Jargon Buster
A
AIP (Agreement in Principle)
Before falling in love with a property you need to know if you can buy it. This is the credit check and as much confirmation as you can get, prior to a full mortgage application, that a lender will lend to you and how much, based on basic checks.
Also known as a Decision in Principle (DIP).
AML (Anti-Money Laundering)
AML (Anti-Money Laundering) is critically important in the house buying/mortgage process because it helps prevent criminals from using property transactions to disguise illegal funds.
APRC (Annual Percentage Rate of Charge)
A figure showing the total cost of the mortgage over the term, including fees and interest, expressed as a percentage.
As lenders calculate APRC in the same way it is a useful way for borrowers to make comparisons.
Additional Borrowing
Also known as Capital Raising, this is taking out more money from your mortgage lender, on top of your existing mortgage.
Funds can be raised for some reasons such as home improvements or debt consolidation and not for other reasons such as a cash injection into a business.
Advance
Another name for the mortgage.
Adverse Credit (Bad Credit)
This refers to the credit history of an applicant.
Everything we do financially is tracked by the credit reference agencies, good and bad. Late or missed payments on credit commitments (loans, credit cards or other regular payments) will affect whether you can borrow and if so, the interest rate you will pay and the deposit you will need.
In order of severity, we have:
In most cases, these will all stay on your record for six years.
Affordability Assessment
The lenders each have their own criteria for determining how much they are willing to lend considering deposit, the loan term, and your disposable income.
In some cases, the lenders may lend a little more if required, but you need to look at what the monthly payments will be not just now, but if interest rates were to increase again.
The reasons why a lender would be prepared to lend more would usually involve large deposits and/or a good track record of borrowing.
Agent
This is the Estate Agent you are buying/selling through.
Application Fee
An upfront charge that some lenders or brokers require you to pay when you apply for a mortgage. It covers the administrative costs of processing your application.
Appointed Representative (AR)
An Appointed Representative is a broker or firm that operates under the regulatory supervision of a larger, FCA-authorised company known as a Principal. This structure allows the AR to offer regulated mortgage and protection advice without needing direct authorisation from the Financial Conduct Authority. Key benefits include access to a wide panel of lenders, exclusive mortgage products, and built-in compliance, training, and administrative support.
In short, it enables brokers to focus on serving clients while the network handles regulatory oversight and operational systems.
Arrangement Fee
This is a lender ‘set up fee' which can often be added to the mortgage rather than pay in one go.
The larger the fee, the lower the interest you will be offered, and vice versa.
On a smaller mortgage (less than £120000) you would usually be better off paying a higher rate and no arrangement fee.
Arrears
Missed mortgage payments. Being in arrears may affect your credit rating and mortgage options.
Auction
This is where interested buyers bid against each other to determine the final sale price.
This method is often chosen for its potential for a quick sale as ‘exchange of contracts' happens when the hammer goes down with the winning bid and you must complete within 28 days to avoid penalties. A 10% deposit is usually required on the day.
As a buyer you must do all your due diligence before the auction begins. Many properties are sold at Auction that are ‘un-mortgageable' due to construction or condition issues.
B
BACS Transfer Fee
Similar to a CHAPS fee, a fee associated with making a payment through the Bankers' Automated Clearing Services (Bacs) transferring the mortgage funds to the borrower/solicitor.
BTL (Buy-to-Let)
A product designed for properties that are to be rented out to tenants.
The interest rate on these products are generally higher because the ‘risk' profile for the lender is generally higher. These types of loans typically have a higher rate of arrears.
Balance Outstanding
This refers to the total current balance of a mortgage.
Bank of England Base Rate (BBR)
The Bank of England base rate, also known as Bank Rate, is the interest rate at which the Bank of England lends money to commercial banks. It acts as a benchmark for interest rates across the UK economy, influencing the cost of borrowing for individuals and businesses as well as savings rates.
Changes in the Base Rate usually affect the mortgage interest rates that you and I pay.
Bankruptcy
Bankruptcy is a legal process that allows individuals who cannot repay their debts to obtain relief and make a fresh start. It involves a formal declaration of insolvency, where a person's assets are used to pay off creditors, and most remaining debts are then written off.
The process is overseen by the Insolvency Service in the UK and can provide a way to deal with overwhelming debt.
Booking Fee
This is usually a fee charged by a mortgage lender to secure the interest rate you have chosen.
Bridging Loan
This is a short-term loan that provides temporary financing to ‘bridge the gap' between the purchase of a new property and the sale of their existing property.
Broker (Mortgage Broker)
Another term for Mortgage Adviser.
Our role is to guide you through every stage of the home-buying and remortgaging process — offering clear advice tailored to your needs. Whether you are a first-time buyer, first time mover, experiences mover or just looking to remortgage.
We will help you navigate the market, compare options, and then secure the most suitable mortgage deal based upon your circumstances, explain everything straightforwardly.
Our role is not just to recommend a mortgage - it's to make the whole process from now, as easy, stress-free and as personal as possible.
Broker Fee
We won't say this is the most important thing that you will pay for, but it is our fee that you pay for our services.
Building Regulation (Building Regs)
Building regulations are a set of standards for the design and construction of buildings, ensuring they are safe, healthy, and energy-efficient. They cover aspects like structural integrity, fire safety, accessibility, and energy performance. These regulations are legally required for most building work in England and Wales, including new builds, extensions, and renovations.
Building Society
A building society is a financial institution owned by its members, rather than shareholders, like banks. It functions as a mutual organization, meaning its members, who are also its customers (savers and borrowers), have a say in how it's run and benefit from its profits.
Building Survey
A comprehensive inspection of a property. This would be carried out by a qualified surveyor (i.e. RICS qualified) to assess its condition and identify any defects and/or issues.
Buildings Insurance
Covers the structure of your home; often a condition of the mortgage.
Buy-to-Let Limited Company
Due to numerous tax changes since 2016 the traditional set up for landlords might not be ideal for you.
Setting up a limited company, especially if this is your first property may be the best way to go forward, please contact us for more details.
C
CCJ (County Court Judgement)
A court order issued upon failure to repay a debt.
If this is still showing up on your credit history, it will have an impact on your mortgage options. After 6 years it will come off your record completely, but that does not necessarily you can't get a mortgage – contact us for more details.
Important note - If a CCJ is paid in full within 30 days of the judgment date, it can be removed from the Register of Judgments, Orders, and Fines.
Capital
The amount you borrow (excluding interest). Also known as the principal loan.
Capital Raising
Also known as Additional Borrowing, this is taking out more money from your mortgage lender, on top of your existing mortgage.
Funds can be raised for some reasons such as home improvements or debt consolidation and not for other reasons such as a cash injection into a business.
Capital and Interest Mortgage
A repayment method whereby your payments contribute partly towards the mortgage debt (the capital) and the interest charged by the lender. This is also referred to as a ‘repayment mortgage'.
Capped Rate
A variable rate mortgage that has a fixed upper rate limit, known as a ‘cap' or ‘ceiling'.
Cashback Mortgage
Where a mortgage lender offers a cash lump sum, which is paid to you when you complete.
Chain
Also know as a property chain or house chain. It is a series of linked property transactions where each buyer's purchase is dependent on the sale of their property to the next buyer in the chain.
At the start of each chain is someone who does not need to sell, such as a ‘first time buyer' or investor. At the top of the chain is somebody who does not need to buy, which could be somebody moving abroad or going into an old people's home.
Generally, the longer the chain the longer the house moving process will take.
CBTL (Consumer Buy-to-Let)
This is a type of buy-to-let mortgage specifically for individuals who become landlords without initially intending to rent out the property. This often happens when someone inherits a property, moves out of their home, or otherwise acquires a property without the original purpose of renting it out.
CBTL mortgages are regulated by the Financial Conduct Authority (FCA) in the same way as residential mortgages, offering additional protection for the borrower.
CHAPS Fee
A CHAPS (Clearing House Automated Payment System) fee is a charge levied by banks for processing a same-day, high-value electronic transfer of funds within the UK.
These fees typically range from £25 to £30, according to payment processing services. CHAPS is often used for time-sensitive transactions like house purchases or large business payments.
Charge (on a property)
A legal interest in a property, such as a mortgage or other form of secured loan.
Closed Bids
Closed bids, also known as sealed bids, involve buyers submitting their highest offers in a confidential manner, typically in sealed envelopes, by a set deadline. The seller then reviews all bids at once without knowing the other offers, aiming to select the best one. This process is often used when a property attracts significant interest, creating a competitive environment like a blind auction.
Commercial Mortgage
A type of mortgage which is designed to finance commercial properties (rather than residential properties), such as offices, retail spaces, industrial premises etc.
Completion
The final step when funds are transferred, and you become the legal owner of the property.
Usually this will be moving day!
Contents Insurance
A policy that covers your personal possessions against loss or damage, due to events such as theft, fire or flooding.
Contract
This is the legally binding agreement between the buyer and seller, solidifying the terms of the property sale.
It will specifically contain the agreed sale price and any fixture and fittings and other agreed items that will be remaining in the property after completion.
Conveyancer
A conveyancer is a person who specifically deals with property transactions.
A conveyancer does not need to be a fully qualified solicitor, although often they are, but they must have achieved a Level 4 Diploma and Level 6 Diploma in Conveyancing Law and Practice.
Conveyancing
The legal process involved in the transfer of property ownership from one person to another.
Covenant
A legal restriction or agreement that is included in the property's title deeds or lease, outlining certain obligations or restrictions for the property owner or occupier.
Credit Check
The process where a lender or service provider assesses your creditworthiness by reviewing your credit history and financial behavior. This helps them determine the risk associated with lending you money or providing you with services.
Credit checks are typically conducted when you apply for credit, such as loans, credit cards, or mortgages, but also by utility companies, landlords, and even some employers.
You can find out who has credit checked you by getting hold of your credit report from someone like Experian or Equifax.
Credit Report
Everything we do financially, good and bad, is being tracked in cyberspace. Credit reference agencies pull this information together on behalf of the lenders.
Your credit report (the information they know about you) is available from each one if you contact them, but most people use only one of Experian, Equifax or Call Credit. They do tend to hold slightly different information, but in most cases one will suffice.
Credit Reference Agency
A company that will hold credit history information of an individual. Mortgage lenders will typically use these credit reference agencies to obtain data when determining creditworthiness of an applicant.
By becoming a member of the credit reference agency they will usually assist you in being able to improve your credit score.
Credit Score
A number based on your credit history used by lenders to assess your risk level.
Critical Illness Insurance
Critical illness insurance provides a lump-sum payment upon diagnosis of a serious, specified illness or disability covered by the policy. This financial support can help cover expenses like medical bills, mortgage payments, or lifestyle adjustments during recovery. It's distinct from life insurance, as critical illness insurance pays out while the policyholder is still alive.
D
DIP (Decision in Principle)
Also known as an Agreement in Principle (AIP).
Before falling in love with a property you need to know if you can buy it. This is the credit check and as much confirmation as you can get, prior to a full mortgage application, that a lender will lend to you and how much, based on basic checks.
DTI (Debt to income)
Your debt-to-income ratio is the percentage of your monthly income that goes towards repaying debts.
Lenders use your DTI to check if you can comfortably afford a mortgage. A lower percentage usually means you're more likely to get approved, as it shows you have more income left over each month after paying debts.
Date of Entry
The date that ownership of a property is transferred. This relates to property purchases in Scotland. Essentially this is the equivalent of a completion date in other parts of the UK.
Debt Consolidation
When an individual wants to combine multiple debts into a single loan.
Transferring unsecured debt (like credit cards/personal loans) to your mortgage, which is secured on your home, might seem attractive due to lower interest rates and lower monthly payments, however it carries significant risks and potential consequences.
Deed of Trust (Declaration of Trust)
A Deed of Trust is a legal document used when two or more people buy a property together, especially if they are contributing unequal amounts to the purchase. It clearly sets out:
It is commonly used by unmarried couples, friends, or family members buying together to protect each party's financial interest.
Deed of Variation
A Deed of Variation is a legal document that allows changes to be made to an existing legal agreement - most commonly a lease or a trust.
We are seeing a lot these at the moment is regard to service charges or property maintenance contracts.
Deeds
Property deeds are the legal documents that prove ownership of a property and outline important details such as:
Since 1995, most properties are now recorded digitally with the Land Registry, but the original paper deeds may still be useful for historical reference, especially for older or unregistered properties.
Deed Sealing Fee
A fee paid to the lender for them to remove their charge over the property and confirm the mortgage is officially closed.
Default
A loan default happens when a borrower fails to repay their loan as agreed - usually by missing several payments or completely stopping repayment.
This will usually show on your credit report as a ‘status 8'.
Deposit
The upfront amount you pay towards the cost of the property. Typically 5%–25%.
The bigger the deposit, the lower the interest rate you will be offered. A bigger deposit also increases the likelihood the loan will be approved.
Developer
A property developer is a company or individual that buys land and builds new homes, commercial buildings, or refurbishes existing properties for sale or rent.
In our context it usually refers to Companies that are building new homes.
Direct Debit Mandate
An instruction from a person to arrange regular, automatic payments to be made from their account. This arrangement is typically used for making mortgage repayments.
Directly Authorised
A Directly Authorised mortgage broker is a firm or individual who is authorised and regulated directly by the Financial Conduct Authority (FCA) to give mortgage and insurance advice.
They are fully responsible for their own, compliance within FCA rules, file checking, training, data protection and regulatory reporting.
Disbursements
In relation to property purchases, disbursements refer to costs and expenses incurred as part of the legal work.
Discharge
This refers to the process of paying off a mortgage in full and officially removing the lender's legal charge from the property.
Discounted Rate Mortgage
A mortgage where the interest rate is lower than the lender's standard variable rate (SVR) for a set period.
Discretionary Purchase
The property purchase is solely for the applicant(s) to live in as their main residence and the applicant is:
Purchasing from an immediate family member or partner/ex-partner at a discounted price. Usually, the vendor must not be living in the property following completion.
OR
A sitting tenant purchasing from their landlord at a discounted price.
The difference between the full market value and the discounted price will be classed as the deposit.
Down Valuation
A down valuation occurs when a mortgage lender's surveyor values a property at less than the agreed purchase price.
It matters because The lender will only lend based on the lower value, not the sale price.
You may need to:
Dual representation
Dual representation is when the same solicitor or conveyancer acts for both the buyer and the mortgage lender during a property purchase.
E
EPC (Energy Performance Certificate)
A document that provides information about a property's energy efficiency. This is required when selling or renting out a property.
ERC (Early Repayment Charge)
A fee you may pay if you repay your mortgage early or switch before your deal ends.
ESIS (European Standardised Information Sheet)
This used to be known as a Key Features Illustration (KFI) or Mortgage Illustration.
This is a legal document that you must receive before you start your application for a mortgage. It sets out the key details of the mortgage offer in a consistent format, designed by the regulator to make it easier for you to compare products across lenders. It will include:
Whether the mortgage is portable, and how long the offer is valid
EWS1 Form
This stands for External Wall Fire Review, and is used to assess the fire safety of high rise properties.
Easement
A legal right over land, for example the right to access a specified area of land, such as a right of way.
Equity
The difference between your property's value and what you still owe on the mortgage.
Equity Release
A product available to older homeowners to allow them to release equity (cash) without having to sell their property.
Estate Agent
An estate agent is a professional who helps people sell, buy, or let property. They act as the middleperson between the buyer and the seller, working to market the property, arrange viewings, and negotiate offers.
Exchange of Contracts
When both parties sign the legal contract, it is only at this stage that the sale is legally binding.
A deposit is usually paid at this stage.
Exit Fee
Also known as Deed Sealing Fee. A fee paid to the lender for them to remove their charge over the property and confirm the mortgage is officially closed.
F
FCA (Financial Conduct Authority)
The UK regulatory body that oversees the conduct of financial firms to ensure markets work well for individuals, businesses, and the economy.
Family Purchase
The property purchase is solely for the applicant(s) to live in as their main residence and the applicant is purchasing from an immediate family member or partner/ex-partner at a discounted price. Usually, the vendor must not be living in the property following completion.
The difference between the full market value and the discounted price will be classed as the deposit.
Financial Ombudsman Service
The Financial Ombudsman Service (FOS) is an independent, free service that helps resolve disputes between consumers and financial businesses, such as banks, insurers, mortgage lenders, and brokers.
Financial Services Compensation Scheme
The Financial Services Compensation Scheme (FSCS) is a government-backed scheme that protects your money if a financial company fails (goes bust).
If a bank, building society, insurer, or mortgage provider can't pay what it owes you, the FSCS can compensate you up to certain limits.
In our terms it would apply if we had given bad advice and we were no longer in business.
First Homes Scheme
A Government initiative to help first time buyers onto the property ladder. It offers discounted properties to eligible buyers.
Local councils may impose criteria such as local connections or key worker status.
First Time Buyer
A person who is purchasing a property for the first time, anywhere worldwide.
Fixed Rate Mortgage
A mortgage product where the interest rate is fixed for a period, meaning your monthly payments won't change.
Typically ranging from 2 to 10 years.
Fixtures and Fittings
Items that are permanently fitted to a property. This may include built-in appliances, light fixtures, and bathroom fixtures. These items will usually be included in the sale of the property unless otherwise stated.
Flexible Mortgage
A flexible mortgage is a type of mortgage that could allow you to make over-payments, underpayments and sometimes payment holidays to suit your financial situation.
Freehold
You own the property and the land it sits on.
Full Mortgage Application
A Full Mortgage Application is the stage where you officially apply for a mortgage with a lender. It is the point where the lender carries out a detailed assessment of your finances, credit, and the property to decide whether to offer you a mortgage.
You would normally need to supply your latest:
Full Structural Survey
A detailed inspection of a property. This will detail the main features of the property, including the foundations, walls, roof, and other elements.
Full and Final Offer
A full and final offer is when there is a lot of interest in a property, you might be asked to make your best and final bid for a property, with the intention that no further negotiation will take place.
Further Advance
An additional loan that a property owner applies for with their existing lender. The further advance may have its own terms, interest rate, and repayment schedule.
G
Gazumping
When the seller accepts a higher offer from another buyer after previously agreeing to sell to you.
Gazundering
When a buyer lowers their offer just before contracts are exchanged.
General Insurance
This is a broad category of insurance policies that cover non-life risks, such as property, possessions, and personal liability. In the context of buying a home, it typically includes Buildings & Contents Insurance and Accident, Sickness & Unemployment Insurance.
Gifted Deposit
A deposit contribution given by a family member or other party, with no expectation of repayment.
Ground Rent
Ground rent only applies to leasehold properties — often flats or some houses where the land is not owned by the buyer.
This is typically paid annually.
IMPORTANT - Some ground rent clauses can increase sharply over time, which may affect your ability to sell or remortgage the property.
Guarantor
A guarantor is someone who agrees (guarantees) to take responsibility in paying the mortgage for the primary borrower if they can't or won't keep up with the repayments.
H
HLC (Higher Lending Charge)
This used to be known as Mortgage Indemnity Insurance or Mortgage Indemnity Guarantee (MIG).
A small deposit on a purchase represents high risk for the lender as there is an increased chance they will lose money if you don't make your repayments. The lender may set up an insurance policy to protect themselves, but this will not protect you as the borrower.
Should you be in the unfortunate position where you are repossessed and there is a loss, you will still be liable for the loss.
The good news is most lenders no longer charge for this, especially for standard residential mortgages, however, it still exists with some specialist or high-risk lending.
HMO (House of multiple occupation)
This refers to a property that is rented out to multiple tenants who are not part of the same household. HMOs usually have shared facilities, such as kitchens or bathrooms.
Hard Search / Hard Credit Check
A hard search is when a lender takes a full look at your credit report (and score). This type of credit check leaves a mark on your credit report, so whenever prospective lenders look at your credit report they can see you applied for credit (and whether you were accepted). Most hard searches stay on your report for 12 months (though a debt collection is visible for a period of 2 years).
Help to Buy
Help to Buy relates to various government-backed schemes designed to help first-time buyers get onto the property ladder. One example is the equity loan, which is a loan of up to a specified percentage which is interest free for the first 5 years.
Help to Buy ISA
A Help to Buy ISA is designed to help people save to purchase their first home. The government provides a bonus on the savings deposited into the account, which would be paid on completion.
Homebuyer's Report
Often referred to as a level 2 survey, it is intended to give you a clear picture of a home's condition and value before you commit to buying it. It's more detailed than a basic mortgage valuation, but less comprehensive than a full structural (building) survey, this is suitable for buyers who want more reassurance than a basic valuation, but don't need a full structural survey
It includes:
I
ICR (Interest Coverage Ratio)
The Interest Coverage Ratio (ICR) is a key measure used by lenders for buy-to-let mortgages to assess whether the rental income from a property is enough to cover the mortgage interest payments.
IDD (Initial Disclosure Document)
This has been outdated term, it now a ‘Terms of Business'.
This is a regulatory document that a mortgage advisor or financial firm must give you at the start of your advice process. It sets out important information about their services, so you know exactly what to expect, including:
IVA (Individual Voluntary Arrangement)
This is a legal arrangement made between a person and their creditors (people they owe money to) to pay the money owed over a specified amount of time. This can help reduce the monthly commitment. An IVA is an alternative to bankruptcy.
Illustration
Now called an ESIS (European Standardised Information Sheet)
This is a legal document that you must receive before you start your application for a mortgage. It sets out the key details of the mortgage offer in a consistent format, designed by the regulator to make it easier for you to compare products across lenders. It will include:
Whether the mortgage is portable, and how long the offer is valid
Income Protection
An insurance policy replacing lost income due to sickness or accident, helping ensure you can cover your mortgage repayments even if you can't work.
Interest
Interest on a mortgage is the cost you pay to borrow money from a lender to buy a home. It's how the lender makes money on the loan.
Interest Rate
The cost of borrowing the money, usually shown as a percentage.
Interest-Only Mortgage
An interest-only mortgage is a type of home loan where you only pay the interest each month - not the loan amount (capital) itself. This means your monthly payments are lower, but the full loan amount must be repaid at the end of the mortgage term.
Most lenders will only consider this type of mortgage if you have a credible repayment plan in place, significant income and equity within the property.
Intermediary
In relation to a mortgage, an intermediary is simply another term used for a mortgage adviser or mortgage broker.
J
JBSP (Joint Borrower Sole Proprietor)
A mortgage setup allowing multiple people to contribute to the loan without sharing property ownership. Often used by parents helping children buy a home or children helping their parents.
As a non-owner of the new property in this case you won't be liable for second home stamp duty.
Japanese Knotweed
Japanese Knotweed is an invasive plant that can cause significant damage to properties. It can cause issues with the marketability of a property, and treatment plans can be expensive.
Joint Mortgage
A mortgage taken out with another person, where both incomes are considered.
Joint Tenants
A type of legal ownership when buying a property. Each person is jointly and severally liable to repay the mortgage loan to the lender. If one joint tenant passes away, their share is automatically transferred to the surviving joint tenants.
K
KFI (Key facts illustration)
Now called an ESIS (European Standardised Information Sheet).
This is a legal document that you must receive before you start your application for a mortgage. It sets out the key details of the mortgage offer in a consistent format, designed by the regulator to make it easier for you to compare products across lenders. It will include:
Whether the mortgage is portable, and how long the offer is valid
L
LTB (Let-to-Buy)
When a person owns their current home that they live in, and they now wish to rent this out. A let to buy is the process of converting the current residential mortgage to a buy to let mortgage.
A new residential mortgage may then be taken out for the new purchase. Funds may be raised against the existing property to contribute towards the deposit for the new purchase.
Borrowers will need to meet the criteria to complete this type of transaction and should seek tax advice with regards to income tax on the rental income and capital gains tax when selling the property.
LTI (Loan-to-Income)
It's how many times your income you're borrowing.
Most lenders will only lend up to a certain multiple of your income (e.g. 4.5x or 5x) to make sure the mortgage is affordable in the long run.
LTV (Loan-to-value)
This is the value of the mortgage amount in relation to the property value, expressed as a percentage.
If you're buying a property for £500,000 and need a loan amount of £450,000, the loan to value would be 90%.
This is worked out by dividing the loan amount by the purchase price, and multiplying this figure by 100 ((450,000 / 500,000) x 100).
Land Registry
A government agency that is responsible for holding and maintaining records of all registered properties in England and Wales.
Land Registry Fee
This is a fee you pay to Land Registry when purchasing a property or changing mortgage lenders, which covers the administration involved in updating their records.
Last and Final Offer
Last and final offer is when there is a lot of interest in a property, you might be asked to make your best and final bid for a property, with the intention that no further negotiation will take place.
Leasehold
When a person has ownership of a property, but not the land it stands on. The leaseholder will typically pay a ground rent, and may also be responsible for other charges and obligations outlined in the lease.
Lender
A lender is a bank, building society, or financial institution that provides the money you borrow to buy or remortgage a property.
Life Insurance
Insurance which pays out on the death of the policy holder. Policies can run alongside your mortgage and will pay off all or part of the outstanding debt in the event of your death.
Lifetime Mortgage
Lifetime mortgages are a type of equity release scheme designed for older homeowners, which allows them to access equity (cash) built up in the property. No repayments are taken during the mortgage period.
The loan is typically repaid, with interest, when the homeowner sells the property, moves into long-term care, or passes away.
Limited Company Buy-to-Let
Due to numerous tax changes since 2016 the traditional set up for landlords might not be ideal for you.
Setting up a limited company, especially if this is your first property may be the best way to go forward, please contact us for more details.
Local Authority Search
A search carried out during the conveyancing process that checks for local planning, building control, and highways information affecting the property.
M
MIG (Mortgage Indemnity Insurance)
Now known as High Lending Charge (HLC).
A small deposit on a purchase represents high risk for the lender as there is an increased chance they will lose money if you don't make your repayments. The lender may set up an insurance policy to protect themselves, but this will not protect you as the borrower.
Should you be in the unfortunate position where you are repossessed and there is a loss, you will still be liable for the loss.
The good news is most lenders no longer charge for this, especially for standard residential mortgages, however, it still exists with some specialist or high-risk lending.
MPPI (Mortgage Payment Protection Insurance)
An insurance policy that can cover your monthly mortgage payments if you are unable to work due to accident or illness, sometimes you may be able to include redundancy.
Market Value
The estimated worth of a property, typically valued by an estate agent.
Memorandum of Sale
A Memorandum of Sale is a document issued by the estate agent once a property sale has been agreed between the buyer and seller once an offer is accepted. It includes:
This document should be provided to you and both solicitors as a way of confirming the sale and each other's details.
Modern Auction
Mostly our advice is to avoid these if you are a buyer, especially if you only have a small deposit.
Main difference between this and a normal purchase is the you, as the buyer, are required to pay the estate agency fee and this is typically paid as soon as you know you are the successful bidder.
This fee is usually non-refundable, and is not part of your deposit.
You will need to complete the purchase within a certain period dictated by the agent on the property details.
Because these sale methods are unpopular, often you may be able to buy this type of property with less competition and therefore at a lower price which could soften the blow of the upfront reservation fee.
Monthly Repayment
The amount that a mortgage borrower will be committed to pay each month on their mortgage.
Mortgage
A mortgage is a loan you take out to buy property or land. It's a secured loan, meaning the property acts as security, if you don't keep up the repayments your lender has the right to repossess the property.
Mortgage Application Fees
Charges that borrowers may need to pay when applying for a mortgage. These fees cover the administrative costs associated with processing the mortgage application.
Mortgage Broker
This is another term used for a mortgage adviser.
Mortgage Deed
This is the legal document that formalises the agreement between you (the borrower) and the mortgage lender.
You are signing to say you understand the terms and conditions of the mortgage being provided and you give the lender the legal right to your property as security for the loan.
Mortgage Illustration
Now called an ESIS (European Standardised Information Sheet), formally known as a Key Facts Illustration (KFI).
This is a legal document that you must receive before you start your application for a mortgage. It sets out the key details of the mortgage offer in a consistent format, designed by the regulator to make it easier for you to compare products across lenders. It will include:
Whether the mortgage is portable, and how long the offer is valid
Mortgage in Principle
Also known as an Agreement in Principle (AIP) and Decision in Principle (DIP).
Before falling in love with a property you need to know if you can buy it. This is the credit check and as much confirmation as you can get, prior to a full mortgage application, that a lender will lend to you and how much, based on basic checks.
Mortgage Lender
A mortgage lender is a financial institution that provides funds to people who want to buy a property.
Mortgage Offer
A formal document from a lender agreeing to provide a loan, subject to certain conditions.
Mortgage Protection Insurance
Mortgage protection refers to insurance policies designed to provide financial protection for borrowers and their family. Examples may be life insurance, income protection, critical illness cover and family income benefit.
Mortgage Term
A mortgage term is the length of time that a mortgage runs for, such as 25 years.
Multi Agency
Multi-agency refers to a type of agreement where a property seller instructs two or more estate agents to market and sell their property at the same time.
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NHBC Warranty
A National House Building Council (NHBC) warranty provides cover against major structural defects for 10 years for new build residential properties.
Negative Equity
This occurs where the value of a property falls below the amount outstanding on the mortgage. If a property is sold when in negative equity, money will still be owed to the mortgage lender.
New Build
This typically refers to properties that have been recently built but not yet occupied. Some lenders may also include newly converted or refurbished properties.
New Build Developer
A new build developer will buy land and obtain the necessary planning permissions in order to build properties and sell these on.
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Offer (on a property)
When you have found ‘the' one, you need to ‘make an offer' – first off, it is important to only speak to ‘your contact' in the agency.
The reason for this is because should your offer being successful, they will receive a commission and therefore have a vested interest. If this person is not available, try to speak to the branch manager as they will be the person likely to talk to the Vendor about your offer.
It is okay to feel nervous, but remember this is just part of the process and people all over the country are making offers every day.
Offset Mortgage
An offset mortgage allows you to have a linked bank account with the same provider that the mortgage is with, which can be utilised to lower the overall interest charged on your mortgage.
Ombudsman
An independent and impartial authority that helps resolve disputes between consumers and companies, such as the Financial Ombudsman or Property Ombudsman.
Open Banking
Open Banking is a secure way for you to share your financial data (like income, spending, and account history) with authorised third parties, such as mortgage brokers, lenders, or budgeting apps — with your permission.​
Overpayment
Overpayments, in relation to mortgages, are additional payments over and above your committed monthly payment.
Regular overpayments will reduce the length of your mortgage.
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Payday Loan
A payday loan is a short-term, high-cost loan designed to give people quick access to small amounts of money — usually to tide them over until their next payday. a mortgage.
Mortgage lenders do not like these because they believe that you should be able to manage your money better without having to resort to very expensive short-term loans. As a result, many lenders will not lend if you have had a payday loan within the last 12 months.
Payment Holiday
A temporary break from making monthly mortgage payments, which is previously agreed between the borrower and the mortgage lender.
Planning Permission
Official consent from the local planning authority for a proposed construction, renovation or change in land use.
Portfolio
A portfolio refers to a collection of rental properties owned by a single landlord or investor.
A portfolio landlord is someone who owns four or more mortgaged buy-to-let properties in the UK.
Stricter criteria apply for portfolio landlords when applying for new buy-to-let mortgages. Lenders will typically ask for:
Porting
This is where you transfer your existing mortgage with its terms and conditions to a new property without paying the early redemption charge (ERC).
This will be treated like any other application, to ensure you and the new property still fit their criteria.
If they are not prepared to lend at this time, and you still want to move, you will have to pay the ERC.
Principal
In mortgage terms, the principal is the original amount of money you borrow from the lender to buy your home — not including interest.
Private Sale
Buying or selling a property without the use of an estate agent.
Procurement Fee
A procurement fee (proc fee) is a commission paid by a mortgage lender to a mortgage broker (or intermediary) when a mortgage application is successfully completed through them.
Product Fee
A fee charged by some mortgage lenders when you apply for a specific mortgage product or deal.
Property Chain
A property chain, also known as a house chain. It is a series of linked property transactions where each buyer's purchase is dependent on the sale of their property to the next buyer in the chain.
At the start of each chain is someone who does not need to sell, such as a ‘first time buyer' or investor. At the top of the chain is somebody who does not need to buy, which could be somebody moving abroad or going into an old people's home.
Generally, the longer the chain the longer the house moving process will take.
PT (Product Transfer)
Switching to a new mortgage deal – Staying with your existing lender.
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RTB (Right to Buy)
A government initiative that helps eligible tenants, renting through the local council, to purchase the property they're renting at a discounted price.
Rebuild Cost (Reinstatement Cost)
This is the estimated cost to rebuild a particular property. It is the minimum amount that properties should be insured for in a buildings insurance policy.
Redemption
Redeeming a mortgage means paying off a mortgage in full.
Redemption Figure
This would be the total amount to repay your loan in full, on a certain day, including all admin costs and if applicable early redemption charges. There will be a calculation showing a daily interest charge so you can calculate a few days either side of the date.
Remortgage
Switching to a new mortgage deal – usually with a new lender.
Repayment Mortgage
You pay interest and some of the capital each month until it's fully paid off.
Retention
A retention refers to circumstances where a mortgage lender will hold back a specific amount of money until certain conditions are met.
Reversion Rate
The reversion rate is the standard interest rate or standard variable rate (SVR) a mortgage automatically switches to after your initial deal (such as a fixed or tracker rate) comes to an end.
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SDLT (Stamp Duty Land Tax)
A government tax on property purchases over a certain value. The higher the purchase price the higher the amount you will pay.
STC (Subject to contract)
A common term used by estate agents, it indicates that a sale is agreed but is not yet legally binding.
SVR (Standard Variable Rate)
The Standard Variable Rate (SVR) is a default interest rate set by a mortgage lender. It's what your mortgage usually moves to after your initial deal ends, such as a fixed or tracker rate.
Sealed Bids
Sealed bids, also known as closed bids, involve buyers submitting their highest offers in a confidential manner, typically in sealed envelopes, by a set deadline. The seller then reviews all bids at once without knowing the other offers, aiming to select the best one. This process is often used when a property attracts significant interest, creating a competitive environment like a blind auction.
Searches
The conveyancer will carry out various searches and enquiries to gather information about a property.
Local Authority Search - Looks for planning issues, building regulations, nearby road schemes, and enforcement notices.
Environmental Search - Checks for flood risk, contaminated land, and other environmental hazards.
Water & Drainage Search - Confirms whether the property is connected to public water/sewer systems.
Chancel Repair Search - Identifies any historical obligation to contribute to church repairs.
Second Charge Loan
A type of loan which is secured against a property that already has an existing mortgage.
It's called a second charge because it ranks second in priority behind your main mortgage (first charge) if the property is sold or repossessed.
Security
The asset (the property) that the loan is arranged for. If you fail to keep up repayments, the lender can repossess the property.
Self-Certification Mortgage
Also known as a ‘self cert mortgage', this was a type of mortgage that allowed people to state their income without providing proof of income.
Self-cert mortgages were often used to borrow more than affordable, leading to mis-selling and mortgage defaults.
They were banned in the UK in 2014 by the Financial Conduct Authority (FCA) as part of tighter mortgage lending rules.
Self-Employed Mortgage
A self-employed mortgage is not a separate mortgage product, but rather a standard mortgage offered to those who work for themselves — such as sole traders, partners, or company directors — with income that isn't from a traditional salaried job.
Separate Representation
Separate representation is when the buyer and the mortgage lender use different solicitors to handle their legal work during a property transaction.
This may be required when:
Service Charge
This is a regular payment made by a leaseholder (flat or apartment owner) to the freeholder or managing agent, to cover the cost of maintaining and managing shared parts of the building or development.
It is designed to cover:
Shared Equity
Shared equity is a type of home ownership scheme where you buy a property with help from a loan or contribution, usually from the government or a developer, which covers a percentage of the property's value. You still own 100% of the property, but you repay the loan later, often when you sell.
The amount you repay is usually a percentage of the property's market value at the time of repayment — so it can go up or down depending on house prices.
Shared Ownership
Shared ownership is a government-backed scheme that allows you to buy a share of a property (usually between 10% and 75%) and pay rent on the remaining share, which is owned by a housing association.
How it works:
Shared Ownership is better than outright renting, but if you have the ability to save for a little longer in order to be able to buy outright not using this scheme, you will be better for it.
Sole Agency
Relating to the sale of a property, this is where only one estate agent is instructed to sell a property.
Solicitor
The legal professional who will handle the legal aspects of a property purchase or remortgage.
Although it is technically possible to buy a property without a solicitor, not when you need a mortgage on it.
Solicitor Panel
A solicitor panel is a list of approved legal firms or conveyancers that a mortgage lender trusts to handle the legal work involved in a property transaction (such as buying or remortgaging a home).
Source of Funds
In mortgage terms, "Source of Funds" refers to where your money is coming from for the deposit, fees, and other costs related to buying a property. Lenders and solicitors are required by law to check this as part of anti-money laundering (AML) regulations.
Structural Survey
Also known as a Level 3 Building Survey, is a comprehensive assessment of a property's structural integrity, typically conducted when buying a house or planning renovations. It involves a detailed inspection of the building's structure, including foundations, walls, floors, and roof, to identify any defects, potential problems, or areas needing repair.
If there are visible defects or cracks, this type of survey will find out whether the issue is getting worse or not.
Survey
Often referred to as a ‘basic survey' but should be more accurately referred to as a ‘valuation survey' or ‘mortgage valuation', this is a report arranged by the lender and carried out by an independent RICS Surveyor that will confirm the current ‘market value' of the property.
Whichever lender you are using, they need to be sure the property is worth the amount you paying for it, this is because your new mortgage is secured against the property, and in the event you do not repay, they can take ownership of property in order to sell it to clear your debt.
Survey Fee
Some lenders will pay for the survey, others will ask you to pay for it.
Part of our responsibility is to work out the best mortgage for you considering your circumstances, the interest rate and all the costs into and out of the mortgage.
Surveyor
A qualified professional, usually Royal Institution of Chartered Surveyors (RICS), who can carry out surveys or reports, detailing the condition of a property.
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TAP (Total Amount Payable)
The Total Amount Payable is the full amount of money you will pay back over the entire life of your mortgage, including:
TIC (Tenants in Common)
Tenants in Common is a type of joint property ownership where two or more people each own a defined share of a property — which can be equal or unequal.
If one party dies, their share does not automatically go to the other owner (unlike joint tenancy), it is distributed as part of their Will.
Tenant
An individual who rents or leases a property from a landlord or property owner.
Terms of Business
This is a regulatory document that a mortgage advisor or financial firm must give you at the start of your advice process. It sets out important information about their services, so you know exactly what to expect, including:
Tie-in period
The tie-in period is the length of time during which you are contractually bound to your mortgage deal — usually a fixed, tracker, or discounted rate — and would face early repayment charges (ERCs) if you switch, repay, or remortgage before it ends.
Title Deeds
Title deeds are the official legal documents that prove who owns a property or land. They also outline the rights, restrictions, and obligations attached to the property.
Total Amount Payable
The total amount that a person will pay over the entirety of their mortgage, assuming no remortgage.
Tracker Mortgage
A mortgage that follows the Bank of England base rate plus a set percentage.
Transfer Deed
A Transfer Deed (also called a TR1 Form in England and Wales) is a legal document used to officially transfer ownership of a property from the seller to the buyer.
Transfer of Equity
A Transfer of Equity is the legal process of changing the ownership of a property by adding or removing one or more people from the property title — without selling the property.
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Under Offer
A term used where a seller has received an offer on their property from a potential buyer, which has been provisionally accepted.
Underwriting/Underwriter
In terms of a mortgage, this is where the lender's underwriter assesses the mortgage application and documents to decide on approval.
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Valuation Fee
Some lenders will pay for the valuation survey, and some will ask you to pay for it.
Part of our responsibility is to work out the best mortgage for you considering your circumstances, the interest rate and all the costs into and out of the mortgage.
Valuation Survey
Often referred to as a ‘basic survey' or just the ‘survey', this is a report that you are likely to pay for that will confirm the current ‘market value' of the property.
Whichever lender you are using, they need to be sure the property is worth the amount you paying for it, this is because your new mortgage is secured against the property, and in the event you do not repay, they can take ownership of property in order to sell it to clear your debt..
Variable Rate Mortgage
A type of interest rate that can change over time, such as discount rates, tracker rates, and standard variable rate.
Vendor
The person selling a property.
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