Clarke has been fantastic at helping me secure my first mortgage. I may have required some slight hand-holding but she was more than happy to walk me through the application and for this I must thank-you for all of your time and efforts Clarke, I will be highly recommending your services!
Use this guide to understand the terms and language used regarding mortgages and property financing.
Mortgage Basics
Mortgage
A loan used to buy property, secured against the home itself. If repayments are not maintained, the lender can repossess the property.
Loan to Value (LTV)
The percentage of the property value that you borrow. For example, a 90 percent LTV means a 10 percent deposit and 90 percent mortgage.
Deposit
The upfront cash you contribute towards a property purchase. In the UK, deposits typically range from 5 percent to 40 percent of the property value.
Equity
The portion of the property you own outright, calculated as the property value minus the outstanding mortgage.
Capital
The original amount borrowed on a mortgage, separate from interest.
Mortgage Types
Fixed Rate Mortgage
A mortgage where the interest rate stays the same for a set period, giving predictable monthly payments.
Variable Rate Mortgage
A mortgage where the interest rate can change over time, usually influenced by the lender or wider market conditions.
Tracker Mortgage
A type of variable mortgage that follows the Bank of England base rate plus a fixed margin.
Interest-Only Mortgage
You only pay the interest each month, with the full loan repaid at the end of the term.
Repayment Mortgage
Monthly payments cover both interest and part of the loan, meaning the mortgage is fully repaid by the end of the term.
Buy to Let Mortgage
A mortgage used to purchase a property that will be rented out rather than lived in.
Remortgage
Switching your existing mortgage to a new deal, either with the same lender or a different one, often to secure a better rate.
Application Process
Agreement in Principle (AIP)
An indication from a lender of how much they may be willing to lend based on initial checks.
Mortgage Application
The formal process of applying for a mortgage, including full financial checks and documentation.
Mortgage Offer
The official confirmation from a lender that they will provide the mortgage under agreed terms.
Underwriting
The lender’s detailed assessment of your finances, credit history, and affordability.
Affordability Assessment
A review of your income, expenses, and financial commitments to determine how much you can borrow.
Costs and Fees
Arrangement Fee
A fee charged by the lender for setting up the mortgage, sometimes added to the loan.
Valuation Fee
A cost for the lender’s survey to confirm the property’s value is suitable for the loan.
Stamp Duty
A government tax paid when purchasing property above certain price thresholds.
Conveyancing Fees
Legal costs associated with transferring property ownership.
Early Repayment Charge (ERC)
A penalty for paying off your mortgage early or switching deals during a fixed period.
Exit Fee
A fee some lenders charge when your mortgage is fully repaid.
Interest and Rates
Interest Rate
The percentage charged by the lender on the amount borrowed.
Standard Variable Rate (SVR)
The lender’s default interest rate, which can change at any time.
Bank of England Base Rate
The benchmark interest rate set by the Bank of England, influencing mortgage rates.
APRC (Annual Percentage Rate of Charge)
A measure of the total cost of a mortgage over its full term, including fees and interest.
Property Purchase Process
Conveyancing
The legal process of transferring ownership from seller to buyer.
Exchange of Contracts
The stage where contracts are legally binding and both parties commit to the transaction.
Completion
The final step when funds are transferred and ownership changes hands.
Chain
A sequence of linked property transactions where each depends on the others completing.
Survey
An inspection of the property to assess its condition and identify any issues.
Credit and Financial Profile
Credit Score
A rating that lenders use to assess how reliable you are at repaying debt.
Debt to Income Ratio
A measure of your total debt compared to your income, used to assess affordability.
Arrears
Missed mortgage payments, which can lead to penalties or repossession if unresolved.
Protection and Insurance
Life Insurance
A policy that pays out a lump sum if you pass away, often used to cover the mortgage balance.
Critical Illness Cover
Insurance that pays out if you are diagnosed with a serious illness covered by the policy.
Income Protection
Provides a regular income if you are unable to work due to illness or injury.
Buildings Insurance
Covers the structure of your property against risks such as fire or flood.
Contents Insurance
Protects personal belongings inside your home against theft or damage.
Advanced and Useful Terms
Negative Equity
When your property is worth less than the remaining mortgage balance.
Overpayment
Paying more than your required monthly mortgage amount to reduce the loan faster.
Term
The length of time over which the mortgage is repaid, often 25 to 35 years.
Product Transfer
Switching to a new mortgage deal with your existing lender.
Whole of Market Broker
An adviser who can access a wide range of lenders and products rather than being tied to one provider.
Providing a better service
Our aim is to provide you with the best service possible, maintaining complete transparency along the way.
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I find the entire mortgage process confusing and long winded. Dean explains and handles things in a very simplistic way, meaning that the hard work is done for me. He is personable and always available no matter how many times I need to contact him to ask annoying questions!
I have used Dean’s Services for several years now, and I am looking forward to working with him again in the future.
Would highly recommend Dean as a mortgage advisor. Explained everything really well, made sure we were happy with our choice and sorted out our insurances as well. The whole process and application was straightforward and easy with his help.
Dean sorted out our mortgage, home and life insurance for us and couldn’t fault him. Quick to respond and worked around us. Found us the best deals and rates. Took the stress of us and arranged everything for us and also was there anytime to contact sorb any questions. Lovely guy and made us laugh and had some banter. Will 100% recommend and will be using Dean again in the future for all our other re mortgages to come and any questions. Also must add very affordable. Thanks so much!
This is my first time applying for a mortgage and Clarke has been extremely helpful in every step of the process. He is always responsive, incredibly patient, and very clear in explaining the process. I would definitely recommend and would definitely work with Clarke again for my next mortgage!
Marcus has been a great help in my house-buying process; he is very knowledgeable and has advised me well with both the mortgage application process and also dealing with solicitors and insurance. He has always been quick to respond both over email and phone. I would fully recommend his services to anyone in the property market!
Kayleigh was very supportive and helped us find the best deal in the market! would highly recommend.
Marcus has been unbelievably helpful and reliable in advising me with my mortgage. He has been able to find me the best deals for nearly two years now and I would not go with anyone but him!