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Liability This relates more to commercial mortgages. With a commercial mortgage liability for repayment of loan depends on legal structure of business:
A sole trader will be personally liable for mortgage debt. Personal assets could be seized if business defaults. Partners are jointly liable for debts of partnership and their personal assets are at risk With a limited-liability partnership and a limited company, liability falls firstly on business rather than on individual partners and directors. The lender may take a floating charge on business assets in general, rather than simply on current property being purchased. The lender may also insist on personal guarantees as a condition of granting loan, in which case partners and directors may be held personally liable anyway.
Life insurance If you have a joint mortgage, life insurance can be acquired that will see mortgage paid of should one of you pass on.
LTV (Loan to Value) The size of mortgage as a percentage of value of property i.e. A £90k mortgage on a house valued at £100k would mean an LTV of 90%.
MIG (Mortgage Indemnity Guarantee) A one off payment made when you set up a mortgage a kind of insurance policy for lender. This offers them protection against value of home falling to less than mortgage. It is generally only charged to borrowers with a less than 10% deposit, but this can vary.
Mortgage A loan to buy a property where property is used as security against you paying back loan.
Mortgagee The company or organisation that lends you money.
Mortgagor The person taking out mortgage.
Non-Status Where a lender may not require income details from you or may accept some previous poor credit history i.e. CCJ's or previous mortgage arrears.
Payment Holiday A period during which borrower makes no mortgage payments.
Regulated tenancy A legal right to live in your accommodation for a period of time. Your tenancy might be for a set period such as a year (this is known as a fixed term tenancy) or it might roll on a week-to-week or month-to-month basis (this is known as a periodic tenancy).You are a regulated tenant if you moved in before 15 January 1989, you pay rent to a private landlord and your landlord does not live in same building as you.
Remortgage The taking on of a second mortgage to pay off first. The most common reasons for doing this are that another mortgage is available at a better rate or that value of property has gone up allowing for opportunity to borrow more money against property.
Right to Buy For example, a tenant in a council owned property may purchase property at a discount depending on length of their tenancy.
Self Certified Generally when a borrower applies for a mortgage he or she will be asked to provide pay slips or company accounts to prove their income. If it is difficult or inconvenient for you to provide this evidence, you can choose to self-certify your income. This involves signing a declaration which states your income sources and amounts. Lenders will charge you higher rates than average and offer you a more limited range of mortgages if you choose to self-certify your income, in general it's not a good idea to self-certify just to avoid some paperwork.
Stamp Duty Tax paid by buyer of a property set at 1% for properties over £60k, 3% for properties over £250k and 4% for properties over £500k.
Structural survey The most wide ranging check of structure of a property. This is carried out by professional surveyor and should uncover any defects or faults with building.
Tenancy A legal written agreement between a landlord and tenant that sets out terms of rental.
Term The period of years over which you take mortgage and repay it.
Term Assurance An insurance policy designed to repay mortgage on death of insured person. Level Term Assurance covers a principal sum throughout policy term and pays out full amount on death. Reducing Term Assurance is designed to repay balance outstanding on a repayment type mortgage upon death. Term Assurance may also pay out early on diagnosis of a terminal illness.
Underwriting The process of evaluating a loan application to determine risk involved for lender. This involves an analysis of borrower's creditworthiness and quality of property itself.
Unencumbered Where property is owned outright and no mortgages or loans are secured against it.
Valuation A simple check of property in order to find out how much it is worth and whether it is suitable to secure a mortgage against.
Valuation Fee The fee paid by a borrower to cover cost of lender checking that property is suitable security for mortgage.
Variable Rate A type of interest rate lender can charge. It goes up and down and your repayments change accordingly.
Vendor The person selling property.
Commercial Lifeline are Independent UK based Commercial Mortgage Brokers.
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