Downloads
|
Jobs
|
Accessibility
|
Contact Us
|
Site Map
GLOSSARY OF TERMS
A
AER
The ‘AER’ stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
APR
Annual Percentage Rate 'APR' is a figure designed to allow customers to be able to compare different mortgage products. It takes into account not just the interest rate, but any charges associated with the mortgage (such as valuation fees, arrangement fees etc.)
Arrangement fee
These fees are charged on certain products, usually loans where a special interest rate applies e.g. fixed rates.
Arrears
The term 'in arrears' is used to describe a borrower who has failed to keep up their monthly mortgage repayments.
E
Early repayment charge
This may be charged if all or part of your mortgage is paid off during a period of discount or fixed rate. Details of any early repayment charge will be given in product literature, the Key Facts Illustration and your mortgage offer.
Equity
If your house is worth more than the mortgage on it, the difference is known as the "equity". For example, if your outstanding mortgage is £70,000 and your home is worth £100,000 you have equity of £30,000.
F
Further advance
An additional loan secured against your property. For example to pay for home improvements.
G
Gross
The ‘gross rate’ is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.
I
Interest only
With an interest-only mortgage, the payment you make each month comprises just the interest you owe for that month. So you are not paying off any of the capital you owe. The loan is typically paid off at the end of the term with a maturing investment such as an endowment policy.
Initial Disclosure Document
Given to you at the beginning of the mortgage interview, this document clearly sets out the scope of the service that will be provided and the basis of any charges for it.
L
LTV
Loan to value 'LTV' is the amount of your mortgage shown as a percentage of the value of your property. For example, an £80,000 mortgage on a house worth £100,000 would have a loan to value of 80%.
N
Net
The ‘net rate’ is the rate of interest which would be payable after allowing for the deduction of income tax at the specified rate.
Negative equity
Where the mortgage balance exceeds the value of the property.
O
Overpayments
Voluntary payments made in additional to your normal monthly mortgage payments.
R
Redemption
The process by which your mortgage is brought to an end when you have paid back all of the loan, interest, costs and other charges which are due on it. The lender then has no further claim on your property.
Remortgage
Moving a mortgage from one lender to another, without changing property.
V
Vendor
Another name for the person selling the property you are buying.
Contact Us
Branch Finder
Subscribe to our newsletter
Jargon Buster
Budget Planner
Need help? Call us
0161 429 6262
or we’ll call you, click here...