The Tipton & Coseley Building Society
Mortgages
Mortgages you can feel comfortable with
Jargon buster
| Mortgage glossary of terms | |
| Advice | A recommendation about the most suitable mortgage for you made by a regulated mortgage adviser. |
| Annual statement | A statement sent every year showing how much you have paid and how much you still owe. |
| APR | Stands for Annual Percentage Rate. This shows the overall cost of a loan, taking into account the term, interest rate and any charges. |
| Buy to let | A loan taken out to buy a property which you intend to rent to tenants. |
| Capital | The amount you borrow to buy your home. |
| Capped rate | A mortgage rate that has a maximum limit if rates increase, but can reduce if rates decrease. |
| Cashback | A cash sum given as part of your mortgage deal. |
| Collared rate | A mortgage rate that has a minimum limit you can pay during a set period. |
| Deposit | The amount of your own money that you put into buying your home. |
| Discount rate | A mortgage rate that is discounted from a variable rate so your monthly payments remain a percentage below the variable rate for a set period of time. |
| Early repayment charge | A charge you must pay if you pay off your mortgage early or move to another lender. |
| Fixed rate | A mortgage rate that is fixed so your monthly payments remain the same for a set period of time. |
| Income multiples | The factor by which your earnings are multiplied to determine how much you can borrow. |
| Interest | The charge made when borrowing money to buy your home. |
| Interest only | A mortgage where you only pay the interest charged each month. This means that you are not reducing the amount of money you owe as part of your mortgage repayment. You will need to make alternative arrangements to repay your capital. |
| Keyfacts documents | Standard documents that all authorised lenders give to explain the services they provide. |
| Loan to value | The percentage of money you want to borrow in comparison to the value of the property. |
| Mortgage | A loan which is secured against your home. |
| Rate switching | The process of switching to a new rate with your existing lender without moving home. |
| Remortgage | The process of moving from one lender to another without moving home. |
| Repayment mortgage | A mortgage that pays off both capital and interest at the same time. |
| Stamp duty | A tax which home buyers must pay on properties above a figure set by the Government. |
| Standard variable rate | The normal mortgage rate charged. The standard variable rate is often used as the basis for other products such as fixed and discount rates. |
| Secured | A mortgage is a secured loan on your home. This means that if you do not keep up repayments on your mortgage then a lender can repossess your home. |
| Survey | A report on the condition of the property you are planning to buy. |
| Term | The length of time you choose to pay your mortgage over. |
| Valuation | A brief inspection of the property you are planning to buy to determine the market value. |
© The Tipton and Coseley Building Society 2009
www.thetipton.co.uk