ADVERSE CREDIT – If you have defaulted on credit cards, loans or had mortgage arrears, County Court Judgements (CCJ’s) etc this is likely to result in a poor credit score.

APR – Annual Percentage Rate. This is the true cost of the interest rate you will pay taking into account all associated costs such as arrangement fees.

ARRANGEMENT FEE – Most lenders charge this to cover administration costs in setting up your mortgage.

BANK OF ENGLAND BASE RATE – The National interest rate which is set by the Bank of England and reviewed on a monthly basis.

BUY TO LET – Purchasing a property for the purpose of renting it out. These types of mortgages are NOT regulated by the Financial Services Authority (FSA).

CONTRACT – An agreement to sell a property. Once contracts are exchanged between the seller and the purchaser, the contract becomes legally binding.

CONVEYANCING – The legal process of buying and selling a property.

CREDIT CHECK – A check of your credit and financial history.

CREDIT SCORE – The method which most lenders use to assess your suitability for borrowing. The better your credit history, the higher your credit score is likely to be.

DAILY INTEREST CALCULATION – This means that the lender calculates the interest payable on your mortgage on a daily basis. The advantage of this is that whenever you make a payment to the mortgage account, your balance reduces immediately. Some lenders only calculate the interest on a monthly or annual basis.

EARLY REPAYMENT CHARGE – A financial penalty imposed by the lender for repaying your mortgage before a set date.

EQUITY – The difference between your loan amount and the value of the property.

FREEHOLD – Ownership of the property including any land.

HIGHER LENDING CHARGE– The higher lending charge is a fee charged by a mortgage lender where the amount borrowed exceeds a given percentage of the value of the property. This fee may be used by the lender to purchase an insurance policy designed to protect it (the mortgagee) against loss in the event of you defaulting and ceasing to repay your mortgage. The fee may be insisted on by the lender at the start of the loan.

HOMEBUYERS REPORT – A mid-level survey report of a property which should highlight any flaws which may affect the purchase.

KEY WORKERS LOAN – An interest free loan available from the Government to assist “Key Workers” such as nurses, teachers etc to buy a home.

LEASEHOLD – You have a set term on the lease which determines how long you have to occupy the land. Most flats are leasehold.

LOAN-TO-VALUE (LTV) – The ratio of the mortgage amount in relation to the value of the property at a given time.

NEGATIVE EQUITY – This occurs when the value of the property drops below the mortgage balance.

PORTABILITY – When you transfer your mortgage to a new property. This can avoid the necessity to pay an Early Repayment charge.

REMORTGAGE – Transferring the loan on your property to a different product or lender without moving home.

RIGHT TO BUY – A tenant in a council owned property may be able to purchase the property at a discount, depending on the length of their tenancy. Some lenders have specially designed mortgages to meet the needs of these borrowers.

SELF BUILD – When you either build a home yourself or somebody builds it for you. The mortgage is usually released in stages as the build progresses.

SELF CERTIFICATION – You state your income on your mortgage application but are not required to provide any evidence or proof, such as payslips. This is usually used for self-employed or people with several sources of income.

SHARED OWNERSHIP - A scheme operated by a housing association where a person owns part of the property and pays a mortgage on this, while the housing association owns the rest of the property and the person pays rent on this. Shared ownership can be a good way to get into the property market, as the total monthly payments are often less than they would be for an equivalent mortgage on the whole property.

STAMP DUTY – On all properties purchased above the Stamp Duty Threshold, a tax is payable upon completion by the purchaser.

STRUCTURAL SURVEY – A thorough survey of the structure of a property. This is a more detailed survey than a Homebuyers Report.

TITLE DEEDS – The legal documents which shows ownership of the property.

VALUATION – A basic survey of the property to satisfy the lender that there is sufficient security for their loan.

YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE