Final Reminder - If a customer is in arrears to the mortgage company the lender will send out a final reminder to that customer before commencing legal action against them.
First Mortgage Payment - The first mortgage payment will be higher than all the other payments. This is because the payment is not collected until after the loan has started and therefore carries with it more interest than future repayments.
Freehold - The property and accompanying land is owned outright by the purchaser.
Further Advance - This is a loan paid by the mortgage company to the borrower and is secured by the existing mortgage deed. This further advance loan may be used for any purpose.
Gazumping - This is when you have had an offer accepted by the seller and your offer is then turned down due to the late acceptance on the part of the seller of a higher offer from somewhere else.
Ground Rent - This is an annual charge paid by leaseholders to the freeholder.
Guarantor - If a borrower fails for any reason to pay their debt the person acting as guarantor becomes responsible for the debt having previously promised to pay for it.
Higher Lending Charge - This payment is to the lender and acts as an insurance policy against any inability on the part of the borrower to repay a loan when the amount lent is above a certain percentage of the value of the property.
Homebuyer’s Survey - This is a surveyor’s report paid for by the purchaser. It is less detailed than a full building survey.
Initial Interest - This is any payment due from and covers the period from the start date of the mortgage up to the date when the first payment is collected.
Interest Only Mortgage - In such a mortgage it is not the loan but only the interest that is repaid each month. At the end of the mortgage term the original capital balance remains.
Individual Savings Account ISA - This is the Government’s tax free saving scheme. By investing in cash savings, stocks and shares and/or life assurance one can make financial provisions for the future.
Insolvency Policy - An insolvency policy may be insisted upon when a property has been sold for less than its true value.
Land Registry Certificate - This document provides a plan and additional details of the property. A copy of the lease is included in leasehold properties.
Land Registry Fee - This is fee that is required to be paid to the Land Registry in order to register ownership of the property.
Leasehold - This is when outright ownership of a property remains with the freeholder and the purchaser gains only the right to possession, not ownership, for an agreed period of time.
Lender - This is simply the bank or building society providing your loan.
Lessee - The tenant – the person taking out the lease of a property.
Lessor - The landlord – the person providing the lease.
Life Insurance - An insurance policy intended to pay a lump sum on death. This is often taken out alongside a mortgage and so will provide adequate funds to repay the loan if the borrower should die during the term of the mortgage.
Loan to Value (LTV) - This is the size of the mortgage shown as a percentage of the value of the property or of its purchase price.
Local Authority Search - This can be carried out before purchasing a property and will provide the purchaser with information concerning plans for new road building, planning permission for buildings and previous works carried out etc. in the area around the desired property.
Mortgage - A mortgage is a loan taken out with property as the security. Within the law it has a more specific meaning.
Mortgagee - This is the lender who lends the money.
Mortgage Term - This is the agreed length of time over which the loan will be repaid.