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Below is a list of terms which are frequently used in describing different types of mortgages.
APR - Annual Percentage Rate
The yearly rate of interest which will be applied to the amount of the mortgage.
Buy to Let Mortgage
A mortgage taken out on a property with the intention of renting the property out to tenants.
Commercial Mortgage
A mortgage taken out on a non-residential property by a business.
Fixed Rate Mortgage
A mortgage with a fixed rate of interest for a specified period.
Flexible Mortgage
A mortgage linked to a current account which allows for variance in the monthly re-payments. For example, over-paying, under-paying or taking a break from making re-payments.
HIP - Home Information Pack
A pack containing documents about the property being sold which includes an energy efficiency rating. From 10th September 2007, all properties with 3 bedrooms or more will need to possess a HPI pack before being sold.
Interest Only Mortgage
A mortgage with monthly re-payments that equal the amount of interest accumulated on the capital. The outstanding mortgage balance is usually settled at the end of the mortgage with capital gained from an alternative investment.
Re-Mortgage
A mortgage taken out on an existing property without the owner moving to a new property.
Re-Payment Mortgage
A mortgage with monthly re-payments that equal the amount of interest accumulated on the mortgage and the re-payment of the mortgage itself.
Self-Certification
Self-Certification is for borrowers who are required to prove their own earnings, for example, self-employed borrowers.
Stamp Duty
A tax charged on the sale of a property over £125,000. Currently, the charges are 1% on properties up to £250,000, 3% on properties up to £500,000 and 4% on properties over £500,000.
Tracker Mortgage
A mortgage with an interest rate that reflects the rate of the Bank of England.
If you have any questions regarding your mortgage, please do not hesitate to contact us and we will endeavour to assist.