The following terms are essential to understand mortgages and property dealing in the UK. If you are looking for a property that best suits your interests, call Credas Financial, and they will be happy to help you.

• Advice

A recommendation or financial consultation by an advisor about a mortgage deal that is suitable for you.

• Annual Percentage Change of Rate (APRC)

The overall cost of the mortgage. It includes the interest rate and fees.

• Approved in Principle/ Agreement in Principle

Lenders give a certificate to show the amount being lent to you. An approved principle is not a guarantee statement but can be used when registering with estate agents.

• Base Rate

The Bank of England sets the interest rate for lending and borrowing purposes.

• Cashback Mortgage

Cashback mortgages give customers a cash bonus. It is essentially an incentive for lenders to encourage people to take out a mortgage deal with them.

• Discounted Variable Rate Mortgage

A set percentage deduction for your lender’s standard variable rate over a specific period.

• Early Repayment Charge

You have to pay an additional amount if you repay your mortgage early, depending on the type of deal you may have.

• Financial Conduct Authority

An institution that regulates the financial services industry in the UK.

• Fixed-Rate Mortgages

A fixed interest rate is applied to your mortgage plan over a specific period.

• Flexibility

Flexible features which may apply to many types of mortgages. These include the facility to overpay or take fewer payments.

• Higher Lending Charge

A charge levied on the insurance payment protects the lender from financial loss if there is a significant fall in the mortgage payment plan.

• Interest Only Mortgage

An interest-only mortgage is a type in which the mortgagor (the borrower) must pay only the interest on the loan for a certain period.

• Joint Mortgage

Mortgage deals with more than one individual involved.

• Lender’s Arrangement Fee

The lender charges a fee to set up the mortgage plan to cover administration costs.

• Lender’s Standard Variable Rate

The lender charges the standard interest rate on mortgages without discounts or deals.

• Loan-to-Value Ratio

The LTV or loan-to-value ratio is the value of the loan you take out minus the property’s value as a whole. It is expressed as a percentage to understand the ratio better.

• Mortgage Term

The proposed period or tenure in which the mortgage deal lasts.

• Repayment Mortgage

A repayment mortgage is a home loan where you repay a bit of the capital, the amount you borrowed, and some interest each month.

• Tracker Mortgage Rate

A mortgage deal in which the interest rate is linked to the base rate, which can quickly go up and down.

• Valuation Fee

The lender charges a fee for a basic inspection of the property. The valuation report is solely for the lender’s benefit. It is used for the assessment of the property’s security mortgage.