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.
| Early Redemption Fee |
A charge levied by the lender as a penalty if a mortgage is paid off before the end of its term. Also known as Early Redemption Penalty. |
| Easement |
A Right of Way that allows persons other than the owner to access a property. |
| Employers Reference |
For mortgages and loans it is the written confirmation from a person’s employer stating the person’s earnings, length of service and level of permanency of the position. |
| Encumbrance |
Anything that has a limiting or detrimental affect on the ownership of a property, including, for instance, mortgages, leases, rights of way and easements. |
| Endowment |
A financial investment product that a person pays money into during the course of a mortgage. The proceeds of which are used to pay off the mortgage loan at the end of its term or give a lump sum if not linked to a mortgage. The policy also provides life cover for the owner. Part of the monthly payment goes to the life cover, part goes to investment. The proportions are set at purchase and this affects the performance of the savings portion of the product.
There are various types of endowment and the sale of the inappropriate endowment to type of customer has led to scandals. |
| Endowment Mortgage |
A mortgage in which the borrower only repays the interest on the loan for the term of the mortgage, then repays the loan amount at the end of the term. The borrower pays into an endowment product during the course of the mortgage and then uses the proceeds to pay off the original loan at the end of the term. PLEASE SEEK INDEPENDENT FINANCIAL ADVICE BEFORE TAKING OUT ANY ENDOWMENT POLICY. |
| Equifax |
One of the leading credit reference agencies in the UK |
| Equity |
The amount of money either put into buying a property or the deposit placed on a property. Also known as capital. |
| Equity Release |
A mortgage taken out on a home that is already fully owned, typically in order to make use of the capital tied up in it. |
| Estate |
A legal term referring to the sum total of all the property and personal assets owned by an individual at the time of their death. |
| Estate Agency Fees |
The amount the estate agent charges the person selling the property. Normally equates to a percentage of the sale price. |
| Eviction |
The legal expulsion of an occupant from a property. |
| Examination of Title |
The report that details the title of a property, usually taken from the public records or an abstract of the title. |
| Excess Payments |
See overpayments |
| Exchange of Contracts (excludes Scotland) |
The stage in the purchase process at which the buyer and seller confirm legally binding commitments to the sale, and agree on the terms and conditions of that sale. |
| Existing Liabilities |
Your financial outgoings, such as loan repayments, regular fees, or child maintenance, before taking out a mortgage. Borrowers are obliged to disclose all such outgoings as part of the mortgage application process. |
| Expatriate |
A person working in a country that is neither their country of birth nor nationality. |
| Experian |
One of the leading credit reference agencies in the UK |
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).
