What does it mean?

If there are any words in the site that make no sense, take a look through the list of terms here.

Advance
A mortgage loan.

APR
Stands for Annual Percentage Rate that helps you compare the cost of different mortgage deals. The way it is calculated is set down by the government and takes into account the amount of interest you will pay, the length of the term of the mortgage, and other charges such as any product fee.

Bank of England base rate
This is also known as the Bank of England's repo rate. This rate can go up or down from time to time and is announced by the Bank of England's Monetary Policy Committee.

Building insurance
Insurance against the cost of rebuilding or repairing a property following structural damage, for example by flood, fire, storm and subsidence.

Building survey
This is a technical report following an inspection of the property. It will give you a comprehensive account of the condition of the property, describing any structural or other defects.

Capped rate
Your interest rate won't go above a certain level the "cap" during the capped rate period. This means that you can enjoy any rate reductions, yet have the comfort of knowing that your rate won't go above the cap.

Cashback
Certain mortgage products offer cashback, which means you get a cash lump sum to spend on anything you want.

CAT standard mortgages
The Government has laid down CAT standards - fair Charges, easy Access and decent Terms - to help people identify mortgages which meet minimum standards. If a mortgage is described as meeting the CAT standards it doesn't mean that it is "Government approved" or necessarily right for you.

Chain
These are the property buyers and sellers that link together to make the chain for your purchase. The chain may consist of only two people i.e. you as buyer and the person you are buying from as seller or it may consist of several buyers and sellers. The beginning of the chain usually starts with a first time buyer or a buyer with nothing to sell and the end of the chain usually ends with a seller who is buying a brand new home or who is not buying another property. Your purchase can only proceed at the same pace as every one in the chain.

Company registration details
Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc, HBOS Investment Fund Managers Limited, Halifax Life Limited and Halifax Share Dealing Limited are authorised and regulated by the Financial Services Authority. They are entered in the Financial Services Authority's Register and their Register Numbers are 169628, 119223, 171881 and 183332.

Completion
The day on which a property becomes legally yours (known as settlement in Scotland).

Conclusion of Missives
The Scottish equivalent of exchanging contracts.

Contents insurance
A policy insuring household contents against theft and damage.

Conveyancer
A legal expert handling all documentation for the sale and or purchase of a property. This will be a solicitor or licensed conveyancer.

Conveyancing
The legal process involved in buying and selling a property.

Credit scoring
A technique used by the lender to assess the suitability of your application.

Daily interest
With this method of calculating mortgage interest, it is charged on the amount of mortgage outstanding from day-to-day. This means lenders take into account any changes in the amount you owe on a day-to-day basis.

Deposit
The money you pay on exchange of contracts as part of your initial contribution to the purchase of your home.

Disbursements
The various costs your conveyancers have to pay to other organisations and bodies on your behalf as part of the homebuying legal work. They include, for example, search fees and stamp duty/ land tax. Your conveyancer will itemise them on the invoice they send you.

Discharge Fee
You have to pay this to some lenders for releasing their mortgage over a property once you have paid off your loan.

Early Repayment Charge
With some mortgages you have to pay an early repayment charge if certain things happen. For example, if you pay off some or all of your mortgage, or you transfer to a different mortgage rate before the end of the special rate period.

Equity
The difference between the amount you owe on your mortgage and the current value of your property.

Exchange of contracts
The swapping of signed contracts between a buyer's conveyancer and a seller's conveyancer. Once you have exchanged contracts you are both legally bound to the transaction.

Financial Services Authority (FSA)
An independent body which regulates the financial service industry in the UK. Their aim is to help consumers become better informed about financial matters.

Fixed rate
A rate of interest guaranteed not to change over a fixed period of time.

Freehold
A form of legal title to land which means you are the absolute owner of the property and the land it's on.

Gazumping
This is where the seller sells to another buyer for a higher price, having agreed (subject to contract) to sell to someone else. This can only happen before exchange of contracts.

Gazundering
This is where the buyer lowers his offer on the property after agreeing a price. This can only happen before exchange of contracts.

Guarantor
Someone who guarantees to repay the mortgage if the borrower can't or won't for any reason. Guarantees are usually entered into where the borrower's circumstances would not allow them to borrow enough to buy the home they want. For example, parents may act as guarantors for their children when they buy their first home.

Higher Lending Charge
Fee or premium sometimes charged by lenders to protect them if your mortgage represents a high percentage of the property's value.

Household insurance
A way of referring to both buildings and contents insurance. Also called "Home Insurance".

Initial Disclosure Document
Initial Disclosure Document contains the information you will receive from a lender when you first contact them regarding a mortgage or related product. It informs you about the service you will receive, details whether you will receive advice and may help you to decide whether to use that lender.

Interest-only mortgage
You only pay interest to your lender throughout the mortgage term and your mortgage balance doesn't reduce with most interest-only mortgages. At the same time, you put money into a separate investment, which should grow and pay off the mortgage as scheduled. You must make sure you keep premiums up to date on any mortgage investment products.

Key Facts Illustration
A Key Facts Illustration sets out details of the mortgage product that a customer is interested in. All lenders are required to set out the details in a Key Facts Illustration in the same format, so it's easier for you when you want to compare mortgages.

Land Registry Fee
You pay this to register your details in the Land Registry records once you've bought a property or changed your mortgage lender. Your conveyancer will arrange this for you.

Land Registry Search
The conveyancer will make searches at the Land Registry to check matters affecting the property and to get up to date copies of the Land Registry entries that relate to the property. On completion the conveyancer will send the deeds to the Land Registry who will register the new owner and any new lender. The Land Registry charges a fee for searches and for registration of property.

Leasehold
This means you own a property for a set number of years. When the lease expires, the property returns to the freeholder. Flats are commonly sold as leasehold.

Life Assurance
A form of insurance by which someone's life is insured. Life assurance policies can run parallel with a repayment mortgage, so the mortgage will be repaid if you die before the end of the term.

Local authority search
Part of the conveyancing process when you buy a property, carried out by your conveyancer. It gives details of any matters which, from the local council's point of view, affect the property. It reveals any proposed changes to the local area, such as road improvements, and details any planning permission given for the property.

LTV
This means "Loan To Value" and is the proportion of the value or price of the property (whichever is the lower), that you borrow on a mortgage. For example, a £63,000 mortgage on a house valued at £70,000 would mean a LTV of 90%.

Mortgage deed
A legal document establishing a mortgage on a property. This is called a standard security in Scotland.

Mortgage term
The length of time over which you agree to pay back your mortgage, up to a maximum of 40 years.

Negative equity
This is when the amount you owe on your mortgage is greater than the value of your property. It particularly becomes a problem if you want to move house.

Off Plan
Where a property is being bought at the planning stage and is yet to be built.

Premium
Amount you pay on a regular basis, usually for an insurance policy.

Product Fee
Lenders sometimes charge a fee to cover the work involved in setting up your mortgage or for certain mortgage rates.

Remortgaging
When you arrange a new mortgage on your home, with a different lender and use the new mortgage to pay off the old one.

Repayment Administration Fee
This fee covers the administration work involved in closing your mortgage account and processing any legal documentation when you redeem your mortgage early.

Repayment mortgage
Your monthly payments gradually pay off the outstanding capital balance on your mortgage as well as the interest.

Repo rate
This is also known as Bank of England base rate. See the definition of this term earlier in this glossary.

Retention
Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

Stamp Duty Land Tax
Government tax you have to pay based on the purchase price of a property worth £125,000 or more.

Structural engineer's report
A specialist report from a structural engineer on the condition of a property.

Survey and valuation
A property survey that includes a valuation and should reveal any major faults in the property.

Telegraphic Transfer Fee
This is a bank charge for sending money from bank to bank, usually required by your conveyancer.

Tracker rate
Tracker rates are usually linked to the Bank of England base rate. During the tracker rate period, any changes to the Bank of England base rate are passed on to you in full.

Valuation
Arranged by your lender to find out if the property is worth the amount you want to borrow and is suitable to lend a mortgage on.

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