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APR
APR stands for Annual Percentage Rate. This rate is useful if you want to compare the cost of different mortgages as it takes into account not only the amount of interest payable but also any charges and the term of the mortgage. Arrangement Fee
Most lenders will charge a fee for arranging a mortgage - sometimes this is called an application fee although it may also be referred to as an establishment fee. Depending on the lender fees may be payable either when a mortgage application is submitted or when the mortgage completes. Bank of England Base Rate
This is the interest rate set by the Bank of England’s Monetary Policy Committee. Completion
The day on which you obtain legal ownership of a property you are buying. Conveyancer
Often a solicitor but sometimes a licensed conveyancer, this is the person who handles all the legal documentation relating to the purchase and / or sale of a property. Credit Score
A technique used by some lenders to assess mortgage or loan applications. Daily interest
When lenders calculate interest based on the mortgage balance outstanding each day. This means immediate benefit is gained from any money paid off the mortgage. Deeds Release Fee
Some mortgage lenders charge this fee when clients repay their mortgage to cover the cost of releasing their charge over the property. Early Repayment Charge
If you repay all or part of your mortgage balance this fee may be payable to your lender although it usually only applies during special offer periods i.e. during a fixed rate agreement or discounted period. Confirmation of any early repayment charges will be in your mortgage offer letter. Equity
This is the difference between the value of your property and the amount outstanding on your mortgage. Exchange of Contracts
This process is completed by your conveyancer when you purchase or sell a property. Once exchange of contracts has taken place both sellers and purchasers are legally bound to complete the property transaction at some specified future date. Financial Services Authority (FSA)
An independent body established to regulate the UK financial services industry. Freehold
A form of legal title where you are the absolute owner of both a property and the land it is built on. Higher Lending Charge
Lenders sometimes charge this fee if you require a mortgage which they consider high compared with the value of the property. Key Facts About Our Services
Sometimes called an initial disclosure document it contains information about the service you will receive from your mortgage broker or lender including whether you will receive advice. Key Facts Illustration
The Financial Services Authority insist that all lenders provide key facts illustrations and that they all produce them in the same format to make it easier for you to compare different mortgages. The document sets out full details of a specific mortgage product including amount, interest rate, fees, repayments, incentives and much more. Land Registry Fee
This is a fee levied when you buy a property or change your mortgage provider as the Land Register needs to be updated. Leasehold
It is usual for flats and apartments to be owned as leasehold because unlike freehold you do not own the land on which the flats or apartments have been built. A lease is established for you to own the property for a set number of years, commonly in excess of 100 years after which time either a new lease is negotiated or the property returns to the freeholder. Local Authority Search
Carried out by your conveyancer when you are buying a property this will provide you with any details known by the local authority about the property, for example any approved planning permission, any planned local road improvements or proposed changes in the local area. This is a valuable search as anything it reveals could have an impact on the desirability and therefore value of the property concerned. LTV
LTV stands for loan to value which compares the amount of mortgage against the value of a property. For example if a house is valued at £210,000 and it has a mortgage outstanding of £178,500 the loan to value (LTV) is 85%. Mortgage
A loan used to buy a property where your lender holds the property as security. This means they will repossess the property if you do not keep up the agreed repayments. Repayments are usually paid monthly over anything up to 40 years although 25 years is more the norm. Mortgage Broker
A mortgage broker has access to mortgages from a number of lenders. They will be able to advise you on the most suitable mortgage for your circumstances. Mortgage Deed
A legal document dealt with by your conveyancer which when executed will establish a mortgage or legal charge over a property for a lender. Mortgage Term
This is the length of time over which you agree to repay your mortgage. It is usually in the region of 25 years although it can be up to 40 years depending on the circumstances. Negative Equity
This is when the amount outstanding on your mortgage is more than the value of your property. Portability
If you decide to move house some lenders will allow you to move your mortgage across to your new home, this is called portability. Re-mortgage
This is when you move your mortgage from one lender to another. It sometimes involves raising some additional money but may also be done simply to secure more favourable mortgage terms. Stamp Duty
This is a Government tax payable when you purchase a property worth more than £175,000. Details of the amount payable vary depending on the purchase price of the property and will be advised to you by your conveyancer. Valuation
When you apply for a mortgage your lender will require a valuation on the property you are buying to make sure it is worth what you have suggested and it is sufficiently more than the amount you wish to borrow. There are three basic types of valuation, mortgage valuation, homebuyers valuation and structural report.
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