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.
| Schedule of Payments |
Schedule of payments under a loan or mortgage agreement |
| Sealing Fee |
See discharge fee |
| Searches |
Checks carried out by a solicitor or licensed conveyancer with local authorities and other organisations to ensure that there are no planning proposals or other matters that could adversely affect the value of the property. |
| Second Charge |
The subsequent charge to the First Charge. See secured loan. |
| Second Home |
An alternative to your main residence which is subject to capital gains tax. |
| Second Jobs |
Sources of income other than main employment |
| Second mortgage |
A mislabel for a secured loan |
| Secured Loan |
A loan that is secured on an asset, e.g. cars, houses etc. In the event that the borrower fails to repay the loan in the agreed manner the lender is able to sell the asset to recover the monies owed. |
| Security |
The asset charged to the lender by the borrower. |
| Security Address |
The address of the property which is being offered as collateral for the mortgage or remortgage. |
| Self – Certified |
A declaration signed by an employed applicant confirming their income. Some sort of proof of income will be required. |
| Self - Declaration |
A declaration signed by a self-employed applicant confirming some information normally without the requirement of evidence. |
| Self Employed |
A person who operates as a sole trader or in a partnership, such as small retailers or professionals such as accountants or dentists. |
| Semi Status |
A term used to describe an applicant with limited to medium adverse credit. |
| Self Build Mortgage |
A mortgage that is taken out on a property still under construction. Typically the lender will only pay out the loan in stages, corresponding to the completion of various stages in the construction. |
| Self Certification |
A mortgage whereby the borrower provides confirmation themselves of their income, rather than from an employer or company accounts. Typically the lender will charge higher rates of interest, or require a larger deposit. |
| Semi-commercial |
A property that has at least part commercial use. This does not mean the study in the other bedroom. E.g. a shop with a flat above it. |
| Settlement |
The Scottish equivalent of Completion or legal completion, not to be confused with “settlement figure” |
| Settlement Figure |
The amount required to repay a loan or mortgage early. This information is provided by a lender and will include any early repayment charges. |
| Shared Equity |
A scheme whereby a person purchases part of a property and the other part is held by a developer. E.g. 95% of the purchase price to be paid on completion and the other 5% to be paid at some stated time in the future. The builder will normally register a second charge on the property until the remaining 5% has been paid. The 5% owing may be on an interest free basis or interest may accrue and be added to the debt. Unlike shared ownership, there is not normally a monthly payment commitment. |
| Shared Equity Mortgage |
A mortgage designed to enable a purchaser to purchase their property in stages from a developer. |
| Shared Ownership |
A scheme similar to shared equity, but in which the second part of the property is owned by a housing association. Also known as co-ownership, this arrangement is designed for people who could not otherwise become homeowners. Under most arrangements, the minimum purchase amount is 25% of the property value with the remainder available to be purchased in blocks of 25%. |
| Shared Ownership Mortgage |
A mortgage designed to enable the purchaser to purchase their property in stages from a housing association |
| Sitting Tenant |
A person currently renting and occupying a property, and who is legally protected against being removed. This person has a legal right of occupation, even if the property changes ownership, and who is able to apply to the local authority to set a fair rent. Properties with sitting tenants are generally worth at least 30% - 40% less than their open market value with vacant possession. |
| Sole Occupancy |
A property that is occupied (lived in) by only the mortgage applicant(s) and their direct family. No paying tenants are in residence. |
| Special Conditions |
These are the conditions specific to your mortgage and are contained in your mortgage offer. |
| Special Status |
A person who is unwilling or unable to provide the necessary documentary evidence of income and status |
| Stabilised rate |
A mortgage where a notional rate is set designed to be a true reflection of the likely average rate over a period. The borrower makes payments each month based on this rate, but the rate charged to the account may vary in line with market conditions. These products are designed to protect borrowers from wildly fluctuating interest rates. Whilst highly popular in the late 1980s they became discredited when some lenders set unrealistically low notional rates resulting in borrowers' being faced with a considerable increase in the loan amount outstanding. |
| Stamp Duty |
A tax paid only by the purchaser of a property. The amount payable works on a sliding scale dependent upon the value of the property. A purchaser pays the tax on the full purchase price not just the portion above the various bands. |
| Standard Construction |
A building constructed using standard techniques such as bricks and mortar, tiled roof and cavity walls. A building not of this type may be more difficult to get a mortgage for. |
| Standard Variable Rate |
The default interest rate of the lender. This is usually in line with a stated index such as the bank of England base rate. A standard variable rate will rise and fall broadly in line with this. This rate is the rate that a special rate; such as a fixed, capped, or discounted rate, will revert to once the allocated time has ended. |
| Start-up Business |
Any business that does not have accounts dating back three years. |
| Stepped Rate Mortgage |
A mortgage where the interest rate charged rises in stages over time. |
| Structural Survey |
A thorough and detailed examination of a property carried out by either a surveyor or a structural engineer. This type of survey will normally provide a full and detailed description of the structure, list the defects and alert the recipient if a specialist report is needed, e.g. drainage, damp or subsidence report. This survey can be scary to read to the first time or inexperienced reader due to the number of caveats and cautionary remarks contained within; however it is the most comprehensive guide to a property. |
| Studio Flat |
A property that consists of one main room, plus usually a separate bathroom and sometimes a kitchen. Many lenders will not lend on these properties as they are considered more difficult to resell. |
| Sum assured |
The maximum amount payable under a policy of insurance. In the case of a life assurance policy this is the amount payable upon death. Under a general insurance policy it is the maximum amount that can be paid out in the event of a claim. The sum assured under a general policy must be adequate to represent the full value of goods at risk. If an insurer feels that a policyholder has not declared the full value of goods at risk and a claim occurs, the insurer may reduce the claim by applying average. |
| Survey |
Also see valuation-
If you are having a mortgage your lender will carry out a valuation of the property to ensure that the property is sufficient for their lending purposes.
This is not a detailed survey of the property and you are recommended to have a further survey if you are buying a property rather than remortgaging it.
For most properties, an RICS House Buyers Report is more than sufficient although for much older and very expensive houses the surveyor may recommend a full structural survey. These are very detailed reports on the condition of the property, which will make various recommendations for works to be carried out or further reports to be obtained. Where defects are found, it enables you to renegotiate the price or request your Seller to carry out remedial works before you complete your purchase. Otherwise, once you have completed, you generally take the property in the condition that it is in and have no recourse to the Seller. If you obtain a survey report, then please pass this to us. |
| Survey Fee |
The fee charged by a surveyor to carry out a survey on a property. If the surveyor is acceptable to the lender then it is normal for this fee to include the lender’s valuation fee. |
| Surveyor |
A person professionally qualified to estimate the value of the land and property and carry out a survey of it. |
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).
