Section A of the Remortgage Glossary

Adverse Credit

  • Referred to as bad credit. Describing Credit Problems due to a poor credit history. CCJ's, Remortgage Arrears and other debt repayment problems leads to Adverse Credit. Read More

APR

  • APR or Annual Percentage Rate refers to amount of interest you will pay over the term of the remortgage. So the higher the APR the more you will pay, the lower the APR, the less you pay.

Arrangement Fees

  • Lenders charge arrangement fees for organising your remortgage, the cost covers the work involved in arranging your remortgage. These fees are usually added to your mortgage.

Section B of the Remortgage Glossary

Base Rate

  • Every month the Monetary Policy Committee sets the Bank of England Base Rate, to which all mortgage rates are linked either directly, as Tracker Remortgages, or indirectly, in all other cases.

Bank of England

  • The central bank of the United Kingdom. The bank was established privately in 1694 and was nationalised by the British Parliament in 1946.

Section C of the Remortgage Glossary

Capped Rate Remortgages

  • The interest rate is set for few months to several years. Meaning that if the interest rose above the set limit you wouldn't pay any more with a Capped Rate remortgage. The lenders make their money by locking you into a capped rate mortgage for a minimum limited period, these types of remortgages may include a penalty clauses if you were to try to swap mortgages. Read More

Capital and Interest Remortgage

  • Otherwise called a repayment remortgage, where the monthly mortgage repayments to the lender covers the capital and the interest the lender charges you for borrowing the money. Read More

Cash Back Remortgages

  • When a remortgage lender offers cash back to the remortgage applicant. Read More.

CCJ or County Court Judgment

  • If a debt isn't satisfied a decision or judgment made in the County Court, normally for the non-payment of that debt will be registered on your credit file as a CCJ. If the debt is paid or satisfied and a satisfaction certificate obtained it will be noted on your credit file.

Conveyancing

  • The legal process involved in buying and selling property.

Section D of the Remortgage Glossary

Defaults

  • By defaulting on a loan or mortgage it means that a payment is more than 30 days behind the due repayment date. This will be marked on your credit record and would lead to a CCJ if no payment was received or received too late.

Deposit

  • The money put towards the purchase of a property. Most lenders will require at least 10% deposit of the purchasing price. However some lenders will lend 100% or more but only to Status Applications with no bad credit history.

Disbursements

  • These are the various conveyancing costs incurred during the mortgage process which can include Stamp Duty, Land Registry Fees, Local Searches etc. These fees are usually collected by your solicitor.

Discounted Rate Remortgage

  • The interest rate charged on a mortgage is at the variable base rate and applies to the mortgage, less a discount for a set period. Therefore the rate and monthly repayment will oscillate depending on the variable base rate changes. Read More.

Section E of the Remortgage Glossary

Early Redemption Fee

  • If pay off your remortgage early or want to changes lenders then you may be charged this fee. From a mortgage lenders perspective if they give you a package with benefits you must keep the mortgage with them for a minimum length of time so they may recapture the lost revenue. Some mortgages don't have any early redemption penalties. This charge is often associated with capped, fixed or cash-back remortgages.

Early Repayment Charge

  • This is a charge made by a lender if you pay off all or part of your mortgage before an agreed date. The Early Repayment Charges attached to a mortgage can be found within the terms and conditions of the lender's Mortgage Offer.

Exchange of contracts

  • This is the point where the person buying and the person selling a property sign and "exchange" contracts which show the agreed price of the property and what fixtures and fittings are included, as well as a date when everything is to be finalised. When the contracts are exchanged, the transaction becomes legally binding and if either party pulls out, compensation will be due to the other party.

Endowment

  • Endowment remortgages is a savings based mortgage. One aspect of your your repayment covers the interest only and the other is invested by the lender. These were designed to allow you to pay a smaller monthly premium. Read More.

Equity

  • The difference between the amount you owe on your current mortgage and the current market value of your property. This equity can be used to allow money for home improvements, a new car, holiday of a lifetime or reduce your monthly premiums, by remortgaging or seeking an Equity Release Remortgage.

Equity Release Remortgage

  • Equity release remortgages use the profit (positive capital) in the property to secure a monthly income or lump sum to the owner of the property without having to move out or sell the property. Read More.

Exchange of Contracts

  • The contracts are exchanged between the buyer's and seller's solicitors. Both parties are now legally bound to the sale and purchase of the properties.

Section F of the Remortgage Glossary

Financial Services Authority (FSA)

  • They are responsible for Authorising and Regulating companies within many business sectors, including the mortgage industry.

First Time Buyer

  • If you are buying your first property you are classed as a first time buyer. Read More.

Fixed Rate Remortgage

  • A fixed interest rate is set for an agreed period of time. If the base rate and interest rates increase the applicant doesn't pay a higher interest rate. However you don't pay any less if the interest rates go really low on a fixed rate mortgage. Read More.

Flexible Remortgage

  • This type of remortgage offers flexible repayments options, where one can overpay, underpay and take payment holidays. Read More.

Freehold

  • This is where the property and the land it stands on is owned.

Section G of the Remortgage Glossary

Gazumping

  • This is where the person selling a property accepts an offer on it from a prospective purchaser, but then accepts a better offer from someone else and lets down the original purchaser out of greed. Here the original purchaser has been gazumped.

Ground Rent

  • The amount of money that is paid for the use of land when title to a property is held as a leasehold estate.

Section H of the Remortgage Glossary

Higher Lending Charge

  • A one-off fee charged by some lenders where the LTV is more than 70%. The fee is used by the lender to buy insurance to protect itself in case your property has to be taken into possession and then sold for less that your outstanding mortgage debt. The insurance covers the lender, and not the borrower.

Section I of the Remortgage Glossary

Interest Only Remortgages

  • Interest only remortgages are were the borrower repays the interest accrued on the mortgage debt. At the end of the remortgage term the mortgage debt must be cleared in full. Read More.

Section J of the Remortgage Glossary

Joint Application

  • This is sometimes called a dual application; where more than one party joins forces to buy a property. By applying jointly you can increase the amount you borrow because both applicants credit history and earnings are taken in to consideration.

Section L of the Remortgage Glossary

Leasehold

  • This is where the property but not the land it stands on is owned by the borrower. With a leasehold property you pay a monthly rental payment to the person or company who owns the land, known as ground rent.

LIBOR Rate

  • This stands for London Inter Bank Offer Rate, and is the interest rate at which banks lend to each other. Where a lender uses LIBOR as its base lending rate it usually reviews the rate on a quarterly basis.

Licensed Conveyancer

  • Although these firms specialise in the legal side of buying and selling properties, they are not generally accepted by lenders as an alternative to using a solicitor.

Local Authority Search

  • When you buy a property the conveyance process is carried out by your conveyancer, usually a solicitor. This search is based on your local council's services may affect the property. Such as proposed road improvements, and details of any planning permission given for the property or nearby property.

Long Term Remortgages

  • Long term remortgages are simply remortgages with extended repayment periods, often from 30 to 50 years as opposed to the standard 25 year Remortgage repayment period. Read More.

LTV - Loan To Value

  • Describes the Loan to Value ratio. The size of the mortgage you require compared to the value of the property.

Section N of the Remortgage Glossary

Negative Equity

  • This means the value of your property is lower than the amount you owe on your mortgage or secured on it.

Section O of the Remortgage Glossary

Off Set Remortgages

  • Off set remortgages manage you mortgage using a several accounts. Where the credit balances in the current and savings accounts are offset against the mortgage balance and interest. Read More.

Section R of the Remortgage Glossary

Redemption Charges

  • These are the expenses charged by a lender for the general administration involved in closing your mortgage file. See Early Repayment Charges.

Remortgage

  • A remortgage is a new mortgage with a different lender. Read More.

Remittance Fee

This is a charge made by the lender for sending the mortgage funds to your solicitor in order for the mortgage transaction to be completed.

Remortgage Deed

  • The legal document establishing that you have a mortgage on your home or property.

Remortgage Term

  • The length of time in years which you take out to pay back your mortgage.

Repayment Remortgage

  • Sometimes called a Capital and Interest Remortgage. The monthly mortgage repayments to the lender cover the capital, the actual money borrowed as well as the interest the lender charges you for borrowing the money. Read More.

Right to Buy Remortgage

  • If you have lived in a Council Property for a number of years you may have the right to buy that property. Read More.

Section S of the Remortgage Glossary

Self Certification Remortgage

  • The lender relies on the applicant to certify their income and will generally not check to confirm this with an employer. If you are self employed and have less than 3 years accounts then you would need a Self Certification Mortgage. It is also called a Self Cert Mortgage and Self Certified Mortgage. Read More.

Self Employed Remortgage

  • Often being self employed can make it harder to get a remortgage. If you are lucky you could be certified with over 3 years accounts but if you have less than 3 years accounts then you are classed as Self Certified.

Shared Appreciation Remortgage

  • Shared appreciation remortgages offered a variety of benefits to the applicant in exchange for giving the lender a percentage share in the appreciation of property equal to the loan-to-value ratio. Read More.

Stamp Duty

  • A Government tax you have to pay on the purchase price of any property with a value of £100,000 or more.

Section T of the Remortgage Glossary

Tenure

  • This refers to the type of ownership of a property and the land its on ie. Leasehold or Freehold (feuhold in Scotland).

Tie-In Period

  • If you have a special mortgage deal such as a fixed or discounted rate, you may have to agree to stay with the lender for a period of time after the special deal has ended. Moving your mortgage within this period can incur early redemption penalties.

Title Deeds

  • The set of official documents which confirm the ownership of a property.

Tracker Remortgages

  • Tracker remortgages follow the base rate set by the Bank of England. Therefore as the base rates fluctuates with market trends so will the interest applied to the mortgage debt. Read More.

Transfer Deed

  • The legal document used when there is to be a partial change in ownership of a property, for example where someone is being added to or removed from the Title Deeds of the property.

Section V of the Remortgage Glossary

Valuation Report

  • Lenders can arrange a valuation to find out the value of the property you require. They will ascertain if the agreed asking price is above or below the market value and typically lend on the lowest of the two figures.

Variable Rate Remortgage

  • A variable interest remortgage means that the interest charged, fluctuates depending on current market conditions. Read More.

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