Mortgage Solutions

You'll find most of the legal and technical terms involved in mortgages and buying property here, however please contact our advisers if you need any further explanation or help.

APR (Annual Percentage Rate):
The true cost of the mortgage over the full term, set out as a yearly rate, including all fees, terms and interest. The calculation assumes that you maintain the mortgage for the full term (for example, 25 years). APR is a standard calculation in the mortgage industry and allows mortgages from all lenders to be compared.

Arrangement Fee:
It is very likely you will be charged an arrangement fee when taking out a mortgage - however our advisers will be able to talk you through the conditions that apply.

Bank of England Base Rate:
The rate set by the Bank of England, which is reflected in the interest rates charged by lenders.

Building Survey:
An extensive survey, carried out by a qualified surveyor, to spot faults and potential problems in the property you are buying.

Capital:
The amount you have borrowed on the mortgage, on which interest will be charged.

Conveyancing:
The legal work involved in selling and buying property.

Disbursements:
The fees, such as stamp duty and Land Registry fees which you pay to the conveyancer or solicitor.

Early Repayment Charge:
The charge some lenders make if a mortgage is paid off early.

Equity:
The total value of your property less the amount of the mortgage and any other secured loans you have.

Exchange of Contracts:
The point where the property sale becomes legally binding.

External Inspection Valuation:
This is a very straightforward valuation which normally occurs when the amount you're borrowing is well below the value of the property and is particularly useful for remortgages. The surveyor will estimate the value of the property by viewing it from
the road.

Guarantor:
If your income isn't enough to secure a mortgage in your own right, you could ask a guarantor to guarantee the mortgage repayments for you. Your guarantor is fully liable for repaying the mortgage if you default on the loan.

High Lending Fee:
Not all lenders charge this, but if you borrow a high percentage e.g. if you borrow more than 75% of the price of the property, you may have to pay this type of fee.

Home Buyer Survey:
This service includes a valuation but also contains a report on the condition of the property, highlighting any defects that the surveyor has spotted.

Home Information Packs:
Every home no matter what size, must have a home information pack. It brings together valuable information at the start of the house buying process and includes a sale statement, local searches, evidence of title and an energy performance certificate.

Interest:
The money you are charged for borrowing.

Land Registry Fee:
A fee paid to the Land Registry to register ownership of a property.

Lease:
A legal contract which gives the ownership of a leasehold property to the buyer for a fixed period of time.

Mortgage:
A loan to buy a property. The property acts as security for the loan and so can be repossessed and sold if the mortgage repayments are not made.

Mortgage Application Fees:
Fees charged by the lender to organise the mortgage for you. These are not usually refunded if you then do not go ahead with the mortgage. Some lenders will only charge such fees for specific mortgage deals.

Mortgage Deed:
The legal agreement which gives the lender a legal right to the property.

Offer of Advance:
The formal offer of a mortgage from a lender.

Redemption:
Paying off a mortgage.

Stamp Duty:
When you buy property, you may need to pay stamp duty. Until the 2nd of September 2009, if the purchase price is £175,000 or less you don't pay any, if it's more, you pay between 1-4% of the whole purchase price.

Structural Survey:
This is a detailed report that's tailored to your needs and can include tests on drains or utilities. It could be very useful if you're buying an older or unusual home or you're thinking about building an extension.

Title Deeds:
The legal documents which set out the ownership of a property.

Valuation:
This is the most basic type of survey and is the mortgage lender's inspection of the property to assess whether it is suitable for a mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

A fee may be charged for mortgage advice. A typical example is £500. The precise amount will depend on your circumstances.

Tel: 0845 2911104
Email: info@mortgage-advice-wales.com