The length of time that the loan is set over. The mortgage needs to be repaid in full by the end of the mortgage term. Commonly, the mortgage term is set between 25 to 30 years, however you are able to go up to 40 years. The longer the term, the more interest you will pay, but the less the monthly payments will be.
When you are applying for a mortgage it can be hard to understand all the terminology and abbreviations. Here is a guide to some of the more common words you will come across.
Provided to you by a lender, confirming ‘in principle’ what they will allow you to borrow. This can be provided to agents and sellers to show that you can afford their property.
APR means the Annual Percentage Rate and APRC is the Annual Percentage Rate of Charge. These are both used to compare the overall cost of a mortgage. APR compares the cost of the mortgage for the initial fixed period (for example, the first two or five years) whereas the APRC is the overall cost of the mortgage should you pay it for the full term of the mortgage period (for example, 25 year term). A broker would use these to recommend the best mortgage, based on the initial term and the overall term and make their recommendation based on this information.
Automated Valuation Model, also known as a desktop valuation. The lender instructs their preferred surveyors to confirm the value of the property without the need to physically go to the property. Surveyors will base their valuation on recent sales and other recent valuations. You will not receive a copy of the valuation if an AVM is carried out.
Lenders will often charge an arrangement fee to set up your mortgage. You can choose to pay this up front or add the arrangement fee to the mortgage. If you choose to add the fee you will pay interest on the fee over the term of the mortgage. Your broker will compare products with and without fees and recommend the best deal for you.
If you do not pay your mortgage on the date that has been agreed each month, you will fall into mortgage arrears. Should you not be able to pay your mortgage for any reason, contact the lender immediately to discuss your circumstances.
Set by the Bank of England, this is the UK’s rate of interest. Lenders will set their Standard Variable Rate (SVR) above the Base Rate, normally setting their variable and tracker mortgages between 2-5% above the Base Rate.
A fee charged by your broker to arrange your mortgage and submit the application.
Hear what our clients have to say
Emma - Thanks for all of your help, you have both been an absolute pleasure to work with, I would definitely recommend Start Mortgages to anyone.More Testimonials
We would like to say thank you for your support in getting this mortgage to the finishing post, and making things as easy as possible, especially when the end date had to be extended. We really ...More Testimonials
Emma - Very knowledgeable and friendly, we felt you went the extra mile. Thank you very much.More Testimonials
I felt that Lee was very professional and knew what he was talking about, excellent service.More Testimonials
Emma has been superb throughout our whole process. She is professional, friendly, patient but most of all excellent with her advice, work and communication. Quite frankly she is amazing and is the ...More Testimonials
I really wanted to thank both Karen and you, Alison for everything you've done. I love working with you both and you've both been so helpful throughout.More Testimonials