Below is a glossary of the terms you may not be sure about now and should understand when taking out a new mortgage. These are not legal definitions but clear everyday descriptions to help you make a more informed choice.
Any examples given are designed solely to simply illustrate the basics of the concept and are not to be taken as anything beyond that.
A lot of mortgage adviser regularly used terminology were banned in October 2004 and replaced by industry standard phrases to help consumers understand things better. The old terms have been included for reference purposes.
No information given here should be taken as advice.
| Daily Interest Mortgages |
A mortgage in which interest is calculated daily, as opposed to monthly or annually. |
| Debt |
An amount owed by one person or party to another. |
| Debt Consolidation |
A procedure by which a number of loans, each with individual interest rates, are collected together in a single debt and at the lowest of the individual interest rates. For instance, if you had a £2000 hire purchase debt at an interest rate of 10%, and a £10000 loan at an interest rate of 5%, consolidating the debt would leave you with a total debt of £12000 at an interest rate of 5%. |
| Decreasing Term Assurance |
The normal type of life assurance sold along side a capital repayment mortgage. It is “what it says on the tin” – as time goes on, the amount it pays out goes down. This form of insurance should only be used where the amount of protection in the event of death goes down over time, e.g. a loan, a mortgage |
| Deed |
The legal document that sets out your ownership or title to a property. |
| Deeds Release Fee |
A fee charged by a lender, usually at the end of a mortgage term, to cover the administration involved in returning the deeds (property ownership documents) to your solicitor. |
| Default |
The failure to keep up with mortgage repayments on a regular or adequate level. |
| Deferred Interest Mortgage |
A mortgage in which some or all of the interest is not paid for a specified period, usually at the start of the term. |
| Deflation |
A situation in which prices are falling. (The opposite situation to inflation) |
| Deposit |
In relation to property, deposit usually refers to the amount of money paid by the borrower as part of the purchase. Typically this will be about 10%, with the rest of the purchase funded by a mortgage. |
| Depreciation |
The decline or reduction in the value of a property caused by changes in market conditions. (The opposite of appreciation) |
| Disbursements |
The expenses - usually administration and legal costs - related to the conveyancing of a property. These typically include stamp duty, search fees, land registry fees, chaps fees, local council fees. Disbursements do not include the solicitor’s fee for any legal work carried out. |
| Discharge Fee |
The fee charged by lenders at the end of a mortgage term to cover the administrative costs of transferring the property ownership documents to the borrower. |
| Discharged Bankrupt |
A bankrupt can be relieved of the status by a court of residual liability, usually after a certain number of years. The former bankrupt assumes the status of 'discharged bankrupt' and is able to apply for credit again. |
| Discounted Period |
With a discounted rate mortgage, the discounted period refers to the length of time that the discounted rate is levied. This can range from 6 months to several years. |
| Discounted Rate |
A lower level interest rate, usually levied for a specified period, than the standard variable rate. The discounted rate typically applies at the start of the term of a discounted rate mortgage. |
| Draw Down Facility |
The facility by which borrowers may increase the level of their debt up to specified limits and at specified times. |
Your home may be repossessed if you do not keep up repayments on your mortgage.
The actual rate available will depend on your circumstances. Ask for a personal illustration.
Think carefully before securing other debts against your home.
There will usually be a fee charged when we successfully arrange a mortgage / re-mortgage. The amount will depend on the complexity of your requirements and your personal circumstances, typically the fee charged will be 3% of the mortgage advance (minimum fee £3,000 up to a maximum of £10,000).
