Mortgage Glossary

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Don't be confused by mortgage jargon. Here's a useful glossary of some of the terms you may come across when arranging a mortgage. YOUR MOVE are here to help you cut through the financial jargon.

Advice

A recommendation about the most suitable mortgage for you made by an adviser who is regulated by the Financial Services Authority (FSA).

Approved in principle

A certificate some lenders will give you showing the amount they will probably be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.

Base Rate

The interest rate set by the Bank of England is known as the Base Rate. This can change at any time. [View Base Rate Changes]

Cashback

Some lenders offer "cashback" on completion of your house purchase. This could be a fixed lump sum, or an agreed percentage of the mortgage loan. Remember to check whether there will be conditions attached.

Discounted Variable Rate Mortgage [View demonstration]

A set percentage discount below your lender's Standard Variable Rate for a predetermined length of time. Your monthly payments can still go up and down with this type of rate.

Early Repayment Charge

It's important to remember that if you repay your mortgage early it can mean you end up paying an additional payment depending on the type of mortgage you have.

Fixed Rate Mortgage [View demonstration]

A fixed interest rate is applied to your mortgage for a predetermined time, during which your monthly repayments will stay the same.

Flexibility

Flexible features may apply to many types of mortgages. Features could include the facility to overpay or take payment breaks amongst others. Your Financial Consultant will be able to advise you about the different options available.

Interest Only Mortgage

You pay the interest on your mortgage to the lender each month until the end of the mortgage term. The capital borrowed does not reduce and it is your responsibility as a borrower to ensure that you have a method or means of repaying the capital at the end of the term.

Lender's Arrangement Fee

This fee may be charged by the lender to cover their administration costs in setting up your mortgage.

Lender's Standard Variable Rate [View demonstration]

The interest rate set by the lender and varies from lender to lender. If your mortgage is on this rate your payments will vary in line with lender rate charges.

Higher Lending Charge

Insurance to protect the lender from financial loss in case you fall significantly behind with your mortgage payments and your property is repossessed. This might be required if your borrowing exceeds 75% of the property's value.

Mortgage Term

This is the period of time over which your mortgage is proposed to run. Remember the longer your mortgage runs, the more interest you are charged overall so care needs to be taken to ensure that the term chosen is suitable.

Repayment Mortgage

Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term.

Tracker Rate Mortgage

This type of rate is usually defined as a percentage amount above, below or equal to the Bank of England's Base Rate. As the Bank of England can change rates at any time your monthly payment can vary as your rate follows or "tracks" this base rate.

Valuation Fee

Normally charged by the lender to carry out a basic inspection of the property. The resulting valuation report is solely for the lender's benefit and is used to assess mortgage suitability.

02/12 EAF4609

© YOUR MOVE - Your Move is a trading name of your-move.co.uk Limited, registered in England at Newcastle House, Albany Court, Newcastle Business Park, Newcastle upon Tyne NE4 7YB (number 01864469). Your-move.co.uk Limited is an appointed representative of First Complete Limited, which is authorised and regulated by the Financial Services Authority (FRN:435779) for mortgage and non-investment insurance advice. We are members of The Property Ombudsman (TPO), there to protect your interests. We abide by the TPO code of conduct. * Source: Nielsen February 2012. ** Calls may be recorded and/or monitored for training and/or data protection purposes.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

In certain locations you may be referred to a financial advisor from Linear Financial Solutions rather than a YOUR MOVE consultant. Linear Mortgage Network Ltd t/a Linear Financial Solutions is an Appointed Representative of Pink Home Loans. Pink Home Loans is a trading name of Advance Mortgage Funding Limited, which is authorised and regulated by the Financial Services Authority (FRN: 305008) for mortgages and non-investment insurance advice. Registered Office: Ground Floor, Buildmark House, George Cayley Drive, Clifton Moor, York, YO30 4XE. Linear Mortgage Network Limited - Registered No:5198588 . There will be a £75 administration fee payable on application. There may also be a fee for mortgage advice, the charging of such a fee will depend on your circumstances, but we estimate that it will be 1% of the loan amount. (ie: £1000 on a £100,000 mortgage)