Mortgage Broker - Loans - A To Z

A
Acceptance fee
Some mortgage lenders will charge you an acceptance fee when they give you a mortgage. It is usually only a small percentage of the loan amount (eg 5%). Although, most mortgage lenders have now waived this fee.

Amortisation
The number of years it takes to repay a mortgage in full by paying regular instalments over a period of time. The most common amortisation period is 25 years.

APR ( Annual Percentage Rate)
The consumer credit Act defines APR as the total cost of credit to the consumer which is expressed as a percentage of the amount of credit granted. This is considered to be the best means of comparing the cost of different types of credit as it presents the true cost to the consumer, by taking into account how and when interest payments are charged. Generally, the lower the APR, the lower the cost of a particular credit deal to the consumer. APR must be displayed by law where any credit is offered to the consumer. This is so that consumers can make an informed decision when comparing different credit options as it allows them to compare like with like.

B
Bridging Loan
A short-term loan that enables a person to purchase a new house, before selling their current house. The loan is paid off when the current house is sold.

Mortgage Broker
An independent intermediary that charges a fee or commission for giving advice and offering a range of mortgages.

Building Insurance
Insurance to cover the fixtures, structure and fittings of a property.

C
Capital
The amount of money borrowed to buy a home.

Capped Rate Mortgage
With a capped rate mortgage, repayments can vary, but only to an agreed limit. Once it reaches this limit, if mortgage rates go higher, repayments will stay the same, and if rates go down, so will the repayments.

Chain
When a seller needs the sale of their current house to complete the purchase of another. The same situation may occur for other people within the chain. As a result, if one sale falls through, the whole chain can collapse.

Collateral
Property or some other asset that is used as security for a loan.

Home Contents Insurance
Insurance to cover any damage or loss of possessions within a property.

Contract
A written legal agreement between the seller and buyer binding both parties to the sale of a property.