A mortgage loan.
APR
Stands for Annual Percentage Rate, which helps you compare the cost of different mortgage deals. It takes into account the amount of interest you’ll pay, the length of the term of the mortgage and other charges such as any application fee.
Application fee
Lenders sometimes charge a fee to secure certain mortgage rates.
Barclays Bank Base Rate
Interest on tracker rate mortgages is charged at a set margin above or below or equal to the Bank of England Base Rate. Interest rate changes on existing tracker rate mortgages take effect from the first of the month following a change to the Bank of England Base Rate. All references to the Barclays Bank Base Rate in your Offer document (where the reference is to 'Barclays Bank PLC’s Base Rate') and Key Facts Illustration document (where the reference is to 'our Base Rate') should be taken to be references to the Bank of England Base Rate.
Bank of England Base Rate
This is also known as the Bank of England's repo rate. This rate can go up or down from time to time and is announced by the Bank of England's Monetary Policy Committee every month.
Completion
The conclusion of the purchase of the new property.
Conveyancer
A legal expert handling all documentation for the sale and/or purchase of a property. This will be a solicitor or licensed conveyancer.
Coveyancing
The legal process involved in buying and selling a property.
Credit scoring
A technique used by lenders to assess the suitability of your application.
Daily interest
With this method of calculating mortgage interest, interest is charged on the amount of mortgage outstanding every day. This means lenders take into account any changes in the amount you owe on a day-to-day basis.
Disbursements
All the various costs itemised on your conveyancer’s invoice for carrying out your homebuying legal work.
Discharge fee
You have to pay this to some lenders for releasing their hold over a property once you've paid off your loan.
Early repayment charge
A fee applicable if you pay off all or some of your mortgage, or change mortgages, during a specified period.
Equity
The difference between the amount you owe on your mortgage and the current value of your property.
Exchange of contracts
The swapping of contracts between a buyer's conveyancer and a seller's conveyancer. Once you've exchanged contracts, both parties are legally bound to the transaction. The Scottish equivalent is called Conclusion of Missives.
Final repayment charge
Sometimes called an exit fee, this charge is applied when the mortgage is repaid in full.
Financial Services Authority (FSA)
An independent body that regulates the financial industry in the UK. One of their aims is to help consumers become better informed about financial matters.
Freehold
A form of legal title – usually on a house – which means you are the absolute owner of the property and the land it's on.
Higher lending charge
Fee or premium sometimes charged by lenders if your mortgage represents a high percentage of the property’s value.
Key facts about our services
This document will be issued to you when you first make contact with the lender and contains information such as the regulated status of the lender, the level of service provided to you and reference to the Financial Services Compensation Scheme.
Key facts illustration
A key facts illustration details things such as the amount of borrowing required, the selected mortgage product, any fees and charges and information about any additional features of the product. All lenders are required to set out the details in a key facts illustration in the same format so it’s easier for you to compare products.
Land registry fee
Your conveyancer pays this on your behalf to register your details in the Land Registry records as part of the buying and selling process.
Leasehold
This means you own a property for a set number of years. When the lease expires, the property returns to the freeholder. Flats are commonly sold as leasehold.
Local authority search
Part of the conveyancing process when you buy a property, carried out by your conveyancer. It gives details of any matters that affect the property, as it reveals any proposed changes to the local area, such as road improvements, and details of any planning permission given for the property.
LTV
This means loan-to-value and is the proportion of the value or price of the property (whichever is the lower) that you borrow on a mortgage. For example, a £171,000 mortgage on a house valued at £180,000 would mean an LTV of 95%.
Mortgage
A mortgage is a loan that you use to buy a property. Your property will become the security for your loan, which means that if you cannot afford your mortgage repayments your home may be repossessed by us.
Mortgage deed
A legal document establishing a mortgage on a property. This is called a Standard Security in Scotland.
Mortgage term
The length of time over which you agree to pay back your mortgage, generally up to a maximum of 35 years.
Negative equity
This is when the amount you owe on your mortgage is greater than the value of your property. It particularly becomes a problem if you want to move house.
Portability
You may decide you want to move house further down the line. This means you have the ability to take your mortgage with you if you move to a new home.
Premium
Amount you pay on a regular basis for a service, such as an insurance policy.
Remortgaging
When you arrange a new mortgage with a different lender and use the new mortgage to pay off the old one.
Retention
Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.
Stamp Duty Land Tax
Government tax you have to pay based on the purchase price of a property worth more than £125,000.
Structural engineer's report
A specialist report from a structural engineer on the condition of a property.
Survey A report on the structural condition of the property you are planning to buy. Typically there are two levels of survey: a homebuyer’s survey and valuation, best suited to smaller or relatively modern properties, or a building survey which will provide a greater level of detail and is more suited to older or more complex properties. Valuation An assessment of the value of the property you are hoping to buy, normally requested by your lender to ensure that the property is suitable security for the loan. | Link to previous articles: Barclays Woolwich Mortgage Reserve Barclays Woolwich Mortgages: Buy to Let Mortgage Barclays Woolwich Mortgages: Buying your first home Alliance Leicester :Guide to remortgaging Alliance Leicester guide to moving home Alliance Leicester Guide: Buying your first home |
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