Not sure what it all means? Use our jargon busting mortgage glossary to figure it all out.

A

Affordability
This relates to your ability to repay your mortgage. Your affordability is based on a number of factors such as your monthly income after all regular financial commitments have been deducted. To help you work out what you can afford, use our mortgage calculators.

Assignment
The transfer of ownership of something from one person to another. For example if you're buying a leasehold flat the ownership is 'assigned' to you via a contract.

APR
Annual Percentage Rate. This helps you compare the cost of different mortgage deals. It is the amount of interest you will pay, the length of the term of the mortgage, and other charges such as application fees.

B

Buildings insurance
A policy designed to insure the building and not the contents. For more information on building insurance please visit our recommended providers Household Insurance Services.

C

Completion
This process is the last stage in the purchase of a property. Money being used to buy a property is paid to the seller and the legal ownership of the property passes to the buyer.

Contents
This means the contents of your home, such as personal possessions, furnishings and appliances covered by a household contents insurance policy. For more information on contents insurance please visit our recommended providers Household Insurance Services.

Contract
The written agreement between the seller and the buyer of a property to transfer ownership.

Conveyancing
A system used by lenders as part of the application process to assess the risk of lending money.  This often uses various sources of information, such as credit history, income, time in job and so on.  Credit scoring is not a standardised process and may vary from lender to lender.

Credit Scoring
A system used by lenders to assess the suitability of your application.

D

Discharge Fee
A fee you may have to pay some lenders to release their hold over a property once you've paid off your loan.

E

Early repayment charge
A charge you may incur if you pay off all or part of your mortgage earlier than agreed.

Equity
The difference between the amount you owe on your mortgage and the current value of your property.

Excess
The amount you will have to pay on any insurance claim you might make. The amount varies so always check what the excess is before buying an insurance policy. The cost of the insurance cover can be affected by the level of the excess.

Exchange of contracts
The swapping of legal binding contracts between a buyer and seller.

Exclusions
Most insurance policies have exclusions - the things that are not covered in the policy. We advise checking the policy documents thoroughly for exclusions as they could affect any claims you have to make.

F

Final repayment charge
This charge may be applied when the mortgage is paid in full.

G

Gazumping
Gazumping is a homebuyer's nightmare. You're close to completing the purchase of your chosen home and then someone else offers a higher price which the seller decides to accept.

H

Higher lending charge
A fee charged by some lenders where the amount borrowed exceeds a given percentage of the value of the property.

Home Insurance
Home insurance includes contents insurance and buildings insurance. The first covers personal possessions, furniture and appliances in your home and should cover any loss or damage. Buildings cover insures the property itself - the roof and walls for example. If a storm damages your roof your buildings insurance should cover the cost of repairs.

I

Interest Rate
This is the rate at which interest is charged on the mortgage balance. The amount may be calculated on a daily, monthly or annual basis.

J

Joint Tenancy
Under a Joint Tenancy agreement the joint owners together own the whole property and do not have a particular share in it. If one of the owners dies the other automatically becomes the sole owner.

K

Key Facts Illustration
A Key Facts Illustration is a personalised illustration that details things like the amount of borrowing requested, your monthly repayment amounts, any associated fees and charges. All lenders must set out their KFIs in the same format, so you can easily compare products before submitting an application to a lender.

L

Land Registry
A government department responsible for publicly recording interests in land in England and Wales.

Leasehold
This describes the temporary ownership of a property.  The leaseholder, or lessee, owns the property for a predetermined period and does not own the land on which the property is situated.  The term of a lease can vary from six months to 999 years.  Leases are most often used for flats, offices and shops.

Lender
Any person or company who offers to lend you money for an agreed period of time. The company that gives you your mortgage is a lender.

Life Insurance
An insurance policy which, in return for the regular payments, pays a lump sum on the death of the insured. For more information on life insurance contact one of our highly trained advisers on 0800 652 5636.

Lump-sum payments
One-off payments, on top of your regular repayments, that can be used to pay off your mortgage early - if your lender allows you to. With some mortgages there may be an early repayment charge associated with making overpayments above a given percentage.

M

Mortgage
A mortgage is a loan which you use to buy a home. You pay your mortgage by way of regular payments. Your home will become the security for the loan which means that if you cannot afford your mortgage repayments your home may be repossessed.

Mortgage Deed
A legal document establishing a mortgage on a property.

O

Over payments
Some mortgages allow you to pay more than your usual monthly payment, up to a maximum.  By taking advantage of this, you could potentially reduce the term of your mortgage and you could save money on interest payments.  See ‘flexible mortgages’ for more details

P

Payment holidays

Some mortgages allow you to take a payment holiday, i.e. totally suspend your mortgage payment, for a specified period.  See ‘flexible mortgages’ for more details.

Premiums
The term for the payments you make in return for your insurance cover. These are usually collected on a monthly basis.

R

Remortgaging
Remortgaging is the process of moving your mortgage from one lender to another, or choosing a different type of mortgage from your current lender. Thinking of remortgaging? Then talk to us today to discuss your options. Call free on 0800 652 5636.

S

Stamp duty
A tax paid by the borrower to the government on the purchase price of any property over a certain threshold. Remember to factor in these costs when working out your budget to purchase a property.

Standard Variable Rate (SVR)
A lender’s SVR is the interest rate a borrower is charged if they are not tied in to a fixed rate and, as the name suggests, is subject to fluctuation; this means that a borrower’s monthly mortgage payment will fluctuate also.

SVRs are influenced by movements in other rates, e.g. the Bank of England base rate, but they are not directly linked to another rate.

T

Tenancy in common
Tenancy in common is rather different. The tenants in common each have a definite share in the property. This would be the most appropriate agreement where people want to own a property in separate pre-determined shares. Under this form of ownership if one of the owners dies, his share of the property will pass on to whoever he specifies in a will, or if a will is not made, in accordance with the rules of intestacy.

Title deed
Documents that provide evidence of property ownership.

U

Under Payments
Some mortgages allow you to make a reduced payment for a specified period.  See ‘flexible mortgages’ for more details.

V

Valuation
There are three types of valuation, as follow:

Basic Valuation.  The minimum required by all lenders.  It is written fro the benefit of the lender and confirms that the property is suitable security for the lender’s purposes.  It does not provide any guarantees for the borrower and, if fault is found with any aspect of the property, the borrower has no redress against the valuer or the lender.  The cheapest form of survey.

Home Buyer’s Report.  This type of valuation is written for the benefit of the borrower.  As with the basic valuation, it confirms to the lender that the property is suitable security, but it provides more detail about the quality of the property, lists major faults etc.  It is considerably more expensive than the basic valuation, but does provide the borrower with a degree of protection, as they can sue the valuer if they are found to be negligent.  More expensive than a basic valuation.

Full Structural Survey.  The most comprehensive survey; it provides detailed information on minor and major faults.  The borrower can again rely on the survey and can sue the valuer in the event that they are found to be negligent.  The most expensive type of survey.

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Y

Yield on Rental Property
This is what a landlord might receive in rent, expressed as a percentage of the purchase price of the property.  Remember that yields vary depending on a number of factors and that maintenance costs and using a letting agency would reduce the potential profitability of a let.