Glossary...

APR
Annual Percentage Rate of charge. This is the true rate of interest that is charged on a loan, it takes into account the total cost of interest and any other charges e.g. brokers fees/legal fees.

Assurance - Life
A specific type of life insurance policy that can be linked with a mortgage or loan. A percentage of the premium goes toward insuring your life, and would pay off the loan in the event of your death. The rest is invested and would pay you a lump sum at the end of the term.

Assurance - Level Term
Life assurance that pays out a lump sum if you should die during the term. This is suitable for interest only loans as the amount owed on the loan remains the same throughout the period of the loan.

Broker - Mortgage/Finance
An intermediary who finds and places customers who need a loan or mortgage with the lender most suitable to provide it. The broker normally carries out all administration and paperwork to do with processing the loan.

Cashback
Type of loan where the borrower is given back a sum of money (usually a percentage of the loan). Commonly used by lenders as an incentive to promote their products.

CCJ
County Court Judgement. A court order against a debtor to pay money owed.

Discounted Rate
A discounted rate gives you a reduction of, for example, 2% off the standard variable rate (SVR) for a specific period. So, during this period should the SVR rise and fall, you will still qualify for the discount and therefore pay a lower rate.

Double Insurance
Policies can vary from lender to lender. Normally double insurance offers protection against sickness, accident and redundancy for the first and second wage earners. Cover is also available for self-employed borrowers and under certain circumstances for non-working partners. Details of the specific insurance plan will accompany the lenders offer. Norton Finance strongly recommend that you consider some form of insurance protection, especially in the case of secured loans and mortgages.

Fixed Rate
The rate is fixed for a specific number of years, so you know exactly what your payments will be over that period. Following this period, the rate will usually return to the lender's standard variable rate.

IFA
Independent Financial Advisor.

Insurance Term
A life insurance policy that is often linked with a mortgage or loan. The premium goes towards insuring your life, and will pay off the loan in the event of your death.

Interest Only Loan
The monthly repayment covers only the interest element of the loan leaving the capital outstanding at the end of the loan terms.

Lender
The actual company that provides the finance to meet with a request for a loan or mortgage.

Loan - Secured
The equity in the property is used as security against the loan not being repaid.

Loan - Unsecured
The credit rating or financial position of the applicant is such that no security for the loan is required.

LTV
Loan To Value. This is the size of the loan or mortgage as a percentage of the value of the property or price being paid for the property e.g. A property valued at £60,000 with a mortgage of £54,000 would have an LTV of 90%.

MCRI
Mortgage Code Register of Intermediaries. A register kept by the Council of Mortgage Lenders of the names of all mortgage brokers that subscribe to the Mortgage Code.

MGI
Mortgage Guarantee Insurance. An insurance policy designed to make good any shortfall between the amount owed on a mortgage and the value of the mortgaged property. Provides a benefit to the lender in the event of repossession resulting from non-payment.

Mortgage
A loan to purchase a home where the property is used as security in the event of non-payment of the mortgage.

Negative Equity
A situation where the amount owed on a mortgage exceeds the value of the property.

Rate - Capped
Usually a rate for a set number of months/years where the interest rate can go up and down but there is a maximum (capped) interest rate which it can not go above.

Rate - Variable
A rate of interest which may vary up or down during the period of a loan.

Re - Mortgage
If you would like to extend or improve your home re-mortgaging can help. Also if you wish to release capital in your home for a car, a holiday, consolidate any existing loans you already have to reduce your monthly outgoings, then re-mortgaging may be the answer.

Representatives
Local representatives (Reps) who are available, if required, to pay home visits to give help and advice in the completion of loan applications.

Repayment Mortgage
With a repayment mortgage you pay part interest and part capital repayments to the lender each month and in this way the capital that you borrowed is reduced until the loan is repaid.

RTB
A term associated with legislation that gives council house tenants the "Right to Buy" their homes.

Security Address
When taking a secured loan or mortgage, the security address is the address of the property which is being offered as collateral for the loan. Where property is offered as security in this way, lenders are generally prepared to offer more flexible terms and lower interest rates.

Self - Certified
Lenders that operate this type of scheme allow the applicant to confirm how much they earn by "Self-certifying" their income. Schemes are available to self-employed applicants. There is no need for full 3 years audited accounts to be provided.

Single insurance
Policies can vary from lender to lender. Generally single insurance offers protection against sickness, accident and redundancy for the main wage earner. Cover is also available for self-employed borrowers. Details of the specific insurance plan will accompany the lenders offer. Norton Finance strongly recommend that you consider some form of insurance protection, especially in the case of secured loans and mortgages.

Stamp Duty
A tax (currently 1%) paid on the purchase of properties costing more than £60,000.

Status
The credit-worthiness or otherwise of a potential borrower.

Structural Survey
A detailed survey of the structure of a building carried out by a Structural Engineer or Chartered Building Surveyor. Surveyors are liable for negligence.

Term
Period of a loan expressed in months or years.

Underwriting
The process by which the ability of a prospective borrower to repay a loan is assessed (this is also the name of the department that undertakes this work). The process takes into account various factors including employment history, financial status, previous credit history and current earnings.

Valuation
A brief inspection of a property for mortgage purposes confirming the suitability of a property to secure money against and its value.

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