Mortgage

Literally means ‘dead deed’. Basically, when you are loaned money to buy a property, you sign a mortgage which conveys the property to the lender, but giving you the right to occupy it so long as you keep up repayments, and once you have repaid the loan, the lender then releases the mortgage which effectively conveys it back to you. If you don’t keep up repayments, the lender takes possession back – known as re-possession.

There are several types of mortgage residential mortgages, commercial mortgages and buy to let mortgages. A residential mortgage is the typical type of mortgage an individual would obtain if they wanted to obtain a property solely for the purpose of living in. A Commercial mortgage refers to a property purchased for commercial purposes such as for opening a shop or business. Buy to let mortgages are designed for people who purchase properties solely for the purpose of renting them out.

The way you repay your mortgage can also vary. Firstly there are repayment and interest only mortgages. A repayment mortgage means you pay off both the outstanding amount and the interest charged each month where as an interest only mortgage you just pay off the interest and have to make arrangements to settle the remaining amount at the end of the term. A popular type of interest only mortgage in the early 1990s were Endowment mortgages where by the capital is intended to be repaid by one or more endowment policies. However these are now less widely used as many people encountered shortfalls on their endowment policies which led to them not being able to cover the remaining balance of the mortgage.

When you take out a mortgage you will pay an agreed interest rate on the sum. This is usually based on the bank’s base rate so for example if this is 4% and you pay 2% over the base rate your interest rate will be 6%. This will then fluctuate as the base rate changes so if the base rate change to 5% your interest charges will be 7%. This is known as a tracker mortgage. Other types of mortgage include fixed rate where your interest rate is agreed for a set time at a set amount, capped rate where the rate cannot rise above a set limit, Variable rate which changes at the discretion of the lender and discount rate where there is reduction in the standard variable rate (e.g. a 2% discount) for a set period; typically 1 to 5 years.

More Credit Definitions

Accident Sickness And Unemployment Insurance (ASU)
Additional Cardholder
Adjudication
Administration Order
Adverse Credit
AER
Agreement In Principle
Amortisation
Annual Equivalent Rate (AER)
Annual Fee
Annual Percentage Rate (APR)
Annuity Mortgage
Application Score
Application Search
APR
Arrangement Fee
Arrangement To Pay
Arrears
Attachment Of Earnings Order
Bank Reference
Bankruptcy Order
Base Rate
Bridging Loan
Broker
Building Society
Bureau Score
Buy To Let
CAIS
Callcredit
Callscore
Cap
Cap And Collar
Capital
Capital And Interest Mortgage
Capitalised Interest
Capped Rate
Card Protection
Cash Advance
CCA
CCJ
CCN
CCTA
Charge Card
Charge Over Equitable Interest
Charging Order
CIFAS
CIFAS Case Type
CIFAS Entry
CML
Collar
Collateral
Commission
Consolidation Loan
Consumer Credit Act 1974
Consumer Credit Trade Association.
Cooling Off Period
County Court Judgment (CCJ)
Court Information
Credit
Credit Agreement
Credit Card
Credit Card Cheques
Credit File
Credit Impaired
Credit Limit
Credit Rating
Credit Reference
Credit Report
Credit Score
Credit Search
Data Sharing
Deed Release Fee
Default
Delinquent
Delinquent Account
Delphi
Deposit Account
Depreciation
Disassociation
Discounted Rate Mortgage
Drawdown Loan
Dynamic Delinquency
Early Repayment Penalty
Electoral Roll
Endowment Mortgage
Endowment Policy
Enquiry
Equifax
Equity
Equity Release
Experian
Extended Credit Taker
Fair Isaac
FICO Score
Financial Association
Financial Ombudsman Service
Financial Services Authority (FSA)
First Mortgage
Fixed Rate
Fixed Rate Mortgage
Flexible Loan
Forced Sale Value (FSV)
FSA
FSV
Full Payer
Further Advance
GAIN
Garnishee Order
General Insurance Standards Council (GISC)
Geodemographic Data
GISC
Gone Away Information Network (GAIN)
Guarantor
Health Insurance
Higher Lending Fee
Household Score
Hunter
Joint And Several
Kerbside Valuation
Lending Multiplier
Liability
Lien
LTV
Lump Sum Reduction
Money Laundering
Mortgage
Mortgage Indemnity Insurance
Mortgage Payment Protection
Mortgage Valuation
Mortgagee
Mortgagor
Multiplier
Negative Equity
Non Status Mortgage
Notice Of Arrears
Notice Of Correction
Notice Of Default
Notice Of Default Sums
Offset Mortgage
Ombudsman
Oral Examination
Overdraft
Overdraft Limit
Overpayment
P60
Payment Holiday
Payment Protection
Payment Protection Insurance (PPI)
Pension Mortgage
Personal Loan
Plastic
Portable Mortgage
Principles Of Reciprocity
Proof Of Income
Propensity Score
Protective Registration
Public Information
Reciprocity
Redemption Penalty
Refinancing
Remortgage
Repayment Mortgage
Repossession
Schumer Box
SCOR
Scottish Decree
Search Footprint
Searches
Second Mortgage
Secured Loan
Security
Self Certification
Sequestration
Set Off
Share
Shared Equity
Shared Ownership
Sharking
Shortfall
Standard Variable Rate
Status Report
Sub Prime Credit
Subject Access Request
Subsequent Mortgage
Summary Box
Third Party Data (TPD)
Title Deed
TPD Rules
Tracker Mortgage
Trade Organisation
Trust Deed
Underwriters
Unsecured Loan
Valuation
Victim Of Impersonation
Wait Period
Warrant Of Execution
Wescore
Writ Of Fi Fa
Z Score

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