APR
Abbreviation for Annual Percentage Rate. Where an APR is quoted it will be based on the total charge for credit. This will include (where applicable) any Arrangement and Valuation fees, typical legal fees, Higher Percentage Advance Fee and Sealing fees.
arrangement fee
This fee is charged for arranging a loan and it covers administration expenses
assignment
A legal transfer of rights or benefits eg in your mortgage, a lease or life assurance policy.]
assured short hold tenancy
Tenancy unde.’ the Housing Act which provides the right for an individual to live in a property which is his principal home for a fixed period of time at a rent agreed with the landlord.
Bank of England nil'” rate/repo rate
The minimum rate at which banks are prepared to lend money it acts as a benchmark for other interest rates, including personal loans and mortgages
booking fee
A payment made at application to secure a particular interest rate. The payment of a booking fee does not necessarily mean we will offer you a mortgage.
Building & (Contents Insurance)
Buildings insurance This covers the actual building i.e. your home, against damage by fire, storm, subsidence and so on. The amount of cover should be sufficient to completely rebuild the property. This rebuilding cost is given on the mortgage valuation report.
Contents insurance This covers your personal belongings against loss or damage. It may also cover certain other liabilities.
capped rate
Capped rate loans offer you an interest rate guaranteed not to rise above a certain level but if interest rates fall then your payment rate will too. It gives you the best of both worlds – a capped rate loan combines the savings of a variable rate when interest rates are falling and the peace of mind of having a fixed rate mortgage when interest rates are rising.
certificate of title
The document prepared by the solicitor for us confirming all formalities are satisfactory prior to completion. Used by solicitors in England and Wales.
completion
The formal conclusion of the transaction when purchase money is handed over and legal formalities are dealt with.
contract
A legal agreement between purchaser and seller which binds both to complete the sale and purchase of the property. It is prepared in duplicate, and a copy is signed by each party. When these contracts are exchanged by your solicitor, the obligation to buy and sell becomes legally binding.
conveyance
The Deed/document that transfers the land where the title is unregistered.
direct debit
This is an instruction to your bank/building society to allow The lender to take monthly mortgage payments direct from your account.
disbursements
Amounts that your solicitor has to payout on your behalf, in connection with the transaction e.g. search fees
early redemption charge
A sum which has to be paid if the mortgage is repaid within a certain time. The actual amount due would be dependent on when you redeemed and would be stated in your Offer Letter. Early redemption charges will be waived in the unfortunate event of death of a borrower during the term of the mortgage.
equity
The difference between the value of the property and the amount of loan outstanding on it.
feuhold
The Scottish term for the right of absolute ownership in land.
fixed rate
With fixed rate loans your interest rate is guaranteed not to change for a set period of time, so you will have the security of knowing exactly what your mortgage payments are going to be each month.
freehold
The right of absolute ownership in land.
further advance
Additional monies advanced on your loan and secured on your property.
gazumping
When the seller accepts an offer, but then accepts a better one from another prospective purchaser.
ground rent
An annual sum paid by the leaseholder to their landlord, as a rental amount for the ground on which the property stands, which the and lord actually owns.
“HPAF”
Higher Percentage Advance Fee. If your mortgage represents a high percentage of the price or valuation of your property (usually 70% or more) you may have to pay us a HPAF fee. The fee is calculated as a percentage of the upper portion of the loan. If you require further information regarding this please refer to our Customer Service department.
“insurance fee”
The amount charged by us for checking that the buildings insurance you have arranged, if not the lender could provides the necessary cover.
“margin”
The additional rate of interest specified as the margin in the Offer Letter.
mortgage
A loan which is secured on your home.
mortgage conditions
These are printed conditions contained in a booklet which, together with the terms of the Offer (see Standard Offer Conditions) form the complete terms of your mortgage following completion.
mortgage offer
The document which states that lender is prepared to offer a loan for the purchase or remortgage of a residential property. This document will give details on the exact amount of money that we will be able to lend to you and on what terms.
mortgage term
The length of time the mortgage runs for e.g. 25 years.
mortgage valuation
This is done on behalf of the lender and is purely to find out the suitability of the property for lending purposes and what the property is ‘worth. A mortgage valuation report prepared on behalf of lender may not be relied on by you for any purpose.
We would strongly recommend for your own peace of mind having either a Home Buyers Report or a Full Structural Survey completed, as these will give much more in·depth information on the condition of your chosen property. You should contact a qualified surveyor (either Royal Institution of Chartered Surveyors or Incorporated Society of Valuers and Auctioneers) for full details and charges.
portable
You may be ‘able to use your existing mortgage product if you move house.
interest only mortgage
Only interest is paid on the loan each month and all the capital remains outstanding. You make a separate payment into an investment product such as an endowment, pension or ISA (a repayment vehicle), or alternatively, if you know that in the future you will be inheriting a lump sum, you could use this to pay off the loan. Whatever method you choose, you should make sure that at the end of the mortgage term you are able to pay back from your own resources the amount your have borrowed. The Lender does not require a specific repayment plan, we only ask that term assurance is taken out to cover the loan.
interest rate
This is the rate at which the interest charged on a loan is calculated.
investment mortgage
A mortgage to enable you to purchase a property for letting and commercial. Investment purposes.
land registry fee
A fee paid to H.M. Land Registry to register changes to the title e.g. new ownership.
lease
A contract with rights and obligations between Landlord and Tenant where the Landlord grants the Tenant a Leasehold interest in land in
return for rent.
leasehold
A right to exclusive possession of land for a fixed term of years where the Freehold is owned by another person.
LIBOR linked rate
LlBOR stands for London Inter Bank Offered Rate and is the interest rate at which banks will lend to each other. LlBOR can vary day by day and is not linked directly to bank base rate. So, for mortgage purposes, the interest rate is set at the beginning of the mortgage and remains at that level until LlBOR is reset usually on the 12th March, June, September and December of each year, and so on throughout the mortgage term. For new customers, the rate may be changed in between the setting dates if market conditions change.
life assurance
An insurance policy designed to payout a specified amount
towards your mortgage balance, in the event of your death.
local authority search
A search, made by the purchaser’s solicitor, at the local authority for the area in which the property is situated. This search would reveal details; such as the maintenance responsibility of roads and footpaths serving the property, road proposals in the immediate vicinity, whether the property is connected by the mains drain, any planning matters affecting the property or which could adversely affect the property in the future.
ocal search indemnity insurance
An insurance policy obtained on a remortgage or purchase by us in lieu of a local authority search paid for by the ‘owner or purchaser. Fee listed in Tariff of Charges.
loss of rent insurance
Is an insurance to cover against periods when tenants are not paying rent.
purchase price
The amount agreed to be paid to buy a property. This can be higher or lower than the actual valuation. The lender will lend an amount based on the lower of the purchase price or valuation.
redemption/part redemption
When the mortgage loan, or part of it, is paid off.
redemption administration fee
Charge made for discharging the mortgage at the end of the mortgage term.
remittance fee
Please see Telegraphic Transfer Fee.
remortgage
The replacement of the original mortgage loan with new finance. You can remortgage to obtain lower monthly payments or, if you have sufficient equity in your property, to raise money for a number of purposes.
repayment mortgage
(Also known as a Capital and Interest Mortgage.) With this type of mortgage your repay part of the capital each month plus interest on the outstanding balance. Your payments will gradually reduce the outstanding amount over an agreed number of years and at the end of this term the mortgage will be repaid in full Separate life assurance for the amount of the loan is required.
report on title
The document prepared by the Solicitor for us confirming all formalities are satisfactory prior to completion. Used by solicitors in Scotland and Northern Ireland.
residential investment mortgage
A mortgage to enable you to purchase a property for letting and investment purposes.
Retention
An amount kept back from the loan by us until certain works to the property are complete.
right to buy
The Housing Act 1980 provides for tenants renting from their local authority or a Housing Association who may wish to buy their home. Full details of eligibility are available from the relevant local authority.
second mortgage charge”
An additional mortgage loan secured on your property that you take out with another lender.
Solicitor
The lawyer who represents the parties in a transaction and takes care of all the legalities.
special conditions
These are conditions specific to your mortgage and are contained in your Offer Letter.
stamp duty
This is a government tax on the price paid for a property.
standard offer conditions
These are printed conditions which together with the Special Conditions and Offer Letter form the terms of the Mortgage Offer.
subject to contract
term is used when the sale of a property has been agreed, but before contracts have been exchanged. Either the seller or purchaser can withdraw from the agreement at this stage.
tenure
The type of ownership of a property e.g. freehold or leasehold.
term assurance
A form of life assurance for a certain period of time which pays a lump sum on death.
telegraphic transfer fee
(Also known as Remittance Fee.) This is charged for sending sums of money electronically.
title
The right of ownership of land.
title deeds
1 he documents which prove the Title. These may be in the form of Conveyances or may be an extract of the records held at H.M. Land Registry.
transfer
The Deed/document that transfers the land where the title is registered.
transfer of equity
See definition on Tariff.
Undertaking
A promise to complete a task.
