Annual Percentage Rate. This is calculated by taking the total interest cost over the term of the mortgage, plus fees which may be applicable.
This is the set-up fee for your mortgage, and can include a range of fees such as booking and application fees, which are an important consideration when picking a mortgage deal and can amount to thousands. At One 77 Mortgages we NEVER charge you an arrangement fee.
This is when you have not kept up your payments and have ‘defaulted’ at least once. By falling into arrears you are at risk of losing your home.
The rate of interest set down by the Bank of England. This is used to base some mortgages on e.g. tracker mortgages. SRV’s (Standard Variable Rates) are also set depending on base rate moves.
This is another mortgage set up fee. These can also be absorbed or included into the Arrangement Fee.
A short term loan (typically 12 months) secured against property that is used to ‘bridge’ a gap between a longer term solution becoming available.
A BTL (buy-to-let) is a property bought solely for letting to tenants. One 77 can arrange buy-to-let mortgages to suit these borrowers.
The amount you borrow as a mortgage to buy a property.
A mortgage against commercial property, either owner occupied or for an investor.
The score a borrower has that is used to help determine their suitability for borrowing. When a borrower has a poor credit score it is typically from missed payments on credit agreements, credit cards or loans. It is always best to check you credit score prior to applying for a mortgage.
A secured facility that is typically used for the construction of residential property, this could also include conversion and refurbishment work.
Early Repayment Charge
Some mortgage incur an early repayment charge if some, or all, of the mortgage is paid off before the end of the agreed term.
The amount of value a property has, minus the outstanding sum on the mortgage on it.
Fixed rate mortgage
A specific mortgage deal set over a defined number of years – generally between two and five. The interest rate is ‘fixed’ for the agreed time period.
A person, such as a parent, who guarantees to meet the mortgage repayment if the borrower cannot.
A mortgage where the borrower is only required to pay the interest on the ‘Capital’. However, the initial borrowing sum/capital will remain unpaid and will need to be settled at the end of the mortgage term.
Key facts illustration
A document that sets out the details of the mortgage.
Loan to value (LTV)
The percentage of the price of a property that you have borrowed as a mortgage. For example, if you borrow £90,000 on a property worth £100,000, the LTV is 90%.
The length of time you have agreed to pay off your mortgage. This is typically 25 years, but can be more or less.
When the amount you owe on your mortgage is greater than the value of your property. This can become problematic when you are looking to move house.
A type of mortgage that allows borrowers to ‘offset’ any savings they have against their mortgage. For example, if you have £100,000 offset mortgage and £25,000 savings, you will only pay interest on £75,000.
Generally most lenders allow 10% overpayments every year on a mortgage without penalty. Overpaying will mean you pay less interest and therefore shorten the time it takes to pay off the mortgage.
When you arrange a new mortgage on your current home.
A mortgage where you pay the interest as well as the ‘Capital’ sum. With a repayment mortgage at the end of the mortgage term you no longer owe anything, assuming you have kept payments up to date.
Second Charge Loan
A Mortgage that sits behind the 1st charge loan (usually a traditional mortgage with a bank), a product like this is used for extra borrowing or to fund things such as home renovations or personal spending.
These are mortgages generally linked to the Bank of England base rate. The repayment amount will therefore rise or fall in line with the BoE base rate.