Mortgage Jargon Translated
Affordability
The Society will calculate your total income and outgoings to ensure the proposed new mortgage is affordable from the outset.
Arrangement Fee
The fee charged by lenders to cover the administration costs of arranging the mortgage.
Bank of England Base Rate
The variable interest rate set by the Bank of England Monetary Policy Committee (MPC) against which other loans and savings rates may be calculated.
Conclusion of Missives
This is the final part of purchasing a home, when the purchaser is legally committed to buying from the seller.
Conveyancing process
The legal transfer of ownership process required to action the buying and selling of the property.
Credit Referencing
A method used by lenders to confirm credit worthiness to help in assessing the affordability of an application.
Date of Entry
This is the completion of the legal process when the seller moves out and the buyer becomes the owner of the property and moves in. You must make sure any insurance policies associated with your mortgage and new home, are now in place.
Early repayment Charges
These may be charged to members who move or pay off their mortgage within an introductory rate period.
Equity
The difference between a property's market value and the mortgage left to pay.
Interest Rate
This is the percentage rate which the lender calculates the interest they charge the borrower for the mortgage.
Interest Type
Interest payable may be Variable e.g. the lender's variable rate, Fixed, a certain rate fixed for a term set by the lender, or Discount, a particular rate less than the lender's variable rate, usually for a given term.
LTV
Loan to Value - the percentage of your home which is covered by your mortgage, based on the value (or price if this is lower). For example, on a house valued at £110,000 but priced at £100,000, a £70,000 mortgage would mean an LTV of 70%.
Remortgage
When you transfer your mortgage from another lender.
Repayment
The monthly payments which you make to pay for the amount you borrow and the interest charged on it.
Stamp Duty
The tax you pay when you purchase your property.
SVR
Standard Variable Rate is the rate set by the Lender, taking into account the movement of interest rates at that time.
Title Deeds
The Title Deeds state who owns the property.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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