| A brief list of some of the most common
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| | freeholder or landlord.
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| Mortgage terms.
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| | Liability
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| Adverse Credit
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| | This relates more to commercial
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| The term used if the borrower has a poor
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| | mortgages. With a commercial mortgage
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| credit history. This could include
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| | liability for the repayment of the loan
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| previous mortgage or loan arrears,
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| | depends on the legal structure of the
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| bankruptcy or CCJ's. Other terms used to
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| | business:
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| describe an adverse credit mortgage
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| | A sole trader will be personally liable
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| include:
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| | for the mortgage debt. Personal assets
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| Bad credit mortgage
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| | could be seized if the business defaults.
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| Poor credit mortgage
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| | Partners are jointly liable for the debts
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| Non status mortgage
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| | of the partnership and their personal
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| Credit impaired mortgage
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| | assets are at risk
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| No credit mortgage
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| | With a limited-liability partnership and
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| Low credit score mortgage
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| | a limited company, the liability falls
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| APR (Annual Percentage Rate)
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| | firstly on the business rather than on
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| The interest rate reflecting the cost of
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| | the individual partners and directors.
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| a mortgage as a yearly rate. The APR
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| | The lender may take a floating charge on
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| provides home buyers with the ability to
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| | business assets in general, rather than
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| compare different types of mortgages
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| | simply on the current property being
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| based on the annual cost of each.
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| | purchased.
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| Arrangement Fee
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| | The lender may also insist on personal
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| The fee you pay your Lender in return for
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| | guarantees as a condition of granting the
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| them providing you with a mortgage.
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| | loan, in which case the partners and
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| Usually paid on completion or with your
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| | directors may be held personally liable
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| application, these fees usually apply
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| | anyway.
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| when you take out a fixed rate, discount
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| | Life insurance
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| or cashback mortgage.
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| | If you have a joint mortgage, life
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| AST (Assured Shorthold Tenancy)
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| | insurance can be acquired that will see
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| A form of tenancy that gives the landlord
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| | the mortgage paid of should one of you
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| the right to repossess their property
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| | pass on.
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| after a set amount of time laid out in
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| | LTV (Loan to Value)
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| the tenancy agreement. New tenancies are
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| | The size of the mortgage as a percentage
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| automatically ASTs unless otherwise
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| | of the value of the property i.e. A £90k
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| stated.
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| | mortgage on a house valued at £100k
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| Assured tenancy
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| | would mean an LTV of 90%.
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| The landlord can charge a market rent
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| | MIG (Mortgage Indemnity Guarantee)
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| (the current rate for similar property in
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| | A one off payment made when you set up a
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| that area) and take back the property
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| | mortgage a kind of insurance policy for
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| under certain conditions, as set out in
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| | the lender. Thisoffers them protection
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| the Housing Acts of 1988 and 1996.
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| | against the value of the home falling to
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| Bridging Loan/Finance
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| | less than the mortgage. It is generally
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| Short term loan to enable the purchase of
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| | only charged to borrowers with a less
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| one property before the sale of another
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| | than 10% deposit, but this can vary.
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| essentially releasing funds that are
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| | Mortgage
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| required for the purchase. You should
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| | A loan to buy a property where the
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| always consult a professional before
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| | property is used as security against you
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| considering any bridging finance as it
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| | paying back the loan.
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| could be a solution that is worse than
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| | Mortgagee
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| the problem.
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| | The company or organisation that lends
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| Brokers Fee
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| | you the money.
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| A fee charged by an intermediary or
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| | Mortgagor
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| advisor for locating the most appropriate
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| | The person taking out the mortgage.
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| mortgage for the borrower.
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| | Non-Status
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| Buildings insurance
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| | Where a lender may not require income
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| Insurance you can take out when you buy a
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| | details from you or may accept some
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| property that will cover the cost of any
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| | previous poor credit history i.e. CCJ's
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| damage to the house and or contents..
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| | or previous mortgage arrears.
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| Buy to Let
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| | Payment Holiday
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| A mortgage meant for those who wish to
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| | A period during which the borrower makes
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| purchase a property to rent out to
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| | no mortgage payments.
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| others. The decision on whether you are
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| | Regulated tenancy
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| able to repay this type of mortgage is
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| | A legal right to live in your
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| often based up on the future rental
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| | accommodation for a period of time. Your
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| income from the property rather than the
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| | tenancy might be for a set period such as
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| personal income of you the borrower.
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| | a year (this is known as a fixed term
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| CCJ (County Court Judgment)
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| | tenancy) or it might roll on a
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| A judgement reached in the County Court
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| | week-to-week or month-to-month basis
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| generally realted to non payment of a
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| | (this is known as a periodic tenancy).You
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| loan, mortgage etc debt in general. If
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| | are a regulated tenant if you moved in
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| you pay off the debt, the CCJ will be
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| | before 15 January 1989, you pay rent to a
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| satisfied and a note is put on your
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| | private landlord and your landlord does
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| records that states this.
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| | not live in the same building as you.
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| Chain
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| | Remortgage
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| A housing 'chain' made up of a number of
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| | The taking on of a second mortgage to pay
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| buyers and sellers, essentially the line
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| | off the first. The most common reasons
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| of buyers and sellers involved in each
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| | for doing this are that another mortgage
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| house move.
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| | is available at a better rate or that the
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| Charge
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| | value of the property has gone up
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| Any right or interest, especially with a
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| | allowing for the opportunity to borrow
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| mortgage, to which a freehold or
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| | more money against the property.
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| leasehold property may be held. Basically
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| | Right to Buy
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| a charge is the claim the lender has on
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| | For example, a tenant in a council owned
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| the property until the mortgage or loan
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| | property may purchase the property at a
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| is satisfied.
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| | discount depending on length of their
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| Completion
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| | tenancy.
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| The term used when the seller and buyer
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| | Self Certified
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| exchange the finances required to buy a
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| | Generally when a borrower applies for a
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| property through their respective
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| | mortgage he or she will be asked to
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| solicitors. At exchange of contracts a
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| | provide pay slips or company accounts to
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| deposit, usually 10%, will have been
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| | prove their income. If it is difficult or
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| paid. At this point the buyer becomes
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| | inconvenient for you to provide this
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| legal owner of the property.
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| | evidence, you can choose to self-certify
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| Conveyance
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| | your income. This involves signing a
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| The legal process in which ownership of
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| | declaration which states your income
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| the property is transferred from the
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| | sources and amounts. Lenders will charge
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| seller to the buyer. Generally undertaken
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| | you higher rates than average and offer
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| by a solicitor, or licensed conveyancer.
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| | you a more limited range of mortgages if
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| Early redemption fee
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| | you choose to self-certify your income,
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| If you decide that you want to sell your
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| | in general it's not a good idea to
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| property or remortgage then you will be
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| | self-certify just to avoid some
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| redeeming you mortgage early. Most
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| | paperwork.
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| lenders charge a penalty fee, especially
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| | Stamp Duty
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| during any period of a fixed, capped or
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| | Tax paid by the buyer of a property set
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| discounted rate. Be sure you are clear
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| | at 1% for properties over £60k, 3% for
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| about any potential penalties when you
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| | properties over £250k and 4% for
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| are about to take on a mortgage.
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| | properties over £500k.
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| Equity and negative equity
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| | Structural survey
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| The amount of value in a property that
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| | The most wide ranging check of the
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| isn't covered by a mortgage - simply take
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| | structure of a property. This is carried
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| the amount of the mortgage from the
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| | out by professional surveyor and should
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| valuation to work out the equity. vThis
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| | uncover any defects or faults with the
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| is where the money you owe on the
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| | building.
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| mortgage is greater than the value of
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| | Tenancy
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| your property.
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| | A legal written agreement between a
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| Exchange of contracts
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| | landlord and tenant that sets out the
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| The contract is a written agreement that
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| | terms of the rental.
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| lays out the terms between the buyer and
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| | Term
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| the seller. When both parties exchange
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| | The period of years over which you take
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| contracts, usually weeks before
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| | the mortgage and repay it.
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| completion, the deal becomes legally
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| | Term Assurance
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| binding. Often a deposit of around 10%,
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| | An insurance policy designed to repay the
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| is paid at this stage.
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| | mortgage on the death of the insured
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| Fixed Rate
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| | person. Level Term Assurance covers a
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| A set interest rate on a mortgage fixed
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| | principal sum throughout the policy term
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| for a period of time. This varies from
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| | and pays out the full amount on death.
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| lender to lender.
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| | Reducing Term Assurance is designed to
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| Freehold
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| | repay the balance outstanding on a
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| If you are the property owner outright
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| | repayment type mortgage upon death. Term
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| then your property is freehold. Most
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| | Assurance may also pay out early on the
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| houses are freehold wheres many flats are
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| | diagnosis of a terminal illness.
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| leasehold, since you are not the owner of
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| | Underwriting
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| the whole building containing the flats.
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| | The process of evaluating a loan
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| Gazumping
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| | application to determine the risk
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| If you are in the process of purchasing a
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| | involved for the lender. This involves an
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| property and your offer has been accepted
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| | analysis of the borrower's
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| but the seller gets a better offer,
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| | creditworthiness and the quality of the
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| before you complete, and takes it then,
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| | property itself.
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| you've just been 'Gazumped'.
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| | Unencumbered
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| Interest Only Mortgage
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| | Where the property is owned outright and
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| A mortgage whereby the borrower is only
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| | no mortgages or loans are secured against
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| required to pay inerest on the amount
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| | it.
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| borrowed during the mortgage term. It is
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| | Valuation
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| the borrowers responsibility to ensure
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| | A simple check of the property in order
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| that enough funds will exist (either
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| | to find out how much it is worth and
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| through an investment policy or other
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| | whether it is suitable to secure a
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| means) to repay the full mortgage at the
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| | mortgage against.
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| end of the term.
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| | Valuation Fee
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| Intermediary
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| | The fee paid by a borrower to cover the
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| A mortgage broker or advisor who finds
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| | cost of the lender checking that the
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| the most suitable mortgage for a borrower
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| | property is suitable security for the
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| and arranges the mortgage on their
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| | mortgage.
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| behalf.
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| | Variable Rate
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| Leasehold
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| | A type of interest rate the lender can
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| If you buy a leasehold property you don't
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| | charge. It goes up and down and your
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| own the property rather the right to live
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| | repayments change accordingly.
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| there for a specified period of time,
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| | Vendor
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| however much time remains on the lease.
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| | The person selling the property.
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| The owner of the property is called the
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