APR (Annual Percentage Rate)
The Annual Percentage Rate of a loan that you will pay interest on. This is quoted alongside promotional rates to give you a feel for the average cost per year. This allows you to compare the actual cost of different loans.
Arrangement Fee
Lenders may charge an arrangement fee for setting up your mortgage account. This is usually payable up front, but in some situations the lender may allow this fee to be added to the loan.
Buildings Insurance
This covers your home against damage or loss as a result of fire, flood and other accidental damage. It doesn't include loss or damage caused to your possessions, which requires separate Contents Insurance.
Booking Fee
Lenders charge this fee for securing mortgage funds, usually special deals such as fixed or capped rates. It's usually payable up front although the lender may allow it to be added to the loan.
Capped Rate
This is a mortgage interest rate with an upper limit or 'cap' set from the outset of the mortgage for a definite term. For example, a cap might be set at 6% for two years. Therefore that is the maximum rate you will pay for those two years, even if standard interest rates rise higher than 6%.
Completion
The finalising of the sale when all the monies are passed over and the purchaser has legal right to the property.
Contents Insurance
A specialised insurance policy that covers the possessions within your home such as furniture, clothes etc. as opposed to the actual building which should be covered by separate Buildings Insurance policy.
Freehold
If you own a freehold property, you are the outright owner of the property and associated land.
Conveyancing
The legal and administrative requirements usually undertaken by a solicitor when in buying a home.
Credit History
A full credit search will be carried out before an offer is made, checking the personal financial history of each applicant.
Discounted Rate
An arrangement that gives you a set reduction, or 'discount' off standard variable rates for a specified period of time.
Early Repayment
If you repay the whole of the loan you will be charged an administration fee to cover reasonable administrative costs in retrieving and checking your deeds and other documents, discharging the mortgage, secure postage, etc. This amount is variable. If you repay the whole or part of the loan you may also have to pay a Early Repayment Charge(s). This charge covers the loss that the lender might otherwise suffer, balancing the interest and charges you pay against funding and other costs in making the loan to you. If a loan is offered to you, the Offer of Loan will state how your early repayment charge(s) is calculated and the period over which it will apply.
Fees applied in addition to any interest charges at the time the mortgage is redeemed are charged to cover reasonable administration costs. These include retrieving and checking the Deeds and Documents, formal sealing, recording of documents sealed and secure postage.
Endowment
A life insurance and investment policy which pays out a lump sum should you die or at the end of a specific term. This is often used to pay off a mortgage, depending on how the policy has performed. We cannot give advice on these types of investment.
Equity
Equity is how much of the property you own outright, i.e. how much would be left after selling the property and paying off the mortgage.
Exchange
When you hand over your deposit to the seller and agree a date for completion.
Fixed Rate
An arrangement which fixes your mortgage rate at a set rate for a specified period of time.
Flexible Mortgage
Allows you to change your mortgage as your circumstances change. If you're feeling flush, you can pay extra to save thousands of pounds in interest and reduce your mortgage term.
Leasehold
If you are a leaseholder, you own the rights to live in a property for a specific period, but someone else owns the land it is built on (you'll usually pay a nominal annual rent to the owner of the land).
LTV
This means Loan To Value. It's the size of a loan described as a percentage of the purchase price. However, please note that if the valuation of the property is lower than the price you have agreed, the LTV will be based on the valuation price.
No Extended Tie In
This means that at the end of your fixed, capped or discounted rate period, you will not have to pay an early redemption charge(s) if you pay off your mortgage early.
Personal Pension Plans
Personal pensions are a way of making your own pension provision if you are not a member of an employer's scheme. The return from a personal pension or part of it can be used to pay off the capital sum of a mortgage at the end of the mortgage term usually 25 years or, sometimes, earlier. Personal pensions have the benefit of being tax efficient but to find out if they are suitable for your circumstances, we can discuss this option with you, but are unable to give you advice on this..
Portability
Some interest rates have portability options. This means that if you move home during the discounted or fixed rate period, you can enjoy the same rate, on the amount outstanding on your original loan, for the remainder of the discounted or fixed rate period. Conditions apply - please contact us or email us.
Early Redemption Charges(s)
If you decide to pay off (redeem) your mortgage earlier than your agreed mortgage term, you may be liable for an early redemption charge(s), particularly whilst in a special interest rate period.
Re-Mortgage
When you move your mortgage to another mortgage lender without moving home.
Self-Certification Mortgage
This type of mortgage is aimed at applicants who have difficulty in obtaining proof of income or who have a variable income. Eg:
- you have just left employment to start up on your own
- you are employed on a short term contract
- you have an irregular income
- you are company director
For self-certification mortgages, the overall cost for comparison is 7.56%APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
Stamp Duty
Stamp duty is the tax that you pay when you buy property. Based on the prurchase prices below, the following stamp duty is payable
| £0 - £125,000 | 0% | |
| £125,001 - £250,000 | 1% | |
| £250,001 - £500,000 | 3% | |
| £500,001 or more | 4% |