Mortgage Terminology

Like any other legal system, mortgage has much jargon that may confuse some people. Below are several mortgage terms explained in brief for better understanding.

Advance: This is the money you have borrowed plus all the additional fees.

Base Rate: In the UK, this is the base interest rate set by the Bank of England.

Bridging Loan: This is a temporary loan that enables you to purchase your new property before you are able to sell your old property.

Conveyance: The legal document that transfers ownership of unregistered land to you.

Disbursements: These are all the fees of your solicitors, such as stamp duty, land registry, search fees, etc.

Early Redemption Charge / Pre-Payment Penalty / Redemption Penalty: This is the amount of money you have to pay if you pay your mortgage in full before the time finished.

Equity: This is the amount of your property in the market minus all loans that it has.

Freehold: This means the ownership of a property and the land.

Land Registration: This is a legal document that records the ownership of a property and land.

Legal Charge: This is a legal document that records the data of the rightful owner of a property or land.

Mortgage Deed: This is a legal document that stated that the lender has a legal charge over your property.

Mortgage Payment Protection Insurance: This is the insurance that insures your mortgage payment arrives on time in case you are unable to pay your mortgage.

Sealing Fee: This is a fee made when the lender releases the legal charge over your property.

Subject To Contract: This is an agreement between seller and buyer before the actual contract is made.

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