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Jargon

 - While the information researched is believed to be correct, Jump Mortgages Ltd accepts no responsibility for its accuracy -


 

Agreement in Principle After having performed a credit check on you, this is a promise from a lender to advance you funds for a home purchase, so long as their conditions are met.
Arrangement fee An administrative fee charged by a lender for processing a mortgage. This can usually be paid up front or added to the loan.
Basic valuation The most basic form of survey acceptable to a lender.
Booking fee See Arrangement fee
Buildings insurance A policy that pays for the repair of your home in the event of damage or complete destruction of your home. This form of insurance is mandatory
Completion At this point, the ownership of the property legally changes hands.
Contents insurance A policy that replaces the contents of your home in the event of damage, destruction, theft and sometimes loss.
Critical Illness insurance A policy that repays your mortgage in the event that you contract one of a set list of Critical Illnesses
Current Account mortgage This is a combined mortgage and current account. Any deposits you make into the account will immediately reduce the amount owed on the mortgage, thereby reducing either the monthly payments or the term of the mortgage.
Decision in Principle See Agreement in Principle
Disbursements Legal costs incurred on behalf of the client via the solicitor. See Searches and Stamp Duty.
Discount rate A mortgage that offers a discount on a lender’s standard variable rate for a set period of time, typically 2 to 5 years.
Early Redemption penalties Penalties incurred for breaking a mortgage contract, usually between 1% and 6% of the balance outstanding.
Environmental search A search performed by your solicitor to verify that there are no health hazards in the vicinity of your new property.
Exchange of Contracts This is the point at which both the buyer and the vendor are legally bound to go through with the purchase.
Exit fee A final administrative fee for redeeming a mortgage contract
Extended tie-in This is when your Tie-in period is longer than the ‘good’ rate being offered by your lender.
Final repayment fee See exit fee
Fixed rate A mortgage that has fixed repayments for a set period of time, typically 2 to 5 years.
Freehold The ownership of a property outright, without involving  lease, most commonly with houses.
Full structural survey This is the most involved (and most expensive) form of survey and is generally reserved for properties with large amounts of existing damage.
Home Buyer’s report An in-depth report highlighting defects in a  property. The report is generally between 10 and 25 pages in length. This is usually recommended when purchasing a new property.
Home insurance See Buildings insurance & contents insurance
Income Protection insurance A policy that provides you with an income in the event that you are no longer able to work due to long-term illness or injury.
Leasehold The ownership of part of the interior of a building. This situation normally occurs with flats. The freeholder owns the structure of the building and is therefore responsible for its repair ad upkeep.
Life insurance A policy that repays your mortgage in the event of death.
Local search A search performed by your solicitor to verify that there are no building works or other events taking place in the vicinity of your new property that could adversely affect the value.
Mortgage Protection insurance See Income Protection insurance
Offset mortgage Strictly speaking, you have two accounts with the mortgage provider; one is a mortgage account and the other is typically a bank account. Any savings that you have in the bank account will act to deduct interest payments owed on the mortgage account.
Overhang See Extended tie-in
Redundancy insurance A policy that provide you with an income in the event that you are made involuntarily redundant from your job.
Sealing fee See Exit fee
Searches See Title search, Local search and Environmental search
Share of Freehold Similar to leasehold, expect that all ot the leaseholders in the building also jointly own the freehold.
Stamp Duty A purchase tax levied on properties. As of April 2007, homes worth up to £125,000 do not incur this tax. Homes valued between £125,001 and £250,000 are taxed at 1% of the purchase price. It is 3% for homes valued between £250,001 and £500,000 and 4% above that.
Standard Variable rate This is a lender’s base rate, by which they calculate all their other mortgages. Typically it is between 1% to 2% higher than the Bank of England rate
Tie-in period The length of time you are bound to pay a penalty if you redeem your mortgage typically between 2 to 5 years.
Title search A search performed by your solicitor to verify that the person trying to sell you a  property actually owns it
Tracker rate A mortgage that tracks the Bank of England rate for a set period of time, typically 2 to 5 years.


 




 
     
     
 

 

Jump Mortgages Ltd is directly authorised and regulated by the Financial Services Authority. Jump Mortgages Ltd is entered on the FSA register (www.fsa.gov.uk/register/) under reference 471562. The advice and/or advice contained within the website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. The FSA do not regulate some forms of mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.