Elsby Associates

Elsby Associates Glossary of Terms

Our mortgage "jargon buster" is designed to help you get to grips with the terminology you'll come across when searching for the right mortgage for you and during the application process itself.

APR

This stands for Annual Percentage Rate and can be used to compare the cost of borrowing money from different lenders.

Basic Valuation

Basic valuation A check carried out by a surveyor, on the property, which determines how much the property is worth and to confirm that the property is suitable for a mortgage.

BBR

This stands for Bank base rate, which is set every month by the Bank of England.

Buy-to-let mortgage

A mortgage designed for property investors who buy a property and then rent it out.

Capital and interest mortgage

This is sometimes called a repayment mortgage. With this type of mortgage you pay off some of the capital (the amount of money borrowed) and some of the interest every month.

Capped rate

With this type of mortgage, the rate that you pay is variable to a maximum limit set at the outset for a fixed period (it can go up and down). Terms and conditions may apply to these types of products.

Cashback
Some mortgages offer cashback as an incentive. It is a cash sum that you receive when your mortgage completes. Terms and conditions may apply to these types of products.
Conveyancing

The legal process for buying and selling property.

Discounted rate

With this type of mortgage, the rate that you pay is discounted from the lender's standard variable rate. This discount is guaranteed for a set period of time and the rate can go up and down. Terms and conditions may apply to these types of products.

ERC

This stands for Early Repayment Charge and is an amount of money that you may be charged if you fully repay your mortgage before a set time, usually before the end of the incentive period.

FSA

This stands for the Financial Services Authority. The FSA is an independent organisation that regulates specific areas of the financial services industry including mortgage advice.

Fixed rate

With this type of mortgage, the rate you pay is fixed for a set period of time. Terms and conditions may apply to these types of products.

Freehold

This means you own the property and the land the property is on.

Full Structural Survey

This survey is a more in-depth review of the condition of the property than a homebuyer survey. It does not incorporate a basic valuation.

HLC

This stands for higher lending charge and it is an insurance policy that you pay for but which protects the lender in the event that the lender may have to repossess the property, sell it and then does not retrieve enough money in the sale of property to repay the mortgage in full. This policy would then pay the outstanding balance remaining. The borrower, however, is still responsible for the outstanding balance.

Homebuyers report

This is a survey, which reviews the condition of the property, and incorporates a basic valuation.

Interest-only

With this type of mortgage you only pay off the interest every month, not the capital (the amount of money borrowed). The capital is paid back at the end of the mortgage term. A repayment vehicle, such as an endowment policy or Individual Saving Account, could be used however you should seek independent financial advice. Pink Home Loans do not advise on investments.

Leasehold

This means you own the property for a set period of time but not the land the property is on. After the set period of time, ownership of

Mortgage Payment Protection Insurance

Mortgage Payment Protection Insurance protects your mortgage repayments in the event that you are not able to work due to accident, sickness or unemployment.

We can arrange this type of insurance for you and explain what it does and how it works.

Buildings Insurance

When you take out a mortgage, the lender will require that you have adequate buildings insurance, which insures the property against damage.

If you are buying a freehold property then it is your responsibility to organise this cover yourself. If you are buying a leasehold property (most flats tend to be leasehold) then it is the freeholder's responsibility to arrange it, so make sure that this has been done. We can arrange this type of insurance for you and explain what it does and how it works.

Contents Insurance

Contents insurance is often sold alongside buildings insurance. Lenders do not require borrowers to take out contents insurance, however, it is highly recommended that you do.

We can arrange this type of insurance for you and explain what it does and how it works.

Pure Protection Products

We also offer advice on pure protection products. For example, we may be able to help you if you want to arrange life insurance or critical illness cover.

Our advice and recommendation service extends to the following pure protection products:

  • Term Assurance
  • Income Protection
  • Critical Illness Cover
  • Private Medical Insurance

We can arrange these types of insurance for you and explain what they do and how they work.

If you want to find out more about how we may be able to help you, please call us or fill in one of our Enquiry Forms.

HIPS

Home Improvement Packs now need to be put together by house sellers in order to comply with the regulations governing the sale of residential property. The packs include a detailed description of the property that is made available to prospective buyers.