Adverse Credit & Problem Remortgages

from Shorething Mortgages

It's all a load of jargon!

As an added measure of customer satisfaction, we have provided you with a jargon buster which is aimed at helping you comprehend the difficult language associated with the financial services, and in particular, the mortgage field. We tend not to use such language on our site, as we solely act as an interface between the public, and the lenders - but we understand how complicated lenders websites and documentation can be.

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Advance
The actual mortgage/ loan.

Annual Percentage Rate (APR)
This figure considers all fees, interest amounts and other charges which must be paid over the course of the mortgage/loan. The rate is particularly useful as it is always calculated in the same way, hence, is a good comparison tool. The higher the APR, the more you should expect to pay - i.e., an APR of 9.8% will cost more than an APR of just 7.9%.

Arrangement Fee
A lender may charge an Arrangement Fee to cover the costs of setting up your mortgage. Shore Thing Mortgages do not charge such fees for our service. You should expect to pay nothing whilst using us.

Arrears
Mortgage or rent payments which have not been paid by the date agreed in your contract.

Bankruptcy
An order made under the Insolvency Act 1986 which signifies that the individual who is unable to pay his/her debts, must cease trading, and cannot act as a company director.

Base Rate
Reviewed on a monthly basis, the Base Rate is the rate of interest set by the Bank of England.

Buy to Let
Purchasing a property in order to rent it out.

CCJ
A County Court Judgement (CCJ) for a debt in the County Court. If you have not settled the debt in full within 28 days of the judgement, your CCJ will appear on every credit search made about you within the next six years. If the debt is setled later than the 28 days of the judgement, it will be shown in the register as being satisfied as long as the credit agency receives a satisfaction certificate.

Completion
The concluding step when buying or remortgaging a property.

Conveyancing
The legal process of buying and selling a property.

Credit Check
An enquiry carried out in order to discover your credit status, showing details of credit history and credit arrangements you may have with other organisations. Two of the largest UK credit reference agencies are: Experian, Consumer Help Service, PO Box 8000, Nottingham, NG1 5GX (tel: 0870 241 6212) and, Equifax, Credit File Advice Centre, PO Box 1140, Bradford, BD1 5US.

Defaults
Defaults are credit payments made, that haven't reached the creditor's payment requirements. If not dealt with, defaults can lead to CCJs.

Discount Rate
The lender sets a variable rate for you to pay for a period (usually less than their standard variable rate) of time, and then after this period, you can usually expect to pay the lender's standard variable rate.

Early Repayment Charge
If you pay all or part of your mortgage off before you are scheduled to make that payment, an Early Repayment Charge may apply.

Endowment
Often linked with a mortgage, an Endowment is a savings and investment policy which sets out to produce a lump sum at the end of an interest only mortgage, which is then used to pay off the capital.

Equity
Equity is the amount of money left when you subtract your outstanding mortgage and any other secured loans from the current value of your property.

Fixed Rate
The interest rate of your mortgage remains constant over a set period of time regardless of the rate set by the Bank of England.

Freehold
The ownership of a property and the land which it is set upon.

Higher Lending Charge
If you take out a mortgage which has a high loan-to-value ratio, you may be charged a higher lending charge.

Individual Voluntary Arrangement (IVA)
An IVA is seen as a more reasonable alternative to bankruptcy. Your creditors work with you in an attempt to find a means of moving forward out of the situation, rather than having to deal with the situation surrounding bankruptcy. The IVA allows you to pay the whole debt, or at least part of it, over a period of time.

Leasehold
You are permitted to reside on the land for a set period of time, even though you own the property.

LIBOR
The 'London Interbank Offered Rate' is the rate at which banks borrow and lend money to each other.

Loan to Value
The Loan to Value is a percentage which signifies the amount you have chosen to borrow, against the value of the property. If you have a mortgage of £60,000, with a property valued at £100,000, the Loan to Value (LTV) would be 60%.

Mortgage
A mortgage is a loan secured against the value of your home.

Negative Equity
If your home is worth less than the value of the outstanding loan secured on it, you have Negative Equity.

No Credit History
If you have No Credit History, lenders are unable to assess whether or not you are a reliable payer, and so, you may find it difficult to obtain credit or a mortgage.

Remortgage
A mortgage taken out on your existing home, rather than moving house.

Repossession
A lender can repossess your home if you fail to keep up repayments on your mortgage, to enable them to recover the debt owed, by selling the property.

Right to Buy (RTB)
You may be able to buy your council house for a price lower than market value, under the Right To Buy scheme, dependant on the length of time you have been a council tenant.

Self Certified
Designed to help those who are self-employed or may have trouble declaring their income. The lender chooses whether or not to provide the applicant with a mortgage after he/she declares their earnings (they do not have to prove them). Also, people who earn a high percentage of their earnings through commission can also apply for a Self Certified mortgage.

Self Employed
An individual businessman/woman operating as a sole proprietor, partner in a partnership, independent contractor or consultant.

Stamp Duty
A tax added to property purchases by the government. Stamp duty is charged at 1% of the price of properties between £125,001 - £250,000, 3% for those between £250,001 - £500,000 and 4% for properties over £500,001.

Valuation
An estimation to the value of the property which confirms that the property has suitable security for the lender.

Variable Rate
Mortgage payments alter in conjunction with the base rate set by the Bank of England. The actual variable rates of interest change from lender to lender, as they set their own standard rates.

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