This happens when at the last minute, before the exchange of contracts, the buyer pulls out or tries to negotiate for a cheaper price.
A gifted deposit is a gift of money to an applicant, that can be used to cover some or all the mortgage deposit.
Typically, these gifts are offered by close friends or family members, to help out first time buyers.
For instance, if a family member gifts you enough money to increase your deposit from 5% to 10%, this could potentially enable you to access a better deal.
Pre-tax or pre-deductions.
Leaseholders, generally speaking, are required to pay a fee to the freeholder (person who owns the land), typically on an annual or six-monthly basis.
When a borrower is no longer able to keep up with their mortgage repayments, if a guarantor is attached to the contract, they will be responsible for repaying the mortgage.
Guarantors are usually close family members or parents, who are also homeowners.
A hard credit check may occur when you submit a complete credit application or apply for certain services, such as for a mortgage.
This type of check involves a thorough review of your credit report and may impact your credit score.
Companies are required to obtain your consent before conducting a hard credit check.
Learn more about the different types of credit searches in our article “What is a mortgage in principle?“
A home buyer’s report is a form of property survey, or a report halfway between the stage of a mortgage valuation and full survey.
The intention with this type of property survey, is to clarify to the buyer whether or not the property is in a good condition.
Learn more about a Home Buyer Report in our article “What are the Different Types of Property Survey?“
Home insurance is a type of insurance that helps to protect homeowners from financial loss, due to any possible damages or losses to both property and belongings.
It also serves to protect from liability for any injuries or damage caused to others while on the property.
The Help to Buy Scheme is a government scheme that is designed with the purpose of helping first time buyers across the UK to find their place on the property ladder. The Help to Buy Equity Loan was available until 2023 but is no longer accessible.
Learn more in our article “What are the different Help to Buy mortgage schemes?“
The register holds information about the property in question, such as the property address, the date the current owner was registered as the owner, whether the property is on freehold or leasehold, and other details in regard to the property title.
The Land Registry is a government department that keeps a hold of records of property titles that have been registered in both England and Wales.
An HMO (House in Multiple Occupation) refers to a property rented out to at least three non-related individuals who share communal areas such as the bathroom and kitchen.
When borrowing against an HMO, a specialist HMO mortgage designed for this specific type of property will be required.
Typical HMOs include properties with more than three tenants (each on a separate contract), bedsits, shared or student housing, hostels, privately run halls of residence, and employee housing.
The HOLD program offers individuals with long-term disabilities the opportunity to purchase a home on the open market using Shared Ownership terms when they cannot find a suitable home in another Shared Ownership scheme.
Like Shared Ownership, HOLD allows you to purchase an initial share of the home (typically between 10% and 75% of its market value) and pay rent to the housing provider for the remaining share.
In the future, you can purchase additional shares in your home through a process called “staircasing,” as you are able to afford it.
The more shares you purchase, the less rent you’ll have to pay, as the amount of rent will be based on the housing provider’s share.
A holiday let mortgage is designed for mortgage applicants who want to secure financing to purchase a property that will be rented out to tourists on a short-term basis, as a business.
This differs from a holiday home mortgage, where you borrow money to purchase a second home exclusively for your use.
A home reversion scheme is typically available to homeowners aged 65 or over, and the amount of money you receive will depend on various factors, such as your age, health, and the value of your home.
It’s important to note that home reversion schemes are not suitable for everyone and may not be the best option for those who want to leave their property as an inheritance to their loved ones.
It’s crucial to seek professional financial advice prior to making any decisions regarding a home reversion scheme.
To understand the features and risks, ask for a personalised illustration. Equity Release may come in the form of a lifetime mortgage or home reversion plan.
A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.
A homebuyer report is a survey suitable for standard properties in reasonable condition, which can help identify any structural issues such as damp or subsidence, as well as any undisclosed problems inside and outside the property.
To learn more about a homebuyer report, take a look at our article “What Are The Different Types of Property Survey?“
A hybrid mortgage is a home loan with a fixed interest rate for a set period, followed by an adjustable rate for the remaining term.
When you’re applying for a mortgage, the mortgage lender will estimate what your monthly payments will be under the loan agreement you’re considering.
They’ll also let you know about any costs involved in setting up the loan. This estimate is also sometimes called a mortgage quote.
Learn more in our article “What is a mortgage illustration?“
Mortgage lenders may request proof of income from an applicant’s employer or accountant (in the case of self employment) during the mortgage application process.
This helps the mortgage lender to assess the applicant’s ability to make their mortgage payments on time.
Income protection insurance is a type of policy that pays out a regular income to replace lost earnings if the policyholder is unable to work due to illness or injury.
An interest only mortgage is a type of loan that requires the borrower to use the funds from an Individual Savings Account (ISA) to pay off the remaining balance.
ISAs can invest in different types of assets, such as stocks, government bonds, and cash.
The initial period of a mortgage refers to the length of time during which your mortgage deal will be in effect before switching to a reversionary rate, which is usually the Standard Variable Rate (SVR).
Interest refers to the fee that lenders charge for loaning money.
The amount of interest charged is determined by different factors, including the duration of the loan and the perceived creditworthiness of the borrower.
In the context of deposit accounts, interest can also indicate the return on a capital sum that has been invested.
An interest only mortgage is a type of mortgage where the borrower is only required to pay the interest on a monthly basis, without reducing the capital amount borrowed.
That being said, the borrower has the responsibility of ensuring that they will have enough funds at the end of the mortgage term to repay the entire loan amount, which is typically done through a savings plan.
Learn more about this in our article “Interest Only Mortgages Explained“.
A ‘middleman’, different from a ‘moneyman’ or ‘broker’, that takes a look through the market, in order to find the most suitable mortgage for a borrower.
Insurance is a financial product that provides protection against potential financial losses or damages.
As a company, we offer our customers options such as life insurance, critical illness cover (CIC), family income benefit & income protection insurance. We are also able to help with home insurance and menu plans.
An IVA is a debt management agreement with creditors, allowing the debtor to pay off some of or all their debts.
Payments are made regularly to an insolvency practitioner who distributes funds among creditors, providing the debtor more control over their assets than bankruptcy.
A joint tenancy is a type of property ownership arrangement that typically includes two parties. When one of the owners dies, their share of the ownership will be transferred automatically to the remaining owner.
A joint mortgage refers to when two individuals purchase a property and take out a mortgage together, in a joint name.
This can apply to couples, as well as two family members or two friends.
You can learn more about this in our article “Buying a Property with a Friend or Partner?“
Land banking involves acquiring land for investment purposes without immediate plans for development, holding onto it for a future sale or specific purpose.
The Land Registry will charge you a fee for registering yourself as the owner for a specific plot of land.
A landlord is the owner of a residential or commercial property rented or leased to tenants.
Leasehold ownership is a form of home ownership wherein the buyer will purchase a property, but only for a specific amount of years.
Meanwhile the actual land that the property is on, will remain under the ownership of the freeholder.
When the leasehold period ends, the freeholder will regain full ownership of the property, although you can often look to extend the lease.
A letting agent is a middleman for the landlord, who can help them to find a suitable property to purchase, as well as help them find tenants for properties they already own and help them to manage the rental process.
A conveyancer is someone who specialises in handling the transfer of legal ownership on a property. They can typically be used as an alternative to a solicitor.
Life assurance policies provide a lump sum or a series of payments to the dependents of a person, when they die during the term. These types of policies usually last for a life term.
Life insurance will provide a level of financial support to next of kin, after a policyholder dies during the term.
There are a variety of different life insurance policies, the majority of which will pay out with a lump sum in order to help cover financial worries, such as mortgage payments, childcare costs and other standard bills.
A Lifetime ISA is an individual savings account with a 25% government bonus for first buyers or retirement savers.
Lifetime mortgages will typically be found in one of two forms, a lump sum lifetime mortgage and a drawdown lifetime mortgage.
Lump sum lifetime mortgages allow the borrow to release their equity in a lump sum payment, whilst a drawdown lifetime mortgage will let you release a smaller amount, with the option to draw down more when you need it.
The qualifying criteria for each of these types of lifetime mortgage are the same.
To learn more about this topic, read our article “What is a lifetime mortgage?“
To understand the features and risks, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
A listed building is a type of property that has significance either historically or architecturally. This type of status is officially given by the government.
If you own a listed building, you must enquire for official consent, before making any changes to the building. This is because the historical and/or architectural significance must be preserved.
A local authority search is a type of search that will be conducted by the property buyer’s solicitor, in order to check and see if there are any proposed developments or planning permissions near the property that could have an impact on it’s value or how desirable it is.
This search also checks if there have been any enforcement notices served on the property.
Loan to value (LTV) is a term that is used as a way to describe the amount of money a mortgage lender may possibly lend you, based on a percentage of how much the property is worth.
For example, if you have a property that is valued at £200,000 and you put down a 10% deposit, creating an LTV of 90%, you could borrow up to £180,000 (90% of £200,000).
The maximum LTV will depend on the product, the mortgage lender, your personal history and the amount of deposit you have.
A lump sum payment is a one-time payment that you may be able to make, in order to reduce your outstanding mortgage balance.
A menu plan for insurance refers to a customisable selection of coverage options and limits that allow individuals to choose the insurance policies that best fit their needs and budget.
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A mortgage is a type of loan that you have secured against a property you are purchasing.
The mortgage lender will hold the property in question as collateral, until the borrower has completed all of their loan repayments over the course of their term.
What this means, is that if you fail to keep up any mortgage repayments and fall into arrears, the mortgage lender may well have the option to repossess your property and sell it, to make back what they have lost financially.
Mortgage advice is the process of receiving advice on your mortgage options during the process of buying a home.
A mortgage advisor is an individual with authorisation to provide mortgage advice on regulated mortgage contracts.
A mortgage application is a document submitted to a mortgage lender with details about the property, borrower’s finances, and employment history.
A mortgage approval or offer confirms that a mortgage application has been approved and is valid for three to six months after completion.
This refers to the amount that is remaining on the initial mortgage loan you took out.
A mortgage broker acts as a middle ground, that connects the borrower and the mortgage lender during the mortgage application process.
Mortgage calculators are used to create an estimate of monthly repayments for potential mortgage applicants.
Utilise our mortgage calculators on the links below:
Sometimes also called a ‘redemption fee,’ this is a fixed amount that will only be payable when you are given your mortgage loan.
The mortgage lender is the organisation that will be providing you with the funds to purchase a property, which is typically either a building society or bank.
The Mortgage Market Review (MMR) of 2014 is a regulatory reform that was created with the aim of preventing a repeat of the 2008 financial crisis that occurred throughout the UK mortgage market.
It introduced stricter affordability checks for borrowers, with mortgage lenders also required to verify a borrower’s income, expenditure, and debt levels before they go ahead and approve a mortgage.
Mortgage lenders also have to make sure that borrowers have the ability to afford the mortgage repayments not just at the current interest rate, but also at any potentially higher rate increases too.
The MMR also caps the amount that mortgage lenders can lend based on a borrower’s income, with mortgage lenders and mortgage brokers alike, also being required to provide clear explanations of the risks and costs that come with their mortgage products.
Overall, the MMR was created with the intention of improving the quality and sustainability of mortgage lending in the UK, and to protect both borrowers and mortgage lenders from the potential risks involved with excessive borrowing and lending.
Mortgages for over 50s are designed for those who are aged 50 and above, often with more flexible terms and longer repayment periods.
They can be helpful for those looking to remortgage, purchase a property or release equity for retirement planning.
Popular over 50s mortgage options include retirement interest only mortgages, term interest only mortgages, equity release and standard mortgages or remortgages.
A mortgage with a CCJ refers to a mortgage application made by a borrower who has had a County Court Judgement (CCJ) against them.
Such borrowers may have a more difficult time obtaining a mortgage, but there are specialist mortgage lenders who may be willing to offer mortgages to those with CCJs on their record.
A monthly payment (or mortgage repayment) is what you will be paying a mortgage lender each month, in order to reduce your overall mortgage balance and eventually, if this is the goal, pay off your mortgage completely.
If you are unable to maintain any monthly payments for some reason, we would recommend that you pre-empt that situation and speak to your mortgage lender first, as they will likely want to work with you to make sure both parties are happy.
Mortgage Payment Protection Insurance (MPPI), also known as Accident, Sickness, and Unemployment Insurance (ASU), will be paid as a percentage of a borrower’s mortgage payments if they are suddenly unable to work due to illness, accident, or enforced redundancy.
Sometimes when you’ve owned your home for a while, you may look to almost level up into a new home.
Whilst a remortgage for home improvements can be popular for an existing homeowner, some will instead look at moving home to a newer, more suitable property.
Mortgages for home movers typically work the same as any other purchase, with the added caveat of having to sell your current home.
The home moving process can be stressful, something our team of mortgage advisors are always happy to reduce the added mortgage pressure from.
Negative equity occurs when the outstanding balance of a borrower’s mortgage exceeds the current market value of the property, which can pose a significant problem if the homeowner intends to sell their property.
A new build property is a residential property that has recently been built and never had an owner.
These properties are typically built by property developers on newly developed land or in redeveloped areas, ranging from individual homes to larger apartment complexes.
New build properties will typically come with modern features and energy-efficient technology. You may also find that you are offered this with various incentives such as developer discounts or government schemes that will encourage homeownership.
One of the government schemes that works with new build properties, is the Shared Ownership Scheme, where you purchase a share of the property, instead of the full price.
You can learn more about this in our article “What is a shared ownership mortgage?“
Essentially, the No Negative Equity Guarantee assures that you or your estate will never be responsible for more than the value of the property when it is sold.
As a member of the Equity Release Council, we can provide our customers with this guarantee.
An offer is the amount of money that a home buyer puts forward in a proposition of what they would like to pay the seller, in order to become the owner of a property.
An offset mortgage will see a standard mortgage combined with a linked savings account.
The balance of the savings account is deducted from the outstanding mortgage balance before calculating the interest charged, which in turn will hopefully reduce mortgage costs for a home buyer, each month.
Offset mortgages are often very flexible and tax-efficient options, but are also quite complex, so it is recommended to seek mortgage advice from a mortgage broker.
You can learn more about this topic in our article “What is an Offset mortgage?“
The open market value is the estimated worth of a property, that a buyer could realistically sell for, to a willing buyer who is interested in making a purchase.
Overpayments can often be made to those who have flexible mortgages. It allows borrowers to make additional payments without paying any type of penalty, resulting in significant interest savings over course of the mortgage term.
You can learn more in our article “Should I overpay my mortgage?”
Payment holidays are periods of time, where flexible mortgage borrowers may have the option to make no payments, usually for up to six months.
You will need to ask your mortgage lender about this prior to stopping your payments. Failure to do so, may cause problems.
There may be some prerequisites, such as first making overpayments, to give an example.
A portable mortgage is a flexible mortgage that can be transferred between properties when a borrower looks to sell their property and move home, moving to a home of similar value.
If the property you are moving to costs more than the property you were in, you may be able to use the equity that was within your home to make up the difference. Alternatively, you may be required to borrow more.
Learn more in our article “Can I port my mortgage?“
A property portfolio is a collection of properties that are owned for investment purposes, typically by an individual, group, or company.
The aim is to increase wealth and generate a source of income.
When looking at the world of insurance, a premium is the regular amount you pay to keep your cover running.
The product fee is a fee that may be charged by a mortgage lender on some mortgage deals. You may have the option of adding these into your overall mortgage loan.
When buying a property, you may find yourself in what is called a ‘property chain’.
This could include, for example, you (the buyer), the seller, their buyer, and so on, with each party waiting on the party in front of them to complete.
Being a first time buyer will significantly reduce the property chain, as nobody is waiting on you to complete.
A purchaser is the person who is looking to buy a property.
Redemption is the name given to the repayment of a mortgage when either you remortgage, are moving home (and taking out a new mortgage) or once your mortgage term has ended.
Our Refer a Friend Scheme offers a great opportunity for customers to earn £25 by referring their friends and family members for mortgage advice.
All you need to do is provide your contact information and their contact information, and if they successfully complete a mortgage application with UK Moneyman, you’ll receive your reward.
It’s a win-win situation for everyone involved!
Remortgaging is the process of paying off a mortgage that you already have, with funds that you receive from a new mortgage.
This will see you use the same property as collateral. We typically see customers either taking out a remortgage for a better rate or a remortgage for home improvements.
You can learn more about remortgages in our article “What is a Remortgage? Remortgage Tips for The End of Your Term“
A remortgage for home improvements involves a remortgage to release equity to pay for renovations or upgrades to your property.
This can be a cost-effective way to fund improvements while also potentially increasing the value of your home.
A remortgage for debt consolidation involves taking out a new mortgage to pay off existing debts, such as credit cards or loans.
This can result in lower monthly payments and potentially lower interest rates, but it may also extend the overall repayment term and increase the total amount repaid.
A remortgage with bad credit involves replacing your existing mortgage with a new one from a different mortgage lender, but with the added challenge of having a history of missed payments, defaults or CCJs.
It can be more difficult to find a mortgage lender willing to approve a remortgage with bad credit, and the interest rates may be a lot higher.
A rental void refers to a period during which a rental property remains unoccupied, resulting in no rental income for the landlord.
Avoiding void periods should be a priority for anyone renting out property.
Repayment mortgages, also referred to as capital repayment mortgages, will require the borrower to repay both a combination of the interest and capital per month.
This type of mortgage is quite commonly used by home buyers who want to guarantee they own the property once the term has finished.
A repayment vehicle, is a means in which you pay back the capital of a mortgage loan. Examples of repayment vehicles can include endowment policies, ISAs, as well as personal pensions.
Repossession occurs when a borrower no longer has the ability to make mortgage repayments and has fallen into arrears, resulting in the property being legally repossessed by the mortgage lender they took their loan out with.
The mortgage lender in turn, may sell it at a public auction to make back any losses they had from any outstanding debt.
To avoid this, if you feel like you are going to miss any mortgage payments, please do consult with your mortgage lender first and work alongside them to come to an agreeable solution.
Repossession is always the last thing a mortgage lender wants.
A residential mortgage is a large, long-term loan that an individual or group takes out to buy a home for personal use.
Whether you are a first time buyer, moving to a new home, or remortgaging, a residential mortgage is required if you plan to live in the property.
Retirement Interest Only (RIO) mortgages are designed for older borrowers who may struggle to obtain traditional mortgages due to their age or income.
With a RIO mortgage, the borrower pays only the interest on the loan, and the capital balance is repaid when the property is sold, or the borrower passes away or moves into long-term care.
The Right to Buy discount allows certain tenants to purchase their home at a discounted price below market value.
The discount amount is based on the length of time the tenant has been a public sector tenant, with different discounts for houses and flats.
The Right to Buy Scheme presents a home buying opportunity to eligible council and housing association tenants, giving them the chance to purchase the home that they are living in already, with a discounted purchase price.
There is set criteria to meet, so you would be best either speaking to a mortgage advisor or getting in touch with the local authority to review any restrictions and check your eligibility.
You can learn more in our article “Right to Buy Mortgages Explained“.
Before a mortgage lender will offer you a mortgage, they will need to conduct searches on the property, as a part of the conveyancing process.
This will include consulting with local authorities and other organisations to see if there are any planning proposals that could possibly have a negative effect on the future value of the property.
When you take out a mortgage, your loan amount will be secured on the property, your largest asset.
This acts as a safety net for the mortgage lender, as if you default on your mortgage, the lender can ultimately look to repossess your property, sell it on and make back what they lost.
A second charge mortgage is a form of secured loan.
Self employed mortgages are designed for individuals who work for themselves and have variable incomes.
These mortgages typically require more documentation to prove income and may have higher interest rates or a require larger deposit than a traditional mortgage.
Shared Ownership allows eligible home buyers the opportunity to purchase between 25% and 75% shares of a property, with the amount of purchase price that remains being covered in rent.
These schemes can be a great way to help first time buyers get onto the property ladder, though it’s important to note that not every mortgage lender will offer a mortgage on these, which is why it’s important to see a mortgage broker.
You should also make sure that you speak with a Shared Ownership Scheme provider to fully understand what is involved with taking out this scheme, as well as what options are available in the future.
To learn more, please read our article “What is a shared ownership mortgage?“
A sitting tenant refers to a tenant who is already occupying a property, particularly when ownership changes hands.
This can arise from a decision not to evict an assured shorthold tenant after a change of ownership or from a protected tenancy.
A soft credit check is a type of background check that a mortgage lender can run against you, to see if you are worthy of their lending. Soft credit checks can be taken out without permission.
Unlike its counterpart, the hard credit check, a soft credit search will typically not affect your credit score or any other mortgage applications you look to make going forward.
Learn more in our article “What is a mortgage in principle?“
SOLLA stands for the Society of Later Life Advisers, and being SOLLA accredited means that a financial advisor has met the high standards set by the organisation in providing specialist advice to clients over 55 years of age.
SOLLA accredited advisors have demonstrated expertise in areas such as retirement planning, equity release, care funding, and estate planning.
Much like a conveyancer, a solicitor will take control of the legal aspects of purchasing a property.
This will include contracts, property searches, the transferring of funds, and providing any additional legal advice.
Solicitors are an important part of the mortgage process and can be used for both your first purchase and your remortgage.
Learn more in our article “Do I need a solicitor to remortgage?“
Before you look to make an offer on a property, you should always look to make sure you are aware of how much stamp duty land tax needs to be paid on your property purchase.
To learn more about the different tax bands and what you could be paying, we would recommend speaking to a tax advisor or taking a look at the government website.
A standard variable rate is a form of interest rate on a mortgage that will typically sit at a percentage above the Bank of England base rate and move alongside it.
Whilst it may sound similar to a tracker mortgage, SVR’s are not at a specific percentage and instead are altered at any time, at the discretion of the mortgage lender.
Specialist property surveys are inspections carried out by surveyors who have expertise in specific areas of concern, such as damp, timber, drain and electrical reports, just to name a few.
These surveys provide more detailed information on the property’s condition and any potential issues that may not be detected in a standard homebuyer report.
Learn more about specialist property surveys in our article “What Are The Different Types of Property Survey?“
More commonly referred to as a Building Survey, a structural survey will see both the inside and the outside of the property looked at in-depth, with a view to find any potentially hidden or not necessarily obvious faults.
Building Surveys are typically undertaken by a chartered surveyor, with an extensive report being given at the end, to outline any defects.
You will normally find that this sort of survey is performed on older properties, as well as poorly maintained properties or properties that perhaps have any structural concerns.
Learn more about this and other surveys that could be available, in our article “What are the different types of property survey?“
A mortgage may be divided into sub-payments, with each sub account having its own repayment method, interest rate, and term.
The total monthly payment includes all sub account payments.
The term switching, refers to product transfers. This is where you move onto a new mortgage deal with the same mortgage lender.
This typically comes along when our current fixed rate or tracker period is set to end. Neglecting to do so, will see you move onto your mortgage lenders standard variable rate.
You can learn more in our article “Can I remortgage with the same lender? Product Transfer Advice“.
Tenancy in Common (TIC) is a legal arrangement where two or more parties share ownership rights to a property.
Your mortgage term is a specific period of time, measured in years, in which your mortgage will be repaid.
Typically, customers have a standard mortgage term of 25 years, though some may choose 30-40 year terms. Longer terms are becoming increasingly common.
A term interest only mortgage is a type of mortgage where the borrower only pays the interest on the loan amount each month and does not make any repayments towards the principal.
At the end of the term, the borrower is expected to pay off the entire loan amount in a lump sum, typically through savings or the sale of the property.
The Mortgage Club is a service offered by UK Moneyman that provides access to exclusive mortgage deals and rates from a range of mortgage lenders.
The tie-in period is the period of time in which you will be unable to leave your agreed mortgage term, unless you pay the early repayment charge.
Title deeds are very important documents that confirm the ownership of both the freehold and leasehold of a property.
Tracker mortgages are a type of mortgage, wherein the interest rate follows alongside the Bank of England base rate, normally sitting at a percentage above it.
As the Bank of England base rate fluctuates, you will see your mortgage payments fluctuating also.
After you have signed a transfer deed, ownership of the property will be transferred from the seller of a property, to the buyer of the property.
A transfer of equity can happen either when someone is added to or removed from the title deeds of their property. This may happen with divorce & separation, as well as bereavement.
UK Moneyman is a mortgage broker based in the UK, that offers its customers a free mortgage appointment.
They have access to a large panel of mortgage lenders, including many specialist ones, allowing them to help clients find the best mortgage deals for their needs and financial circumstances.
When a property is “under offer”, it is a circumstance when a seller has accepted a home buyers offer, prior to the exchange of contracts happening.
An underpayment is a mortgage repayment that is less than what is contractually agreed.
You might find that some flexible mortgages have this option, though it is always important to check with your mortgage lender first, to avoid being penalised.
When a property is unencumbered, this means you own the home outright and do not have a mortgage on the property anymore, having fully paid that off.
A valuation is a type of property survey that a mortgage lender will take out, in order to confirm the value of a property, prior to lending on it.
In some cases, you may be charged a valuation fee.
A vendor is the name given to the person who sells a property to the home buyer.
For investors who are looking at the buy to let market, rental yield is the income that you generate from renting out a property, which will be calculated as a percentage of the value.
You can learn more about Buy to Let Mortgages in our article “Buy to Let Mortgages Explained“.
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Registered Address: 10 Consort Court, Hull, HU9 1PU.
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UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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