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During your purchase there may be times when you feel little lost in a sea of mortgage terminology. Not to worry, you’re certainly not alone. The world of mortgages can be filled with mystifying jargon that can leave most people scratching their heads.
Say goodbye to the jargon-induced haze and say hello to a brighter, more informed mortgage journey. Here are a few of the words you may come across, for a full A-Z list visit our friends at Leeds Building Society’s website just click on the link below:
https://www.leedsbuildingsociety.co.uk/mortgages/mortgage-guide/mortgage-terms-explained
Base rate. The benchmark interest rate set by the bank of England.
Broker. A professional adviser who can help you find a mortgage.
Conveyancer. Handles the legal aspects of purchasing a property.
County Court Judgement (CCJ). Indicates an inability to repay debt, potentially impacting mortgage applications.
Debt to income ratio. Your monthly debt payments divided by your gross monthly income.
Deeds. Legal documents proving ownership of a property.
Equity. How much of your home you own. This is the property’s value, minus your outstanding mortgage balance.
Fixed-rate. Interest on the mortgage remains fixed for a specified period.
Loan to Value (LTV). This is a percentage figure used to show the mortgage amount as a proportion of the property’s value. For example, if a property is valued at £100,000 and you have a deposit of £10,000, you’ll need to borrow £90,000, resulting in a Loan to Value (LTV) of 90%.
Market value. The estimated worth of a property based on current market conditions.
Mortgage in principle. Shows how much you may be able to lend using your income and outgoings. An estate agent is likely to ask for this.
Mortgage offer. Formal approval and terms from a lender for a specific mortgage application.
Mortgage term. The length of time you have to repay your mortgage.
Stamp duty. Tax paid on a property purchase above a certain price threshold.
Survey. Inspecting a property’s condition to identify any potential issues/structural problems.
Valuation. Mortgage lenders require a valuation to prove that the property is in suitable condition to lend against, and to confirm the property’s worth.
Remember, any time you come across new terminology you are not familiar with, just return to the jargon buster for an explaination.