The mortgage loan.
A recommendation about the most suitable mortgage for you, given by a firm which is regulated by the Financial Conduct Authority. Bank of Ireland can offer mortgage advice to residential customers.
- Annual Percentage Rate of Charge (APRC):
This shows the overall cost of borrowing, taking into account the term, interest rate and other costs.
- Approval in Principle (AIP):
The AIP process checks how much you could borrow based on the information you’ve provided, as well as performing various criteria and credit reference agency checks. An AIP is then a conditional decision to lend based upon the findings.
Amounts owed under the mortgage that have not been paid and are overdue.
- Bank of England Base Rate (BBR):
The rate set by the Bank of England. Banks and building societies use the Bank of England Base Rate to set the interest rates they pay on deposits, or charge on loans.
- Base Rate Tracker:
Base Rate Tracker: These mortgages track the Bank of England Base Rate, with the interest rate changing as the base rate rises or falls.
- Buy to Let mortgage:
A loan to be secured on a residential property let out to tenants. It can either finance a new purchase or refinance an existing mortgage with us or another lender.
This is the amount that you owe under the mortgage with interest being charged on this sum.
- Capital and Interest mortgage:
Also called a repayment mortgage. Your monthly payment covers the interest a lender charges for the loan and also repays part of the money borrowed. In the early years of your mortgage term the bulk of your monthly payment is interest. However, as the mortgage balance reduces in time, so does the proportion of interest. Assuming that you keep up the payments, the mortgage will be repaid at the end of the mortgage term. Alternatively, repayments can also be calculated on an interest only or part repayment and part interest basis.
The common term for a series of property transactions linked to your sale or purchase through your buyer or seller.
- Change of Parties (COP):
Adding someone to a mortgage or removing them from it. This is subject to underwriting approval and under current lending criteria will need to be completed by a solicitor. This is also referred to as a Transfer of Equity (ToE).
Completion is achieved when the purchase money is paid to the seller, the transfer documents have been completed, and the seller hands over the keys. The mortgage is normally completed at the same time by the signing of the mortgage deed and the transfer of the advance.
The legal process involved in buying and selling a home, carried out by a legal practitioner (Conveyancer) who specialises in property transactions.
- Credit score:
Credit scoring is used by lenders as part of the underwriting process to assess whether to give a loan. Your credit score will be based on your credit history, which takes into account your past reliability in repaying loans, mortgages and credit cards etc.
- Debt consolidation:
Combining a number of outstanding debts into one loan.
Legal documents that demonstrate ownership of a property or piece of land.
A percentage of the purchase price which the buyer pays on exchange of contracts.
- Early Repayment Charge (ERC):
A charge payable on some mortgages, usually during a promotional period, if the outstanding balance is repaid early, or a sum is repaid before it is due. The amount depends on the sum involved and the terms of the mortgage.
The amount that would be left after selling the property and paying off any outstanding mortgages, fees and charges.
- Exchange of contracts:
The point at which both buyer and seller sign their copies of the contract and these are exchanged by their respective legal representatives. The buyer usually pays a deposit at this point and the date of completion is agreed. In England and Wales, this is when everybody is legally bound to the transaction and when the buyer should take out buildings insurance.
- Financial Conduct Authority (FCA):
The FCA regulates the financial services industry in the UK, including mortgages. It aims to protect consumers, protect and enhance the financial markets, and encourage effective competition in the interest of consumers.
- Financial Ombudsman Service (FOS):
An independent ombudsman, set up by parliament to help resolve individual disputes between consumers and financial businesses.
This is a legal title demonstrating ownership of a plot of land and all structures within it in England, Wales and Northern Ireland. Alternatively you could have a leasehold.
- Fund transfers:
The transfer of money from one financial institution to another; usually occurs at completion, via a solicitor, when the money for your purchase or sale is transferred.
- Further loan (also known as a further advance):
An additional loan to your existing mortgage, taken after the main mortgage has completed. It is also secured against the property.
- Higher Lending Charge:
A fee which may be charged when the amount borrowed is more than a given percentage of the value of the property. In these cases, the lender will use the fee to purchase an insurance policy to protect them against financial loss, in case a borrower doesn’t meet their mortgage payments. The fee is usually payable in full upon completion. You would still be liable for any mortgage shortfall debt if, after possession, the sale proceeds are not enough to repay your outstanding debt.
A document specifying the most important details of the mortgage. It allows you to compare it with mortgages from other lenders.
- Initial interest:
The payment due for the period from the day the mortgage began up to the first payment date.
The charge applied when you borrow money from a lender.
- Interest rate:
The percentage figure that determines how much interest you pay.
- Interest only mortgage:
With this type of mortgage you only pay the interest on your mortgage every month, and you pay back the amount you initially borrowed at the end of the mortgage term. If you choose an interest only mortgage it’ll be your responsibility to ensure you’re able to repay the capital at the end of the mortgage term. Alternatively, repayments can also be calculated on a capital and interest or part repayment and part interest basis.
- Joint mortgage:
A mortgage with more than one named individual responsible for repaying the loan.
- Land Registry:
The organisation responsible for keeping and maintaining the details of land ownership in England & Wales, referred to as the Land Register. In Scotland this register is maintained by the Registers of Scotland and in Northern Ireland by the Land and Property Services.
A legal title where the land is owned under a lease between the leaseholder and the freeholder. The lease gives the leaseholder the right to use the land for a fixed period of time, subject to the conditions of the lease including payment of ground rent to the freeholder. The most common alternative is a freehold.
The bank or building society who lent you the money for your mortgage.
- Life insurance cover:
Insurance which pays out on the death of the policy holder. Policies can run alongside your mortgage and will pay off all or part of the outstanding debt if you die within a specified term of the insurance policy.
- Loan to Value (LTV):
The LTV is the amount of your existing loan as a percentage of the value of your property. For example, if your outstanding mortgage balance is £75,000 and your property is worth £150,000, your current LTV would be 50%.
- Local Authority search:
A search of the local area as part of the conveyancing service. This highlights anything that may affect the property or surrounding area, such as planned road building and planning permissions.
A mortgage is a legal way of using property as security for the repayment of a debt.
- Mortgage deed:
A mortgage deed is a legal document between a lender and a borrower that creates the interest the lender holds against the borrower’s property. This may also be known as a Legal Charge.
- Mortgage offer:
A document that includes the loan amount, conditions specific to the mortgage and mortgage product information such as rates, fees and Early Repayment Charges where applicable. You’ll be asked to accept the Mortgage Offer in order to proceed with the loan.
- Mortgage Payment Protection Insurance (MPPI):
An insurance policy designed to provide a regular income to pay your mortgage, if you become unemployed or unable to work due to an accident or sickness.
This is a sum of money paid to your mortgage account in addition to your normal monthly payment, with a view to paying off your mortgage earlier or to reduce your monthly payments.
- Part repayment and part interest only:
Part repayment and part interest only mortgages allow you to pay off the capital and interest on one part of your mortgage, and only the interest on the other part. On the interest only part of your mortgage, it’ll be your responsibility to ensure that you can repay the capital at the end of the mortgage term. Alternatively, your mortgage can also be calculated on a fully interest only or fully capital and interest basis.
Allows you to transfer your mortgage deal to a new property if you wish to move, subject to lending criteria.
- Promotional period:
A mortgage product with a special interest rate for a specified length of time. This’ll normally have an Early Repayment Charge attached, which is payable if the mortgage is repaid during this promotional period. Your mortgage statement will tell you if you’re in a promotional period.
The term used by estate agents, solicitors and lenders for the buyer of a property.
The full repayment of the loan by the borrower.
- Repayment mortgage:
Also called a Capital and Interest mortgage. Your monthly payment covers the interest we charge for the loan, and also repays part of the money borrowed. In the early years of your mortgage term, the bulk of your monthly payment is interest. However, as the mortgage balance reduces in time, so does the proportion of interest. Assuming that you maintain the payments, the mortgage will be repaid by the end of the mortgage term. Alternatively, repayments can also be calculated on an interest only or part repayment and part interest basis.
- Residential mortgage:
A residential mortgage is a loan borrowed from a bank or building society to buy a house or other property for the borrower or borrowers to live in. The loan is secured against the property and is repaid over an agreed period of time.
A qualified and regulated person handling legal matters, including conveyancing.
- Stamp Duty Land Tax:
A government tax you’ll have to pay if the price of the property you’re buying is above a minimum amount (specified by the government and subject to change). The percentage you pay varies according to the value of the property and is paid on a sliding scale. For further details visit HM Revenue & Customs website.
- Standard mortgage valuation:
This type of valuation is used by the mortgage provider to check the value of the property and make sure it’s suitable to use as security for your mortgage. A Surveyor will be able to provide a more detailed report for your own use so you’re fully aware of any structural issues. You can find more information on local surveyors and different types of surveys they offer on the Royal Institute of Surveyors (RICS) website at www.rics.org/uk/
- Standard Variable Rate (SVR):
A variable rate of interest set by a lender, which many mortgage products change to when their Promotional Period ends. Changes to a Standard Variable Rate are made at a lender’s discretion and are not directly linked to an external rate.
- Tracker rate:
Variable rate mortgages track the Bank of England Base Rate (BBR). Rates move up or down as the base rate changes.
- Under offer:
When the seller has provisionally accepted the buyer’s offer.
The term used by estate agents, solicitors and lenders for the seller of a property or piece of land.