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Mortgage

The largest outgoing for most households. With tighter mortgage lending rules, finely balanced household budgets any interest rate increase could see many households ‘mortgage prisoners’. The biggest concern for some is the standard variable rate (SVR) and if the base rate returns to pre-recession rate, then people could face mortgage rates close to 8 or 9%.

The Problem
  • Many individuals and households are unaware of the details of their mortgage, lender and conditions.

  • Households do not give themselves enough time to find the best mortgage deal. So let it lapse onto the SVR.

  • With new lending rules and an ever-changing market people find it difficult to source the best mortgage lender.

The Solution: BeeMyMinder!
  • Use our online policy manger to store your documents and get to understand the detail.

  • Set a policy reminder to allow time to make a household budget on what you can afford.

  • With easy online access to your mortgage and time on your side (from our policy reminder) speak to a mortgage broker.

Find out what the buzz is about!

Jargon Buster

  • Adverse Credit Mortgage — mortgage for people with a poor credit history (also see Sub-prime)
  • APR (Annual Percentage Rate) — the overall cost of a mortgage, including the interest and fees
  • Arrangement Fee — a set-up fee for your mortgage which can be paid for separately or added to you mortgage loan
  • Arrears — when you have missed / ‘defaulted’ at least once on your mortgage repayments
  • Base Rate — rate of interest set by the Bank of England, which tracker rates and lenders’ standard variable rates usually follow
  • Booking Fee — type of mortgage set-up fee
  • Buy-to-Let — property bought with the sole intention of letting it to tenants
  • Capital — the amount of money you borrow to buy a property
  • Capped Rate — the mortgage interest rate charged by your lender that will never exceed the upper 'capped' limit
  • Cashback Mortgage — when your lender gives you an amount of cash on completion
  • Collar — when your interest rate will not fall any lower than a specified amount. For example, rates drop to 4% but your collared at 4.5%
  • Conveyancing — legal process of buying and selling property
  • Defaulting — when you do not meet your minimum monthly mortgage repayment and go into arrears on your mortgage
  • Deposit — the amount you are required (or have) to put down yourself towards the cost of the property. Note: the larger deposit the cheaper the mortgage deals
  • Discounted-Rate Mortgage — where the interest rate you are charged is a set amount less than your mortgage lender's standard variable rate (SVR)
  • Early Repayment Charges (ERCs) — the penalty fees you pay if you want to leave your mortgage during a specified period, usually the period of the initial deal
  • Equity — difference between the value of your property and the amount outstanding on your mortgage
  • Financial Conduct Authority (FCA) — the UK's financial watchdog, the FCA regulates the financial services industry, including insurance companies. The FCA can advise you on making a complaint against an insurance company
  • Fixed-Rate Mortgage — when your mortgage interest rate stays the same for the initial period of the deal
  • Flexible Mortgage — allows you to overpay, underpay or even take a 'payment holiday' from your mortgage. Helps you pay your mortgage off early and save money on interest
  • Freehold — when you own the property and the land it stands on
  • Guarantor — when a third party agrees to meet the monthly mortgage repayment if you are unable to
  • Higher Lending Charge (HLC) — sometimes charged by your mortgage lender if you borrow more than 75% of the property’s value. Protects the lender against you defaulting on your mortgage
  • Homebuy Schemes — government schemes designed to help existing tenants, key workers such as nurses, teachers, or other first-time buyers get onto the property ladder
  • Interest-Only Mortgage — when you pay just the interest on your mortgage each month
  • Intermediary — a mortgage broker or adviser, who helps arrange a mortgage
  • Land Registry — the official body responsible for maintaining details of property ownership
  • Leasehold — when you own the property, but not the land it stands on
  • Loan-to-Value (LTV) — the size of your mortgage as a percentage of the property’s value
  • Monthly Repayment — the monthly amount you pay your lender for your mortgage
  • Mortgage Agreement in Principle — a document that shows you will be able to borrow a certain amount. Used to prove to a seller that you can afford to buy their property
  • Mortgage Deed — a formal contract between the lender and borrower, outlining the legal obligations of the borrower and the rights the lender
  • Mortgage Term — the amount of time you are taking the mortgage out for. For example 25 years
  • Negative Equity — when the value of your home is below the amount remaining on your mortgage
  • Offset Mortgage — links your mortgage with your savings and, sometimes, your current account. Your credit balances are offset against your mortgage debt so you only pay interest on the difference
  • Portability — when you move the mortgage to another property on the same terms and rate as long as long as the loan size does not need to increase
  • Remortgage — when you change your mortgage without moving
  • Repayment Mortgage — when you pay off the mortgage interest and part of the capital of your loan each month
  • Shared Ownership — when the home buyer takes out a mortgage on a share of a property and pays rent for the rest
  • Stamp Duty — a land tax payable when you buy a property for more than £125,000. The rate you pay depends on the purchase price of the property, between 1% and 7%.
  • Standard Variable Rate (SVR) — the default mortgage interest rate your lender will charge after your initial mortgage deal
  • Sub-prime/non-conforming — mortgage for people who have had credit problems
  • Tie-in Period — period in which you are 'locked in' to your mortgage deal, and would have to pay an early repayment charge to move your mortgage elsewhere
  • Tracker Mortgage — when your mortgage interest rate tracks the Bank of England base rate at a set margin above or below it
  • Underwriter — determines if the risk of offering a mortgage loan to a particular borrower is acceptable
  • Valuation — required by lenders to verify that the property is worth the amount you want to borrow
  • Variable-Rate Mortgage — when your mortgage interest rate goes up or down according to your lender’s standard-variable rate
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