Mortgage Jargon Buster top
Remortgaging
or taking out a mortgage or homeowner loan is daunting enough without
technical terms confusing matters. At Harvey Scott we try to keep
jargon to a minimum, and below are listed some down to earth explanations
for terms we sometimes use.
APR | Capital | Completion | Credit Search | Decision in principle | Equity | Exchange | Freehold | Initial Rate | Leasehold | LTV | Mortgage Officer | Remortgage | Stamp Duty | Valuation
APR
The Annual Percentage Rate. This is the percentage of interest you
will pay each year on your loan or mortgage. It is the method used
to compare one product with another or to describe the total charge
for credit over the term of the loan.
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CAPITAL
This describes the initial amount that you borrow from us.
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COMPLETION
Completion is the final legal transfer of ownership of property
- when the property legally becomes yours. At The Mortgage Lender,
we keep delays to a minimum and get to completion as soon as possible
- usually within 4-6 weeks. Homeowner loans can be arranged in as
little as 16 days.
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CREDIT SEARCH
This check is carried out by a Credit Reference Agency to help us
assess your application. It will reveal details about your credit
history, together with information about credit agreements you have
with other organisations. Even if your credit search reveals credit
problems in the past, you shouldn't worry. We treat each case individually,
and can probably still help you.
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DECISION IN PRINCIPLE
Based on the information you provide, we can normally let you know
if we are likely to offer you a mortgage – often in just a few
minutes. This is our decision in principle, and is made subject to
references, a valuation and other conditions.
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EQUITY
This is the amount of money you would have if you sold your home.
To calculate this, subtract the value of your outstanding mortgage
and any secured loans from the current value of the property.
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EXCHANGE
The exchange is said to take place when you pay your deposit, and
agree a completion date.
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FREEHOLD
A freehold property is one where you are the outright owner of the
land the property is built on - as well as the bricks and mortar.
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INITIAL
RATE
This is the rate of interest you pay when you first begin to repay
your mortgage.
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LEASEHOLD
With a leasehold property, you have the right to live there for
a specified length of time, without owning the land the property
is built on. As a leaseholder you may have to pay rent or service
charges to the landowner.
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LTV
(Loan to value)
The loan to value ratio is the size of your mortgage as a percentage
of the purchase price. For instance, if you borrow £60,000 on a
property valued at £100,000, your LTV would be 60%.
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MORTGAGE
OFFICER
This is the dedicated representative that's on hand when you've
got questions to ask, or paperwork that needs filling out. We try
to ensure you always deal with the same Mortgage Officer from your
initial enquiry through every step of the loan process.
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REMORTGAGE
A remortgage is when you decide to switch your existing mortgage
without actually moving house. You may well want to remortgage if
you are looking to raise extra cash or save money on your repayments.
Take a look at our Remortgage page to see how we can help you.
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STAMP
DUTY
This is the government tax you'll need to pay on any property sale
over £60,000. Stamp duty is set at 1% for properties valued between
£60K - £250K, 3% for properties between £250K - £500K, and 4% on
properties over £500K. You do not have to pay stamp duty when you
remortgage.
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VALUATION
This is a professional check carried out by a surveyor to tell us
the value of your property.
If you would like a mortgage advisor to contact you please fill
out our form and an advisor will be in contact with you in the next
24 hours (subject to bank holidays)
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Harvey Scott is registered under the Data Protection Act 1998 to
process data provided on this enquiry form.
Your home is at risk if you do not keep up repayments on a mortgage
or other loan secured on it
