APR This stands for Annual Percentage Rate and can be used to compare the cost of borrowing money from different lenders.
Basic valuation A check carried out by a surveyor, on the property, which determines how much the property is worth and to confirm that the property is suitable for a mortgage.
BBR This stands for Bank base rate, which is set every month by the Bank of England.
Buy-to-let mortgage A mortgage designed for property investors who buy a property and then rent it out.
Capital and interest mortgage This is sometimes called a repayment mortgage. With this type of mortgage you pay off some of the capital (the amount of money borrowed) and some of the interest every month.
Capped rate With this type of mortgage, the rate that you pay is variable to a maximum limit set at the outset for a fixed period (it can go up and down).
Cashback* Some mortgages offer cashback as an incentive. It is a cash sum that you receive when your mortgage completes.
Conveyancing The legal process for buying and selling property.
Discounted rate* With this type of mortgage, the rate that you pay is discounted from the lender's standard variable rate. This discount is guaranteed for a set period of time and the rate can go up and down.
ERC This stands for Early Repayment Charge and is an amount of money that you may be charged if you fully repay your mortgage before a set time, usually before the end of the incentive period.
FCA This stands for the Financial Conduct Authority. The FCA is an independent organisation that regulates specific areas of the financial services industry including mortgage advice.
Fixed rate* With this type of mortgage, the rate you pay is fixed for a set period of time.
Freehold This means you own the property and the land the property is on.
Full Structural Survey This survey is a more in-depth review of the condition of the property than a homebuyer survey. It does not incorporate a
HLC This stands for higher lending charge and it is an insurance policy that you pay for but which protects the lender in the event that the lender may have to repossess the property, sell it and then does not retrieve enough money in the sale of property to repay the mortgage in full. This policy would then pay the outstanding balance remaining. The borrower, however, is still responsible for the outstanding balance.
Homebuyers report This is a survey, which reviews the condition of the property, and incorporates a basic valuation.
Interest-only With this type of mortgage you only pay off the interest every month, not the capital (the amount of money borrowed). The capital is paid back at the end of the mortgage term. A repayment vehicle, such as an endowment policy or Individual Saving Account, could be used however you should seek independent financial advice. Pink Home Loans do not advise
Leasehold This means you own the property for a set period of time but not the land the property is on. After the set period of time, ownership of the property reverts to the freeholder. Many flats are leasehold properties.
LTV This stands for loan to value and denotes the relationship between the amount of money you want to borrow (the loan) and the cost of the property (the value) and is expressed as a percentage. For example, if you borrow £85,000 and your property costs £100,000, then the loan to value is 85%.
Mortgage This is a loan that is used to buy a property, where the loan is secured against the property as a charge. This acts as security for the lender in case you fail to repay the loan.
Repayment mortgage This is sometimes called a capital and interest mortgage. With this type of mortgage you pay off some of the capital (the amount of money borrowed) and some of the interest every month.
Stamp Duty Land Tax (SDLT) This is a tax that may be payable on purchases of flats, houses and other UK land and buildings.