Opinion and guidance
Jargon buster: Decoding the mortgage application process
Do you know your SVR from your LTV? Embarking on the journey to buying your first home means you’re likely to stumble on words and terms you wouldn’t use every day.
Let’s decode the acronyms, abbreviations and terminology with our mortgage jargon buster
Base rate – the benchmark interest rate set by the Bank of England. It influences lender interest rates for things like mortgages and loans
Broker – a professional adviser who can help you find a mortgage
Conveyancer – solicitors who handle the legal aspects of purchasing a property
Credit Reference Agency (CRA) – organisations that store data about your credit history that helps determine your credit score
Credit report – a statement that includes a history of your borrowing experience – including details of any missed payments – and your current credit status
Credit score – a 3-digit number that represents your credit risk, based on your credit report. The higher the score, the better
Early Repayment Charge (ERC) – a charge imposed by a mortgage lender if you pay off/overpay your mortgage before it ends
Equity – the percentage of your home that you own
Loan to Value (LTV) – the amount you borrow for your mortgage versus the value of the home you’re buying
Market value – the estimated value of a property based on current market conditions
Mortgage Agreement in Principle – how much the lender agrees you could borrow before applying for a mortgage
Remortgage – switching your existing mortgage to a new lender or product with different terms
Stamp duty – tax paid on a property purchase above a certain price threshold
Standard Variable Rate (SVR) – the default interest rate set by a lender after the deal period for a mortgage tracker or fixed rate ends
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