Glossary Of Mortgage Terms
Valuation Fee: A fee charged by the lender for valuing the property, sometimes called a survey fee. There are three different types of valuation:
Basic Mortgage Valuation: Carried out by the lender to enable them to decide the value of the property and general condition of property.
Home buyers Report: Includes the basic valuation, but also gives you a more detailed report on the property.
Full Structural Survey: Carried out by a structural engineer, and gives you a complete structural report on all aspects of the property. Can be very expensive.
Up Front Fees: A broker fee this is normally charged by your broker for the initial work in finding and advising on the mortgage currently Mortgage Adviser UK will not charge a broker fee. An arrangement, booking or completion fee may be charged by your lender. Some may charge them on application, others on completion.
Completion Fees: These fees are charged by the Lenders and can be shown as a percentage say 0.5 or even 1%. Others charge a flat fee.
Solicitors: Solicitors charge for work to be carried out for the legal elements to your mortgage, on some remortgage deals the lender will offer this service free.
Stamp Duty: Charged by the Government in bands
Redemption Penalty: This is a charge made by the lender which becomes payable if you redeem (pay off) your mortgage, before a certain time this is known as “penalty period”. This penalty can be expressed in several ways, either as a percentage of the redeemed mortgage, or as a set penalty i.e., six times your monthly mortgage payment.
Mortgage Indemnity Premium: Normally only applicable on loans above 75% of the purchase price/value. This is an insurance the lender takes out against you defaulting on your mortgage.
Radion Gas Search
After the normal survey you may need:
Damp & Timber Report
Structural Engineers Report
Tree Root or Height Report
Compulsory Insurance: Some lenders offer preferential rates if you will take their insurance. It can be buildings, or buildings and contents, and sometimes unemployment insurance as well.
Different Types Of Mortgage
Moving Home Mortgage: One of the most common requirements customers with a good track record will be in a better position to apply, however there are lenders that will help if you have run into difficulties, what should you do now? Go to Quick Quote
First Time Buyer: Suitable for individuals that have not owned a property before these loans usually offer low up front costs to reduce the initial cost of moving and sometimes provide the ability to borrow up to 100 % of the property value.
Re-mortgage: Re mortgaging need not be expensive or time consuming and depending on the terms of your existing mortgage could save you both money and time. There are some lenders who will pay your fees for you and with the average time to complete a re-mortgage being just 3-4 weeks re mortgaging has never been easier- so what should you do now? Go to Quick Quote
Buy to Let: Whether you already own an investment property, or would like to enter this highly profitable market, choosing the right mortgage for your property can prove the difference between succeeding or not.
A Buy to Let mortgage is now available from a growing number of lenders, all with their own criteria for how much they will lend you, what type of property they will lend on, and of course what interest rate they charge.
Purchase or Refinance up to 85% of property value · Affordability based purely on Rental Income · Single or Portfolio properties · Multiple Occupancy tenancies available, what should you do now? Go to Quick Quote
Let to Buy: These schemes allow you to Let out your existing property and purchase a new one as your main residence. Your existing mortgage payment need only be covered by rental payment Up to 95% available on new purchase, Idea if you want to keep your house for any reason and buy another, bigger or smaller.
Right to Buy: Loans designed specifically for council tenant’s that are eligible to buy their home at a discounted rate. Discounts available are up to a maximum of 70%, (60% in Scotland). Please note: The actual discount amount offered is usually dependant on the total amount of time in council tenancy, of which, there is a minimum period of two years.
Self-Build: Mortgages specifically designed for individuals looking to build their own property, some lenders offering loan features such as the ability to release capital from the loan in stages to suit the borrowers individual build situation and reduce their need for high up front personal investment, what should you do now? Go to Quick Quote
Self-Cert: Self-certification mortgages were a big part of the mortgage scene before the credit crash in 2008 these mortgages are now not available however some lenders still do Fast Track which means you do not need to send in proof of earning however your broker will always want these to arrange a mortgage for you.
Different types of mortgage Repayment
Repayment: Over the term of the mortgage, the capital and interest are repaid, therefore on completion of the mortgage no money is owed to the lender.
Interest Only: As the name implies, with this mortgage throughout the term only interest is paid to the lender, therefore on completion of the mortgage the Capital is still outstanding. An investment vehicle will be needed to repay the capital. i.e., Endowment, Pension or ISA.
Endowment Mortgage: A savings plan that runs for the same term as a mortgage, and on maturity, the endowment should repay the loan. Traditionally, one of the most popular ways of repaying an interest only mortgage. However, due to recent poor market performance this method of loan repayment is proving to be less and less popular, what should you do now? Go to Quick Quote
ISA: Individual Savings Account, a relatively new type of investment it is based on the old PEP, it is a unit trust savings plan which pays out a tax free amount at the end of the term.
Pension Mortgage: Using this method, the tax-free lump sum payable on maturity of a pension policy, is used to repay the capital amount outstanding on a mortgage.
Split Mortgage: This is simply a mortgage that is made up of a mixture of one or more of the above.
Flexible Mortgages or Offset: If you are considering moving or remortgaging, this may be the ideal mortgage for you. Flexible or offset mortgages are designed to adapt, they offer features such as interest calculated on a daily basis (Australian Style), flexible repayments including, payment holidays, overpayments and underpayments and usually they can be linked to a savings account which “offsets” the mortgage amount borrowed so either your mortgage is cheaper per month or you reduce the term of the mortgage, what should you do now? Go to Quick Quote
Check the conditions on your existing mortgage – there may be redemption penalties – this information can be found on your mortgage offer. If in doubt contact us and we will check this for you. · Apply for a redemption statement from your existing lender · Contact us for the best deals and an informal discussion
When submitting your application you should supply us with as much information as possible, this will normally consist of last three months bank statements & payslip’s, proof of identity and latest mortgage statements. These will all help in the smooth process of re-mortgaging.