There is a lot of ‘jargon’ used in the mortgage industry.
We have tried to provide you with a comprehensive explanation of all the terminology that you may come across during the mortgage process
These are mortgages specifically designed for those borrowers who have a history of adverse credit e.g CCJs, Defaults, Mortgage Arrears, Repossessions and bankruptcy.
This is the legal process involved when buying or selling property. Most people use a solicitor or a licensed conveyancer when buying or selling a property because there’s quite a lot of detailed work to do when transferring ownership of a property. If you are obtaining a mortgage your lender will insist that you use a solicitor.
This is the point at which the money to buy your new property is released to the seller, ownership is then transferred to you and you become a proud home owner!
This is a mortgage used by businesses for the purpose of purchasing their own business premises or for financing for investment purposes.
For example, you would need to apply for a commercial mortgage when investing in commercial property or purchase commercial property for investment purposes.
Capped Rate Mortgage
This is a type of loan where a maximum rate of interest is set at the start of the mortgage term. During the capped rate period the interest rate can fall below the capped rate but will never rise above it.
What this means for you the borrower is that you know how high the mortgage payments could rise but are guaranteed the rate will not go any higher, therefore making home loan budgeting easier.
There are two ways of repaying a mortgage either by the capital repayment or interest only route. With a capital repayment mortgage, the capital and interest elements of the loan are paid off with each monthly instalment, with the balance reducing over the length of the loan.
Therefore by the end of the mortgage term, assuming all mortgage payments are made, you have paid off the balance in full and you therefore own your property outright.
Capital and Interest
This is simply another term for capital repayment.