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Mortgage Jargon Terms Used in Mortgage

The property market is no less than a field of study with important terminologies you should make yourself familiar with. Whether you are looking for a first-time buyer mortgage or wish to remortgage your house, it is advisable to know the jargon terms used by mortgage brokers, financial advisors, mortgage lenders, property dealers, and all other parties operating in the market.

Most of the first-time buyer are not aware of the meaning of the terms used. We try to put them in simple words make it easy to understand.

Here are some of the most common and important jargon terms you should know and remember as you apply for a mortgage to purchase your new house:

Agreement In Principle

Mortgage in principle, Decision in principle or Agreement in principle. MIP, DIP or AIP. refers to preapproval of your mortgage from mortgage lender which tells you roughly how much you may be able to borrow. While it is an estimate and does not guarantee the mortgage approval on submission of full mortgage application, you can give a copy of Agreement in Principle to estate agent letting them know you are serious about property purchase and you are mortgage ready.

Adverse Credit

Adverse credit is a term used to refer to credit history with late payment, miss payments resulting in defaults or county court judgement (CCJ) Adverse credit or bad credit are used for those who have poor history of making payments on time resulting in low credit score. Your credit history plays a big role in mortgage application approval. Always check your credit report for details of adverse. It is applicable for people with a history of defaults, late payments, and other activities reducing their credit scores.

Annual Percentage Rate Charge (APRC)

Annual percentage rate charge (APRC) is an indication of the overall cost of a mortgage throughout its whole term, including set-up costs like product fee and the total interest to be paid by the borrower including fix rate and variable rate. Lenders calculate APRC as if the borrowers will keep the entire loan amount with themselves for the entire term. Homebuyers compare mortgage deals offered by different lenders based on the APRC to choose the most cost-effective option.

Arrears

Mortgage arrears meaning, in simple words, is you are behind or missed payments on mortgage. Most of the lender consider 2 late payments as arrears. They affect your credit score and stay on your credit history for 6 years making it difficult for you to remortgage.

Architects Certificate

This is a document issued by an architect that shows their involvement in the design and building of a property. This is an important certificate to have if you want to purchase a new-build property on a mortgage. It is either issued by a surveyor or a chartered architect. It is likely for a newly built property to have no track record. When your mortgage lender sees the architect’s certificate, they ensure that the property you want to purchase is designed as per the current acceptable standards. Lenders may reject mortgage applications if they do not obtain this document or any similar document.

Arrangement Fee

This is fees charge by mortgage lender at the time of mortgage application if you choose to take mortgage with them. The fees are charge for the admin work to setting up mortgage on property. Sometime these fees are known as product fees. Most lenders will allow you to add this to mortgage application or you can pay it off upfront to save on interest.

Arrangement fees can be calculated in two ways. Lender will have a fixed amount of fees charge or they will charge in percentage of the loan. For example, on loan of £200000 your fixed arrangement fees would be £999 or 1% of the loan amount which is £2000. The fees amount will reflect the mortgage rate. In most cases higher the fees lower the rates are on mortgage.

Not every mortgage has a arrangement fees. Some mortgage has no product fees but higher interest rate. Your mortgage broker can advise you while comparing the best mortgage for you weather you should take mortgage with higher fees or no fees.

Bank Base Rate

Earlier known as the Bank Rate, the Bank Base Rate refers to the interest rate set by the Bank of England. Commonly known as Bank of England base rate.

This rate influences the interest rates offered by mortgage lenders operating in the market as they decide the fixed rate mortgage depend on base rate. The base rate is reviewed every month but not change every month. Bank of England will decide if they will increase the rate or reduce the rate depend on the overall economy of the country.

Broker Fee

As the name suggests, the broker fee is the fee charged by mortgage brokers for their services. These fees are charged to borrowers for helping them find the most suitable mortgage deals and to mortgage lenders for connecting them to the right homebuyers.

Not all the mortgage brokers will charge this fees. If you are looking for professional help, it is advisable to look for fee-free mortgage or remortgage brokers. These brokers do not charge fees for mortgage advice.

Capital & Interest Mortgage

Also known as a repayment mortgage. Repayment mortgage are the type of mortgage where your monthly payments are made of total mortgage interest as well as a specific percentage of the actual loan repayment.

The aim of repayment mortgage is to pay off mortgage in full with in the term of the mortgage. With repayment mortgages in early years, you pay off more of mortgage interest and less of the outstanding loan amount. But over long term your interest charge goes down and loan payments are increase.

Capped Rate Mortgage

Capped rate mortgage is a mortgage where the interest rates fluctuate but do not cross a maximum limit. As the name suggests, the mortgage here is capped at a specific rate, giving assurance to the mortgage buyers regarding their repayments.

Cashback Mortgage

As the name suggests, a cashback mortgage involves the borrower receiving a lump sum of the loan’s money in cash after completing the agreement. This is often a specific percentage of the total mortgage value. You can get a cashback mortgage for both variable rate and standard rate deals. Different deals and mortgage lenders have different LTV requirements to make such an arrangement.

Generally, the cashback you receive depends on your mortgage’s size and the maximum amount you can borrow on a deal. Your mortgage broker will help you compare different deals based on the cashback you receive, ensuring that you choose the most suitable option. Always remember your cashback mortgage may sound good option but the interest rate charge is usually higher on this mortgage. Always ask your mortgage broker who would compare the mortgage for you.

CCJ

CCJ stands for Count Court Judgement. It is a court order issued against an individual for failing to make credit repayments. It plays an important role when you apply for a new mortgage. Conventionally, getting a mortgage with CCJ is difficult.

However, you can get a mortgage with bad credit if you approach specialised lenders. Depend on the time of the CCJ register and the amount of the CCJ lender may approved your mortgage application. If you are facing such issues, you can work with your local mortgage broker to find lenders who help borrowers with CCJ.

Conveyancing

Conveyancing is the legal process while buying or selling a property that ensures that the ownership of the property is successfully transferred from the seller/owner to the buyer. This work is carried out by licensed conveyancer or a solicitor.

Conveyancing also makes sure that all parties involved are aware of all small and big details regarding the transfer. It lets the buyer clearly know if there are any restrictions or limitations to the way the property needs to be used. It involves the creation and exchange of legal contracts that bring the buyers and the sellers on the same page. This prevents any misunderstandings or confusion from arising in the future.

Contract Exchange

Contract is a document that outlines the agreement under which a property will be sold to new buyers. It should contain details of conditions that are attached to the sale of the property. What should be left in property or not left in property at the time of sale is mentioned in the contracts.

When both the party’s buyer and seller are happy with the contract, they sign the contract and swap through conveyancer or solicitor. Once contract is exchange then it is legally binding that buyer and seller will not pull out. At the time of the contract exchange the buyer usually put down 10% deposit as a security. Which he may lose if they pull out and not complete the sale. The exchange will protect the buyer if the seller backs out.

Completion

Completion is the most awaited moment in buying and selling of the property. The completion means end of the buying process on which new buyer gets the key to the property. Property purchase and sell can be long and stressful process, when the completion is done every involve, party get sense of relief.

On the day of exchange of contract all involve party agrees the completion date. Then buyer will pay rest of the deposit to solicitor and solicitor request the funds from lender. On completion day seller is paid for the property and handover the keys to estate agent. Your agent will meet you at the property to handover the keys. Completion day and moving day can be same. Unless buyer has plan for some work in new property they can move inn on same day as completion.

Credit Check

A credit check is the process of assessing a homebuyer’s credit history and calculating their credit scores. Mortgage lenders conduct a credit check while processing their clients’ applications to understand their affordability and information about bad credit they may have.

If client do not pass the credit score required as per mortgage lender requirements, then they will decline the mortgage application.

Defaults

Defaults means when mortgage borrowers fail to make payments to their lenders. Whatever the reason may be, a missed mortgage payments or falling behind will be led to a mortgage default. If the number and duration of defaults increase, you risk losing your property.

Debt Consolidation

This is the process of paying off multiple smaller debts by taking out a single large debt. Debt consolidation is carried out to prevent a borrower from managing multiple debts and streamlining the repayment process.

Discounted Rate Mortgage

Discounted rate mortgage is a mortgage where the lender offers a reduction against Standard Variable Rate (SVR). The discount rate mortgage is set for defined period by lender which follows bank standard variable rate which could go up or down.

Early Repayment Charges

These are the charges incurred by mortgage borrowers if they decide to close their mortgage deals before the end of the term. This can involve a borrower ending a deal before their fixed term ends or before a date set by the lender by repaying the mortgage in full. Not all the mortgage has a early repayment charges. Some lenders do offer tracker rate mortgage without ERC.

Mortgage lenders allow borrowers to overpay 10% of outstanding loan in one year. But if borrower make overpayment more than 10 % then it could trigger the ERC. People often end up incurring these costs while remortgaging their properties or while selling property.

Energy Performance Certificate

The Energy Performance Certificate (EPC) is a certificate that denotes the energy efficiency of a house. It involves a grading system where every property is graded for its energy efficiency. It is important for property owners to keep these certificates before selling or leasing their properties. They also help homebuyers assess how eco-friendly a property is and what utility bills they can expect before purchasing new properties.

Equity

Equity is term use for your share in property after you purchase it with deposit. If you buy a house for £200000 and had put 10% deposit, then your share of equity is £20000. Over the time you will pay off the mortgage, as you pay off the mortgage your equity will increase from 10% to 20% or more.

Property prices do rise over the period which will increase the equity in property. For example, your purchase price was £200000 and 10% deposit but if the property price gone up to £300000 then your equity is £300000 minus outstanding mortgage. Many people will free up this equity called equity release while remortgaging for many purposes as home improvement or additional property purchase.

Fixed Rate Mortgage

As the name suggests, a fixed-rate mortgage is a mortgage where the interest rate is fixed for a specific period of time. At the end of the fixed term mortgage rate will change to standard variable rate off that lender which is higher rate. Mortgage borrowers often find a mortgage broker and switch to new mortgage rate once the fixed term on their mortgage ends. This type of mortgages is preferred by many as the monthly mortgage payment remain the same or entire fix term. During the fixed term mortgage if bank of England base rate goes up or down your fixed rate wont change till the term ends.

Freehold

Freehold is the Property ownership type where you own property and the land it is built on. This type of ownership has no time limit or restriction you can own the property.

Freehold is often compared with leasehold, a different form of ownership where an individual owns the rights to a property for a specific time period. Leasehold, as opposed to freehold, does not extend to the land a property is built.

This type of property are preferred by home buyer than leasehold property. A common example a semi-detached house can be freehold whereas block of flats are leasehold as the owner do not own the land hence here, people have ownership rights to the flats for a specific period of time.

Further Advance Mortgage

Further advance is referred to the additional loan your mortgage lender gives you, apart from your existing mortgage amount. Borrowers take this loan after their key mortgage is completed. Just like the mortgage, a further advance is secured against the property you own.

Further advance can be taken for many reason as deposit for property purchase or home extension. People often assume that a further advance is like remortgaging. However, this is not the case. A further advance allows you to retain your existing mortgage and borrow an additional amount at a different term and rate. When you remortgage home, your existing mortgage ends and you switch to a new deal without the additional debt burden.

Ground Rent

Ground rent is paid by a leaseholder to a landowner know as freeholder. It is charge paid for the land on it the block of flat is built. Ground rent usually payable by flat owner as they are leasehold properties. Ground rent can be fixed, or it can be increasing. Most lender do prefer the fixed ground rent than increasing.

Initial Disclosure Document (IDD)

An initial disclosure document (IDD) is a document use to give information about the fees and charges from lenders and mortgage brokers. This document helps client compare different services and charges offered by a different lender. IDD was introduce by financial conduct authority allowing mortgage borrowers to receive all necessary information about the fees and charges they receive.

Such documents support mortgage borrowers (especially first-time buyers) to understand cost involve in their search for the best mortgage they are going to go for. IDD cover all important details related to a mortgage offering, including the fees charged by the concerned lender and the broker firm. IDDs also make it easier for mortgage borrowers to compare different financial products offered by different lenders in the market.

Interest-only Mortgage

An interest-only mortgage is a mortgage where the monthly payments only cover the interest payable on the loan. They do not reduce the actual loan amount, which needs to be repaid in full in the future at the end of the term. Most buy to let mortgage are taken on interest only mortgage to keep the maximum cash flow. Most mortgage borrowers go for repayment mortgage as they want their mortgage to be paid off end of the term. Those who are on interest only mortgage need to have a repayment plan in place to pay off the mortgage at the end of the term.

Joint Borrower Sole Proprietor Mortgage (JBSP)

A joint borrower sole proprietor (JBSP) mortgage is a mortgage deal that lets a borrower’s family member contribute to their mortgage without being the property’s co-owner. Which means the family member name is not on the title on land registry. This is an ideal option for young homebuyers entering the property ladder. Such a mortgage deal gives young borrowers the opportunity to own their own properties while being supported by their loved ones.

Being flexible, a JBSP mortgage can allow the concerned parent or relative to reduce their contribution to the mortgage until the young homebuyer becomes capable of making repayments.

You should know that a JBSP mortgage is different from a joint mortgage. While a joint mortgage leads to of the property owns jointly a JBSP mortgage does not make the parent or family member the property’s co-owner.

Key Facts Illustration (KFI)

Key facts illustration (KFI) refers to a document that gives you valuable information about your mortgage you are applying for. A KFI has an information about the mortgage rate, monthly mortgage payments and any fees involve. KFI allows borrowers to compare multiple mortgage deals offered by different lenders.

It is also called the European Standardisation Information Sheet (ESIS). While KFI is vital document in mortgage as it has a key information about the mortgage which borrower can rely on before mortgage application is made. KFI helps mortgage borrower to compare different mortgage to make the right choice.

Loan-To-Value

Loan-to-value (LTV) refers to the size of a loan expressed as a percentage of the property’s value. LTV is nothing but the size of your mortgage as compared to the value of the property you want to purchase. For example, if a property is price is £100,000 and you have deposit of £20000 which means you borrow a mortgage of £80,000, the LTV here would be 80% and 20% is deposit.

Many first-time buyers will have higher LTV as they have less deposit saved compare to buy to let investor will have 75% LTV as buy to let needs deposit of 20%. Higher the loan to value means higher the mortgage rates and lower the loan to value means lower the mortgage rates.

Land Certificate

Issued by the Land Registry, this is a document proving who owns a property or a piece of land. If a property is given on a mortgage, its land certificate will be replaced by a charge certificate. This implies that someone other than the property’s owner has an interest in purchasing it. However, this certificate is no longer in practice since the Land Registration Act of 2002. Now, owners can look for land titles to prove their ownership of a property or a piece of land. While people still with a Land Certificate can keep their ownership, the law does not recognise the same.

Leasehold

Leasehold properties are where the land on which property stand does not belong to property owner. For example, flats are leasehold. leasehold property involves a freeholder providing the ownership of the property to an individual on a lease. Here, the freeholder is also known as the landlord. The landlord gives their property on a lease for a specific number of years to leaseholders. Flats are leasehold properties, and the leaseholder owns the property but not a land. These leases are often given for a longer period of time, ideally ranging from 99 to 125 years which can be extended.

Mortgage Discharge

Mortgage discharge is when borrower pay off mortgage in full. Generally, it is done at the end of the term, but some borrowers do that early when they have a funds to do that. When property is bought on mortgage the lender registers a charge on property with land registry as they have a interest in property. When the mortgage is paid in full then concerned lender, ending their legal claim on the borrower’s property. It is a document that indicates that a borrower’s mortgage is paid in full and only borrowers name remain on tittle deed.

It is important to note that your mortgage end after you make all your repayments. You need to go through an official process to discharge your mortgage and get your lender’s name removed. Usually, your lender do write to you and do the paperwork.

Maintenance Charges or Service Charge

Maintenance charges are the expenses you incur to repair and maintain your property. They are called service charges. They include all repair and maintenance costs related to the property’s external portions and indoor communal areas covering roof and any drainage. If the property has a lift, these charges will include its repair and maintenance costs, too.

Maintenance charges are required for flats as the leaseholder does not own the land thus pay the service charge to freeholder. To maintain all the common are in the building. The service charge is paid on monthly basic or every 6 months and paid in advance. The freeholder is responsible for the maintenance work of the building. Freeholder issue statement every year detailing these charges.

Mortgage Indemnity Insurance

Mortgage indemnity insurance is an insurance policy that protects a lender’s financial interests if they can no longer receive their mortgage repayments. While not all deals require this guarantee, mortgages with high LTV (loan-to-value) will require borrowers to get mortgage indemnity insurance. Normally, deals with more than 75% LTV are coupled with this insurance policy. While the functionality of mortgage indemnity insurance is similar to conventional insurance policies, it serves a completely opposite purpose. While other insurance policies give you financial cover in the case of losses, this policy requires you to provide financial cover to your mortgage lender.

Mortgage-Porting

Mortgage-porting is the process of moving your existing mortgage from one property to another. It allows you to keep your mortgage rate even when you shift to a new property. One of the many benefits of porting your mortgage is that it lets you stay with the same lender. If you are shifting to a new house fairly early and your lender may ask for early repayment charges to close the deal, mortgage-porting will help you save a on early repayment charges.

Not all mortgages are portable, lenders may have a restriction if you can port the mortgage to new property. Mortgage porting is very convenient which allows borrower to move house even if they are in fixed term mortgage, without triggering early repayment charges.

Mortgage-Underwriting

When mortgage application is made to lender, they will make certain checks and assessments before approving your mortgage application. This process is called mortgage underwriting. It involves your mortgage lender verifying your occupation, income key in on the application, bank statements, credit commitments and other relevant details.

Underwriting allows lenders to confirm the income and outgoing declare while making an mortgage application, which help to assess the risk involved in lending to new borrower.

It is important to know that mortgage underwriting is not a passive process for you. You will be actively involved throughout the process as the lender may ask for specific documents whenever needed.

Mortgage Exit Fee

A mortgage exit fee is a fee a lender may charge at the end your mortgage, or if you choose to pay mortgage early before end of the fixed term. Borrowers also pay these fees when they reach the end of their original term or when they remortgage with different lenders.

Depending on the mortgage lender you work with, the mortgage exit fee can carry multiple names, such as the Deed release fees, repayment administration fee, discharge fee, closure fee, etc. Know the amount of exit fee charged by a lender and the regulations associated with the same before finalising your deal.

Mortgage exit fees and early repayment charges are not the same. Normally mortgage exit fees is up to £300, but ERC can be percentage of the loan.

Negative Equity

This is the situation wherein a property’s market value is lower than the value of the outstanding mortgage on it. Negative equity arises when a property’s price drops, making it fall below the value of its mortgage. This often puts borrowers in a tricky situation as they would still owe more after selling off their property.

For example, if property was purchasing price was £200000 and mortgage was £190000. If the property market goes down pushing the property price to £180000, that is £10000 negative equity.

Negative equity could impact your ability to remortgage to new lender or it also makes it difficult for you to switch to a new mortgage deal. Most mortgage lenders hesitate to deal with borrowers with negative equity.

Outstanding Balance

Outstanding balance refers to the total amount you need to repay for your mortgage at any point in time. It can be simply calculated by deducting the amount you have paid so far from the total amount borrowed.

For example, if you have taken a mortgage of £500,000 and paid off £300,000 so far, your outstanding balance will be £200,000. As a mortgage borrower, you should keep track of this balance and ensure that it does not pile up over time. Outstanding balance figure are needed at the time of remortgage or when you settle the mortgage.

Transfer of Equity

As the name suggests, transfer of equity is the process of changing the legal ownership of your property by adding or removing the name(s) of people from its title. It is a common misconception that transfer of equity involves monetary transfers.

Although the name may seem deceptive, it is important to note that the transfer of equity does not always involve any transfer of money. The most common cases where a transfer of equity takes place are the ones where a couple gets married or divorced.

Tenure

Tenure is a term used for the type of the ownership of the property. There are two major forms of ownership involved – freehold and leasehold. This determines the extent of your ownership of the house you live in.

Freehold Tenure

Freehold is the Property ownership type where you own property and the land it is built on. This type of ownership has no time limit or restriction you can own the property. Most of the houses are freehold. But saying that some of the houses are leasehold.

This type of property is preferred by home buyer than leasehold property. A common example is a semi-detached house can be freehold whereas block of flats is a leasehold as the flat owner do not own the land hence here, people have ownership rights to the flats for a specific period of time.

Leasehold Tenure

Leasehold properties are where the land on which property stand does not belong to property owner. For example, flats are leasehold. leasehold property involves a land owner or a freeholder providing the ownership of the property to an individual on a long lease. Here, the freeholder is also known as the landlord. The landlord gives their property on a lease for a specific number of years to leaseholders. Flats are leasehold properties, and the leaseholder owns the property but not a land. These leases are often given for a longer period of time, ideally ranging from 99 to 125 years which can be extended.

Total amount payable

As the name suggests, the total amount payable refers to the entire mortgage amount you need to pay to your mortgage lender. This is the sum total of the amount you borrowed, and the interest charged over the mortgage term. The longer your mortgage term is, the greater your total amount payable will be.

Your total amount payable will also depend on the type of mortgage deal you get. If you opt for a variable-rate mortgage, you may end up paying more if the interest rates increase until the end of your term. The total amount always include the fees associated with the mortgage.

Remortgage

Remortgaging is the process of switching from one mortgage deal to another. It involves closing one mortgage deal and opening another one with the same or different lender. People may choose to remortgage to reduce the interest paid, make home improvements, settle other debts, and other relevant reasons.

Variable Rate

This is an expression used to describe the fluctuating nature of the interest rates charged by mortgage lenders. These rates depend on the Bank of England base rate.

Valuation Fees

When you apply for a mortgage for a property you want to purchase or remortgage , the lender will value it to see how much it is worth. This allows them to justify the mortgage loan amount you are asking from them. The fees lenders charge to determine the value of the property is called a valuation fee.

Lenders often charge valuation fees before the property valuation takes place. Borrowers are informed about these fees when they apply for a mortgage on a new home purchase. Not all lenders charge valuation fees, in fact most lenders offer free valuations on remortgages and purchases. The fees charged may depend on the loan amount. Some lenders, like Halifax, charge flat valuation fess of £100 on your purchase application.

The valuation is carried out (only for mortgage purposes) to check if the property is worth the money paid. This means the surveyor won’t go into details about the condition of the property. If a home buyer needs the details’ condition survey of the property, then it is advisable to go for a homebuyer survey. This survey is usually more expensive, but it will give you a lot more details on the property’s condition.

The valuation fee ranges from £100 to £800, depending on the lender and the property price.

Valuation methods most lenders use,

Automated Valuation: This is an automated valuation model (AVM) the valuation can be carried out without visiting the property.

Desktop Valuation: Valuations are carried out on sales prices around the area with the help of local knowledge without a surveyor visiting the property.

Physical Valuation: The Valuer will visit the property and do a physical inspection of the property. They will also look for the market data and condition of the property.

These were a few important jargon terms you should keep in mind before you start the journey of purchasing a property. Make sure you work with a skilled and experienced mortgage broker to make a smooth and successful mortgage application.

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It is been reported government is planning to introduce new 99% LTV mortgage with 1 % deposit to help first time buyer to be on the property ladder.

Remortgage With Same Lender?

When it comes to remortgaging your home, there are two major ways in which you can go about it. You can either stay with the same lender and replace your existing mortgage deal with a new one or find a new lender and get yourself a new deal. Based on your circumstances, it is important to choose the most feasible option. Work with a reliable and capable remortgage broker to guide you in making the right decision. Let us start by understanding is its good idea remortgaging with same lender?

Mortgage Jargon Explained

Mortgage Jargon Terms used . The property market is no less than a field of study with important terminologies you should make yourself familiar with. Whether you are looking for a first-time buyer mortgage or wish to remortgage your house, it is advisable to know the jargon terms used by mortgage brokers, financial advisors, mortgage lenders, property dealers, and all other parties operating in the market. Here are some of the most common and important jargon terms you should know and remember as you apply for a mortgage to purchase your new house: Agreement In Principle

Self-employed Mortgage

While buying a property is a dream come true, many self-employed individuals find themselves worrying about getting mortgages.

How To Get Mortgage On Visa

If you live in the UK and are still on a VISA, you can purchase a property on a mortgage, even if you do not have an ILTR (indefinite leave to remain).

Higher Interest Rates And Remortgaging Options

As of the August of 2023, the Bank of England has increased its base rate for the 14th consecutive time, making it more difficult for borrowers to get good mortgage deals. The current base rate of 5.25% is the highest it has ever been since March 2008. Speaking of high rates, the average two-year fixed mortgage rate in the UK is now at 6.85%, crossing the peak of 6.55% in October.

What Is APRC?

APRC refers to the annual percentage rate. As the name suggests, it is the rate of interest a lender charges for their loan on an annual basis. This interest is often associated with financial instruments like credit cards, loans, mortgages, etc. It lets the borrowers know how much interest they will be charged for the amount borrowed annually.

What Is A Credit Score?

In simple words, a credit score is a number that represents your creditworthiness. The number is given to every citizen of the UK above the age of 18, making them eligible for financial borrowing. Your credit score plays an important role in financial lenders approving your applications and lending you money. The higher your credit score is, the better your profile looks to a potential lender. High credit scores often convince lenders to lend money. On the other hand, a lower credit score may increase the chances of declining your mortgage application While every lender uses different methods to calculate your credit score, all of them use information obtained from three major credit reference agencies – Experian, Equifax, and TransUnion. These agencies work with building societies, banks, retailers, mobile phone companies, and other relevant entities to help them decide if a borrower is capable of repayments.

What Is Loan To Value

When you are getting a mortgage to purchase or remortgage a property, the rate of interest and the deposit to be paid are the two most important factors that influence your decision. Both these factors decide the repayments you would be required to make over time. Another highly important factor that dictates your choice and influences the two factors mentioned above is loan-to-value (LTV) or the LTV ratio. Every mortgage lender takes LTV into consideration before offering a suitable mortgage deal to the borrowers. So, what is loan-to-value?

Tenants In Common” And “Joint Tenants

Especially in the case of first-time buyers, people choose to purchase properties with their friends or partners. This helps them reduce the deposit paid by each individual and increases the amount they can borrow. While most people choose to partner with one other individual, it is possible for up to 4 individuals to be legal owners of a property. However, confusion between Tenants in Common and Joint Tenants is common when it comes to joint ownership. If you are planning to share the ownership of a property you purchase, it is important to understand whether you should go with Joint Tenants or Tenants in Common.

Type of Survey

Conducting a house survey is one of the many important assessments that need to be made before going ahead with the purchase. Depending on the situation, property, and preferences, you can choose from the many types of building surveys available to you. What is a house survey? As the name suggests, a house survey is an assessment of a property before it is purchased. While purchasing a house, you may need to conduct multiple surveys, such as a homebuyer survey, physical valuation for getting a mortgage, structural surveys, etc.

First-time Buyers Tips

Activity Among First-time Buyers Is Increasing As Annual Price Increase Slows. Here are some tips for first time buyer. When it comes to purchasing properties, first-time buyers are often sensitive to property prices and the mortgage rate prevalent in the market. Property prices in the UK increase every year, adding to the value of houses and flats being sold. First-time buyers need to be conscious of this increase as it influences their overall cost of purchasing their first homes. In March 2023, the average price of properties entering the market experienced a rise of 0.8%, which is below the monthly rise of 1% witnessed in March over the last two decades. This reflects greater pricing caution by property sellers across the country. While the 1.2% price jump in the top-of-the-ladder sector acts as an exception, properties for first-time buyers the ones in second-stepper sectors are seeing a slower annual price rise.

Shared ownership mortgages

As the name suggests, a shared ownership mortgage is the type of mortgage where you share the ownership of the property with another individual(Housing Association). In other words, you purchase only a portion of the property on the mortgage and pay rent for the other. Also known as “part buy, part rent”, a shared ownership mortgage makes you an owner and a tenant of the same property. It allows you to own the property without making a heavy deposit as you need to pay deposit only for the share purchased by you. This mortgage is often preferred by first-time buyers as they are new to the market and often struggle with gathering a big sum of money for deposit. Housing associations allow you to purchase anywhere between 25% to 75% of a property and get a mortgage for the same. For the remaining 75% to 25% of the property, you will be required to pay rent to the housing association. In most cases, buyers are required to provide 5% of their share as a deposit.

How To Staircase Shared Ownership?

As you know shared ownership property allows you to own a specific percentage of the house. The control you have as a shared owner is limited to your property share. If you want to increase your stake in the property, you can staircase shared ownership. What is staircasing in shared ownership? In shared ownership, staircasing refers to the process of buying more shares in your property to own a greater portion of the property. Depending on the terms of your lease, you are allowed to staircase after living in the property for a specific duration. This allows you to have more ownership in the property by buying more shares.

What Is Conveyancing

Taking a mortgage for buying a property involves a range of legal considerations to make the process legitimate and smooth. Once you have selected the right property and the right mortgage for purchase, you will need to look after conveyancing for handling the legal matters. What is conveyancing? Conveyancing is the legal process while buying or selling a property that ensures that the ownership of the property is successfully transferred from the seller/owner to the buyer. If you are planning to purchase a property on mortgage, conveyancing helps you become the legal owner of the property once you have secured your mortgage all arrangements have been made.

Contractor Mortgage

When it comes to mortgages, people have always taken into consideration borrowers who are salaried employees. However, as more and more professionals are becoming contractors, this notion is changing. If you are a contractor and want to buy a property, you can do so by taking a contractor mortgage. Work with your mortgage broker and look for a lender who provides contractor mortgages at deals that are suitable for your circumstances. What is a contractor mortgage? As the name suggests, a contractor mortgage is a type of mortgage given to contractors. Here, the mortgage lenders provide mortgage to contractors based on the type of contracts they are on, the consistency of their work, and other relevant factors.

Right to buy mortgage

A right to buy mortgage is a government mortgage scheme that allows council tenants in the UK to purchase the houses they live in. These properties are often sold at a discount and in many cases, the tenants are not required to pay the deposit as well. Here, the councils let the mortgage borrowers put the discount offered to them towards the purchase price of the property. A right to buy mortgage is subject to the same eligibility criteria that are applicable for a normal mortgage deal. The discount offered to the council tenants depends on a range of different factors, such as the type of property to be purchased, the location of the property, the value of the property at the time of application, and more. It is advisable to work with an experienced mortgage broker to find the right mortgage lender and choose a deal that best suits your circumstances.

What is green mortgage

Over time, the importance of sustainable development has increased worldwide. Green mortgages help you take a step toward sustainable living, keeping track of the impact we have on the environment around us. Lenders today prefer giving green mortgages to borrowers to instill a sense of awareness about the depletion of non-renewable resources. Let’s know more about green mortgage. What is a green mortgage?

Remortgage with bad credit

Your credit score arguably plays the most important role in finding an ideal mortgage . Lenders often turn down borrowers with poor credit scores as they are not willing to take any risks in lending them money. It is therefore important to make all your credit payments on time and maintain a good credit score as it is vital for remortgaging your property. However, if the damage is already done and you have acquired bad credit, there is no need to lose hope. People often feel that their chances of getting a remortgage deal go down to zero in the case of bad credit. This is certainly not the case. Rest assured that it is possible to remortgage with bad credit by working with the right Remortgage brokers.

Remortgage for home improvement

There are many reasons why people choose to remortgage their properties, one of the most common being is home improvements. Home improvements can get quite expensive and demand a lot of money out. Especially if you have growing family extra space is always needed adding a loft or rear, side extension will give a lot more space. How should you remortgage for home improvements? The process of remortgaging for home improvements is the same as carrying out a regular remortgage. You need to get in touch with your mortgage broker for remortgage and additional funds application. If you are planning to switch to a new mortgage lender or stay with the same lender, you will have to give valid reasons to your borrowing application is successful.

What is offset mortgage

Offset mortgage is a type of mortgage where your savings or current bank account is linked with your mortgage account. Here, the money you saved is used to offset your mortgage repayments. This savings account linked to your mortgage account is referred to as the “offset account.” One of the biggest reasons why borrowers opt for an offset mortgage is that it helps them cut down the interest to be paid on their mortgage. When you get yourself an offset mortgage, the lender would deduct money in your savings account from your outstanding mortgage balance to give you a net balance. Then, the mortgage interest is charged on this net balance instead of the total outstanding mortgage balance. This reduces the mortgage interest and helps you save more money.

What is variable rate mortgage?

As opposed to a fixed-rate mortgage, a variable rate mortgage is where the interest rate keeps fluctuating over time. Here, your monthly mortgage repayments are not fixed and keep changing as the interest rate of your lender keeps changing. With variable mortgages your monthly payment can go down if the interest rates go down, you may end up paying more interest over time if the rates go up. Applicant should be prepared for both scenarios if thinking of variable rate mortgage deal.

What is a fixed rate mortgage?

As the name suggests, a fixed-rate mortgage is a type of mortgage where the rate of interest remains the same for a pre-decided period of time. This period is known as the fixed term of the mortgage. While many lenders offer fixed terms between 2,3 and 5 years, some mortgage lenders stretch it as long as 10 years or more. One of the biggest benefits of getting a fixed-rate mortgage is that your monthly repayments do not change even if the interest rate in the market (and of your lender) changes. This helps you plan your monthly budget better as there will be no unexpected rise in your mortgage payments. You can compare monthly mortgage payments to See how much you will pay per month on latest mortgage rates comparison

What is a buy to let remortgage?

As the name suggests, a buy-to-let remortgage is a process of remortgaging our buy-to-let property. It involves switching one buy-to-let mortgage deal with another, provided the new deal provides you with more benefits. You may choose to remortgage with the same lender or switch to a new lender based on your requirements. How does buy-to-let remortgage work? Buy-to-let remortgage is like any other conventional remortgage, the only difference being that the property here is a buy-to-let property. As long as you have the required deposit for the new mortgage (which is often higher than other mortgage deals and ranges from 20% to 40%) and meet all the eligibility criteria of the lender, you can go ahead with a buy-to-let remortgage.

Guide to Gifted Deposit

Deposits often play a decisive role in finalizing a borrower’s decision especially in the case of first-time buyers, mortgage down payments are often highly important and worrisome factors. Mortgage deposit gifts reduce this burden to a great extent, making the process of getting a mortgage a lot easier. If you are facing a financial crunch while getting a mortgage for your property, a mortgage deposit gift from your family members can be a great relief. On the other hand, if any of your family members need help in making the down payment, you can gift them a mortgage deposit. What is a gifted deposit?

What is a transfer of equity?

There are many ways of changing the legal ownership of your property without putting it up for sale in the market. You may want to add the name of your partner as a joint owner after getting married. You may want to give your children stakes in your property. You may want to completely transfer the ownership of your property without selling it off. Whatever the case is, you will need to go through the process of transfer of equity if you are willing to change the legal ownership of your property. Before understanding the transfer of equity, let us briefly understand what equity means.

Leasehold property guide

If you are planning to purchase a new property with a mortgage, it is important to consider the type of home ownership you want to go for. Property ownership involves two major forms of ownership – freehold and leasehold In simple words, freehold property where you own the property and land it on. Leasehold property is where you own the property you live but not a land. Factors worth considering with leasehold property

What is an EPC

In current times energy and power consumption means a lot to normal household. With increasing cost of gas and electric homeowners preferred properties which retain more energy as opposed to the ones that don’t. To showcase the efficiency of energy consumption by the houses, every house is issued an EPC rating. Let’s understand what EPC is and how does it affect us.

Buying a leasehold property

One of the most common ways of property purchase is a owning leasehold property. If you buying a property for the first time, it is important to seek help from mortgage brokers and advisors. A skilled and experienced mortgage broker would scan the whole market and get you the best first-time buyer mortgage deals based on your requirements and circumstances. If you are planning to own a leasehold property for the first time, here is a small yet informative guide to buying a leasehold property:

Leasehold Vs Freehold

Leasehold Vs Freehold: When it comes to owning a house, there are two major forms of ownership involved – freehold and leasehold. This determines the extent of your ownership of the house you live in. In other words, freehold and leasehold properties determine whether the property (and land) you live in is your own or if you have a landlord for the same.

Are you mortgage-ready ?

Are you mortgage ready ? Buying a new home is, in equal parts, exciting and full of responsibilities. If you are planning to get a mortgage for your new house, it is important to be patient, alert, and precise in your approach. Moreover, it is advisable to work with a skilled and experienced mortgage broker in your city. For example, if you are looking forward to buying a property in Harrow, make sure you hire the best mortgage broker Harrow has to offer based on your requirements.

What can stop you getting mortgage

Purchasing a property through a mortgage is a significant decision that requires careful consideration, especially if you are not a cash buyer. Most of us fund the property purchase via deposit and mortgage. But what can stop you from getting a mortgage? There are several considerations one should keep in mind before going ahead and making the application. As the market is highly in demand and growing property prices, it is advisable to work with a reliable, dedicated, and experienced local mortgage broker.

Facts About Mortgages

Getting a mortgage is always an important event in an individual’s life. It is, therefore, common for people to get excited and confused at the same time. Especially if you are getting a mortgage for the first time, it is always important to be familiar with the manner in which the process works. Moreover, is important to seek help from professional advisors. For example, if you are looking for a property in Hounslow, look for the best mortgage advisor Hounslow has to offer before taking any action.

Remortgage cost and saving

Remortgage can take few months. we have cover in this guide the cost and saving related to remortgage. It is good idea to shop around 3 -4 months in advance. Compare the mortgage deals and know the cost involve. In this guide we will look at, Remortgage cost. How much you save.

No Fees Mortgage Broker

If buying your first property or remortgaging to better rate MariannaFS offer fee free online mortgage service. What is mortgage broker? In simple words mortgage broker are who acts as middle person between lender and client. Mortgage broker can find and help you to choose right mortgage for your circumstances.

Agreement in principle

Mortgage in principle, Decision in principle or Agreement in principal. MIP, DIP or AIP. With the current market situation house prices are at its highest many estate agents wants to know if you are mortgage ready. Estate agents will ask you for mortgage in principle before submitting your offer. what is mortgage in principal? A mortgage in principle is preapproval of your mortgage from lender which tells you roughly how much you may able to borrow.

Remortgage guide

Your monthly mortgage repayments can be a substantial amount of your monthly income, so you should check for better deals from other lenders that will allow you to make lower repayments on better terms. Our expert mortgage brokers will find you the best remortgage deals for your special needs and seamlessly move you to your new mortgage deal best of all our services are free we do not charge broker fee.

Btl buyer guide

Finding the right buy-to-let mortgage can be a daunting task. Our trusted mortgage broker can quickly find you the most exclusive deals, provide prompt, worry-free services and do all the hard work for you. In this guide we cover, Buy to let Buy to let mortgage broker Cost of buy to let

Home mover guide

Whether you are moving to a bigger property or downgrading to smaller property, moving home can be a busy and stressful time — and mortgage is the first thing you will worry about. Our experienced advisors will find the best value home mover mortgage for your needs and seamlessly move your mortgage to your new property. so that you can relax and focus on turning your new house into a home.

First time buyer guide

Buying your first house is one of the most important purchases of your life and can be equally exciting and daunting. Our experienced first-time buyer mortgage advisor at MariannaFS can guide you through the process. Remember getting a mortgage secure is main part of the buying process. You should always look at the mortgage options and try to understand how the whole process works. So here is all you need to know about your first mortgage.

NHS mortgage

What is an NHS mortgage? NHS mortgage is not a standalone mortgage product. It refers to a situation wherein a mortgage deal is offered to an NHS employee. NHS employees often struggle with hospital rotations, inadequate incomes, salary band restrictions, short contracts, and other relevant issues. NHS mortgages are initiatives to make property purchases easier for these individuals.

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