Jargon Buster

All industries and businesses use jargon and the world of mortgages is no different. Below we have listed the most common ones we come across with a straightforward explanation. 

Adverse

Adverse credit means that you may have had some missed payments on other finance agreements.  This can cause problems getting a mortgage and may mean that you need to pay a higher interest rate. 

AIP or DIP

Abbreviation for Agreement (or Decision) in Principle. It is an initial enquiry sent to a mortgage lender to see if an application is likely to be accepted by them. 

App 

Abbreviation for Application. 

B&C

Abbreviation for Buildings & Contents. This is insurance for your home. ‘Buildings’ cover the actual buildings while ‘Contents’ protect your belongings in the home. 

Broker

Another name for a Mortgage Advisor. 

Buy to Let (BTL)

A mortgage to buy a property as an investment to rent out. 

Completion

The date when a property purchase is finalised and you become the owner of the property. 

Compliance

The guidelines that we have to ensure the work we do stays within the FCA rules.  

Conveyancing

The legal work undertaken by a solicitor when you buy a house. 

Debt Consolidation

Borrowing money to repay other debts, such as loans or credit cards, usually to reduce monthly payments or interest rate. 

Enquiries

Questions raised by a buyer’s solicitors to the vendor’s solicitors about the property. 

ERC’s

Early Repayment Charges. These are penalties that some mortgages have included in their terms. The lender will require a fee if you repay the mortgage during an initial period.  

Exchange of Contracts (Exchange)

The date when a property purchase becomes legally binding, when the mortgage offer has been issued and all the legal work has been completed. Typically, this happens a few days before completion.

Fact Find

The initial form which gives us all the details we need about you and your circumstances to enable us to find the best option for your mortgage.

KFI

Abbreviation for Key Facts Illustration.  A document we produce to illustrate the costs and details of a particular financial product. 

Life Insurance

An insurance policy, usually designed to pay out a lump sum if you die.  Often used to repay a mortgage in the event of dying during the term of the mortgage.  Often referred to as just “life”. 

Mortgage

A loan, usually to buy a property, which is secured against that property. 

Mortgage Term

The length of time the mortgage is over. Can be anything up to 40 years.

Offer 1 - A mortgage offer, which is issued when you are fully accepted for a mortgage. 

Offer 2 - When you make an offer to buy a property, often lower than the asking price and then go on to negotiate a final purchase price. 

Proc Fee

Abbreviation for procuration fee, which is the commission we are paid by mortgage lenders.

Rate

The interest rate for a mortgage. 

Resi

An abbreviation of residential, which is mortgage to buy your own home. 

Re-mortgage

A mortgage application which replaces an existing mortgage, usually for a better deal or to borrow more money. 

Searches

Part of the work a solicitor does in the buying process.  They are searching databases to ensure that there is no problem with the property. 

Survey or Valuation

A surveyor will conduct a check of the property you are buying to ensure it is worth what you are paying for it and that there are no problems with the building. Often abbreviated to “val”.

Vendor

The person selling a property.

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