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Guide to Mortgage Terms
Listed below is a guide to mortgage terms. It is a useful list of definitions of mortgage terms that may or may not be familiar to you.
This stands for Annual Percentage Rate. It takes into account all fees and other costs in connection with the mortgage as well as the lenders interest rate.
This is the actual amount of money that you borrow including any additional fees that have been added.
The UK 's core interest rate which is set by the Bank of England.
A temporary loan that enables you to complete the purchase of a new home before completing the sale of your existing property.
These mortgages have a ceiling above which your payments will not rise.
The point at which the money to buy your new home is released to the seller and ownership is transferred to you.
Legal document which transfers ownership of unregistered freehold land.
The fees your solicitor has to pay such as; stamp duty, land registry, search fees, etc which will be added to your solicitor's bill.
Discounted Variable Rate
For a set period the interest rate charged will be a set percentage less than the standard variable rate.
Early Redemption Charge
If you repay your mortgage in full before a specified date you may be asked to pay an early redemption charge.
The difference between the value of your property and the amount of any outstanding loans secured against it.
These mortgages offer a fixed interest rate for a set period of time.
The term used to indicate ownership of property and the land on which it stands.
Interest Only Mortgage
With this type of mortgage, the payments you make each month simply pay the interest on the amount you borrow. At the end of the mortgage term you must pay back the amount you originally borrowed.
This is a record held by HM Land Registry which lists the registered owner of a plot and any legal charge that may be placed on it.
A document, which grants possession of a property for a fixed period of time and sets out the obligations of both landlord and tenant such as; payment of rent and repairs.
Arrangement between a landlord and tenant where the landlord agrees for the tenant to lease the property for a fixed period of time.
The legal document held by the Land Registry that identifies who has a claim on your property.
A loan you take out to buy your home.
Legal document that you must sign to say that the lender has a legal charge over your property.
Mortgage Payment Protection Insurance
This is an insurance that will cover your mortgage payments should you be unable to work due to an accident, illness or involuntary redundancy.
Person who borrows money to buy a property.
Building society, bank or other company which lends money against the security of a charge over the property purchased.
This is the official letter that the lender sends to you once all the referencing and valuations have been carried out satisfactorily.
Document that illustrates the cost of your mortgage.
These are the charges that some lenders make if you decide to move your mortgage.
When a borrower fails to pay back their loan in accordance with its terms and conditions, the lender can exercise their legal right to take ownership of the property.
The payments you make each month will pay off the interest and an element of the capital.
This is the amount to be repaid to your existing lender when you move your mortgage.
This is the charge made by some lenders when they release the legal charge over your home.
Enquiries made at the Land Registry, the Land Charges Register and Local Authorities to ensure there is nothing to cause concern about title to the land.
A government tax on the price you pay for your home.
Standard Variable Rate
This is the normal variable rate charged by a lender. This rate can go up or down at any time at the lender's discretion.
Subject to Contract
A provisional agreement made between buyer and seller, before exchange of contracts, which allows either side to back out without penalty.
Length of time over which your mortgage loan is to be paid.
Legal right to ownership of a property.
Legal document which transfers ownership of registered land.
This is a report produced on behalf of the lender. Lenders use this to decide whether they will offer a mortgage on the property.
A fee paid by the borrower for the lender's inspection of the property.
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About the Author
Home Loans and Mortgages ? Watch Out for Dangerous Subprime Loans
With the growing interest in real estate purchasing and speculation, more and more lenders are offering "nontraditional" types of mortgages. These include adjustable rate mortgages (ARM) of every shape and size, the more popular interest-only mortgage, and the very dangerous Option ARM mortgage, which can cause the amount you owe to actually increase as time passes. One rapidly growing sector of the lending market is the so-called "subprime" market, which caters to consumers with poor credit records. The subprime market is a profitable one, as lenders offer loans to consumers whose poor payment history targets them as risky clients. Yes, they are risky clients, but the lenders charge fees and interest rates that are high enough to offset the additional risk. People who are interested in purchasing a home should be careful, however, as many people who should qualify for traditional loans are being pushed into higher-priced subprime loans instead.
Why a Mortgage Professional Beats a Banker Every Time -- The Story Tells It All
The best way to explain why a mortgage professional is always better than a banker is to use an anecdote. My parents lived in the house I grew up in for 35 years, so it was finally time to move. They found a home they liked, made an offer, and signed a purchase agreement. After conferring with me, they decided to go to a bank ? one of the more well-known mortgage banks in the region. Of course, I thought a good mortgage professional would be better, and I told them I could follow the deal from start to finish, if they went with a company I previously worked for, but the bank they decided on offered a little better rate and lower fees, so they wanted to go with them.
Guide to Interest Only Mortgages
Here is a useful guide to interest only mortgages. An interest only mortgage is one where your regular payments only go to pay off the interest on the money you borrow. You will invest to pay off the capital sum at the end of the mortgage term.
Know Your Mortgage Options
While trying to find the lowest rates, many homeowners fail to examine the type of mortgage, and which type of mortgage is best suited to their needs. Whether you are buying a new home or refinancing, it is important to understand the different mortgage types, and evaluate which one best meets your needs.
Securing a US Commercial Mortgage
What's the most efficient way to secure a US Commercial Mortgage? Work with a mortgage broker who specializes in this area. If you've ever applied for a loan, you're familiar with the mountain of paperwork you are required to complete during the process. The lender takes the applicant's information, runs it thought their guidelines and formulas and after waiting many weeks, a decision is made to either approve or deny the loan. If approved, the transaction can proceed. If denied, the applicant has to begin the process all over again.
New Home Loan - Understand The Various Types Of Mortgage Lenders
So, you've decided to buy a house, and you're ready for that all important next step-applying for a mortgage loan. But where should you go? After all, the mortgage business is complex, and you've realized quickly that your choices for lenders are immense. Here's a quick guide to help you understand all of your choices for lenders.
Understanding Mortgage Points
When a mortgage broker asks a borrower to pay points, he or she is asking for a lending fee expressed as a percentage of the value of the loan. For example, two points on a deal worth $100,000 works out to $2,000.
Should You Refinance Your Mortgage if Interest Rates Drop?
Mortgage refinancing is when you take a mortgage of a certain interest rate and term length, and change it for a different interest rate and term. If you are looking to refinance your home loan it is usually done when rates have dropped considerably therefore making it advantageous to do so. When I say considerably it usually means a drop of at least 1% from what you're paying now.
Reverse Mortgages Learn The Facts First!
Reverse Mortgages, Most Common Features:
Home Loans -- Federal Regulators Warn Lenders to Be More Careful
Federal banking regulators have recently expressed some concern over the housing market as home prices in the United States have risen to record levels. While homes are more unaffordable than ever for many people, the lending market remains strong, mostly because of the introduction of new, ever-more-flexible types of loans. While these newer loan types, such as the interest-only loan, make buying a home easier for some borrowers, they also propose a greater risk to the lender.
What is a Self-Certification Mortgage?
A Self-Certification mortgage is a mortgage designed for people who are unable to provide proof of income. This type of mortgage was originally designed for the self employed who historically experienced difficulty obtaining a loan with 'high street' lenders due to not having audited accounts available.
FHA Home Mortgage Purchase or Refinance Loan - Why You Might Consider Getting an FHA Loan
Most borrowers have heard of FHA home loans. They are very common. You hear about them mostly as loans for first time borrowers, which is common. However, most people don't realize that FHA loans can also be does for refinancing. They are not only for purchasing a house.
How do I know what is the best Second Mortgage Home Loan for me?
The information in your credit history helps mortgage lenders decide how much credit and what interest rate you are eligible for, and then match it to a bad credit home loan. The better your credit history, the more likely you are to qualify for the best credit deals. The first step is to understand if you are considered a credit risk. Most lenders will consider you a higher credit risk only if your credit report states that you have more late and slow payments than what is shown below:
Refinance Your Mortgage to Rebuild Credit
Refinancing your mortgage is one way to rebuild your credit, particularly if you have recently declared bankruptcy. With a poor credit history, you can find refinancing through a sub prime lender. To rebuild your credit, make regular payments on your mortgage and other bills. Then after two years, refinance again for lower rates with your now good credit rating.
Buying A Home After Bankruptcy - Get A Mortgage Loan After Bankruptcy
If you have a recent bankruptcy on your credit and are looking to get financing for a home, there is hope. Buying a home with bad credit will just put more emphasis on the other two factors needed to get a mortgage loan, which are; income verification and a down payment.
Real Estate Tip: Escrow Accounts -- Do You Really Need Them?
If you have a mortgage on your property, whether it's for your personal residence or a real estate investment, chances are you have an escrow account. But if you are working on building wealth through real estate, you may want to take a hard look at your escrow account (or accounts, if you own more than one piece of real estate) and decide if you really need it.
Refinancing Online - Tips For Getting a Low Interest Rate When Applying Online
Refinancing online is a great opportunity to find low interest rates. Online mortgage lenders provide information about rates and fees for easy comparisons. However, to find the lowest interest rates, you will need to do more than just surf sites. The following tips will give you the edge in your refinancing search.
How to Find the Best Home Improvement Loan
If you're looking for the best home improvement loan for your money it can sometimes seem like an uphill climb. You may not know whether the offer that you've received is the best that you can get, or if you should try to find a better offer elsewhere? but you shouldn't let finding the best home improvement loan stress you out so badly.
Is It Time To Buy A House?
At some point as you're writing out your rent check, you get to the point where you look at the amount and think to yourself - at this rate, I could BUY a house. If you're fed up with paying rent every month that's high enough to finance a mortgage, it may be time to take a serious look at what it would take for you to get a mortgage loan and buy a home of your own. How do you know if it's time to stop renting and time to start investing your monthly payment in a house of your own?
A Guide to the Best Remortgage Deals
Finding the best remortgage deals isn't always easy, especially with the large variety of lenders available today. It can sometimes take a lot of research and time to locate the best remortgage deals for your home, though the end result is often worth it.
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