Are you planning to buy a new home or want to refinance? Applying for a mortgage is a big step and is not that easy. Our mortgages glossary can help you understand all the mortgage terms and every step of the process.

Loan officers and real estate professionals use a variety of mortgage terms that our glossary of mortgage loan terminology defines in a simple way. Use our mortgages glossary for quick look-ups throughout your mortgage loan application process.

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What is Mortgage

The following terms are important in order to understand what mortgages and property dealing are like in the UK. If you are looking for a property that best suits your interest then call us up. We will be happy to help you out.

  • Advice

A recommendation or financial consultation by an advisor about a mortgage deal that is suitable to 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

A certificate is given by lenders to show the amount being lent to you. An approved principle is not a guarantee statement; however, it can be used when registering with estate agents.

  • Base Rate

The interest rate is set by the Bank of England, 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 of time.

  • Early Repayment Charge

An additional amount which you have to pay 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 applied to your mortgage plan over a specific period of time.

  • Flexibility

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

  • Higher Lending Charge

A charge levied on the payment for an insurance which 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 of mortgage in which the mortgagor (the borrower) is required to pay only the interest on the loan for a certain period.

  • Joint Mortgage

A mortgage deal with more than one individual involved.

  • Lender’s Arrangement Fee

A fee which is charged by the lender to cover administration costs to set up the mortgage plan.

  • Lenders Standard Variable Rate

The normal interest rate charged by the lender 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 value of the property as a whole. It is expressed in the form of a percentage to better understand the ratio.

  • Mortgage Term

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

  • Repayment Mortgage

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

  • Tracker Mortgage Rate

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

  • Valuation Fee

A fee is charged by the lender 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.

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    94 Street Lane, Leeds
    9 Sheaf Lane, Coventry Road, Birmingham
    OUR LOCATIONSWhere to find us
    GET IN TOUCHCare Accountancy Social Links
    Taking seamless key performance indicators offline to maximise the long tail.

    Copyright by CareAccountancy. All rights reserved.

    Copyright by CareAccountancy. All rights reserved.