Home Buying

made easy

 

Learn about most types of property transactions and how to manage the process of buying a new house.

home buying made easy

 

Learn about most types of property transactions and how to manage the process of buying a new house.

common types of property transactions

RESIDENTIAL TRANSACTION: Residential involves buying a property for own residential use
BUY-TO-LET: Buy-to-Let involves buying the property to let out generally on a fee basis over an agreed period of time.
These two types of property transactions can involve a PURCHASE OR REMORTGAGE and below under each heading are some of the words most commonly associated which sometimes apply to both transactions.

About Us

Mortwiki has been set up as a way for us to share our knowledge and experience of working in the mortgage industry.
 
Our aim is to ensure everyone understands the terms/words associated with mortgages. We aim to break down all the jargons so that when an individual sees LTV they will know this means Loan to Value.
 
Mortwiki is a free to use website. All definitions are our own, are not exhaustive and is subject to change.

residential purchase

Buyer, seller, Credit rating, Early Repayment Charge (ERC), Equity, First time buyer, Gazumping, Gazundering, Help to buy, Key Facts Illustration (KFI), Help to Buy Equity Loan, basic essential expenditure, basic quality of life expenditure

< words apply to both>

Asking price, deposit, binding offer, Decision in Principle, Agreement in Principle, building insurance, broker fees, building insurance, building survey, vendor, completion fee, completion date, estate agent, exchange of contracts, conveyancing, applicant, borrower, High Loan to Value (LTV)

buy-to-let purchase

Assured Shorthold Tenancy (AST), Buy-to-let, Energy Performance Certificate (EPC), First time Landlord, rental income, rental estimate

residential remortgage

Desktop Valuation, Further Advance, Unencumbered Property, security, etc

< words apply to both>

Standard Valuation report, Telegraphic Transfer Fee (TTF), Undertaking, Additional borrowing, Debt consolidation, Loan purpose, Early Repayment Charge (ERC), Equity release, , Loan to Value (LTV, Low Loan to Value, Building regulations, planning permissions, retention, etc

buy-to-let remortgage

Assured Shorthold Tenancy (AST), Energy Performance Certificate (EPC), Consumer Buy-to-Let (CBTL), rental cover ratio, etc

mortgage repayment methods

CAPITAL REPAYMENTS

( often referred to as Capital & Interest, or C&I repayments): This is when your monthly payment is made up of capital, which is the amount you have borrowed and interest, which is what the lender charges you on the amount you have borrowed

INTEREST ONLY

This is when your monthly payment only pays the interest you owe. You will still have to pay the capital (the amount you have borrowed) at the end of the mortgage

PART & PART

This is a combination of both interest-only mortgage and a repayment mortgage where you choose the amount of the initial mortgage you would like to be on interest only and the remainder to be repaid over the mortgage term as capital and repayment

mortgage PRODUCT TYPES

After you have decided on the type of repayment strategy you are going with, you now have a choice of payment products to go with and below are some examples, but are not exhaustive.

STANDARD VARIABLE RATE

(sometimes you will hear SVR): The payments you make you each month may go up or down as the lender increases or decreases its own interest rates

DISCOUNTED RATE

The lender normally gives you a discount on your payments for a set period, following which your repayments are placed on another payment method, for eg no payments for first 6months then variable rate payments for set period

TRACKER

Similar to the standard variable rate mortgage, but your monthly payments fluctuate in line with increases or decreases in the bank of England base rate

FIXED RATE

The payments you make each month are fixed until a particular time and do not change in line with interest rate fluctuations

HYBRID

These are mortgage products containing two difference products, eg part interest only and part repayment

OFFSET

A type of mortgage where your savings and current account balances are linked to your mortgage

Legal terms

These are some legal words you may come across and these are not exhaustive,
Click for the meaning.

STEPS TO BUYING A NEW HOUSE/FLAT IN THE UK

This is not exhaustive

1. MOVING COSTS

Have a think and work out what you can afford, need to look at any savings you have, your income, outgoings. You need to establish your moving costs: typically legal costs, lender fees, removals, broker fees, etc

2. HOW MUCH CAN YOU BORROW

make an appointment with a lender/mortgage broker to see what mortgage you can afford, you can get a Decision in Principle at this stage

3. SEARCH FOR A PROPERTY

Now you know what type of mortgage you can afford, so you look for a house/flat to buy. Use estate agents/online portals, arrange viewings, think about neighbourhoods, commute, etc

4. MAKE AN OFFER

You’ve found a property you like so you make an offer through an estate agent

5. ARRANGE A SOLICITOR & SURVEY

The solicitor will handle the legal work around the property
The survey will be done by the lender to ensure the property is worth the price you are paying before agreeing your mortgage

6. FINALISE THE OFFER & MORTGAGE

Once the survey is complete and everything is okay, the lender will issue you a mortgage offer

7. EXCHANGE OF CONTRACTS

Once your solicitor has concluded all searches, and there are no delays or issues, then you should receive the contract to sign and complete the sale

8. COMPLETION & FINAL STEPS

The remaining money owed to buy the property is now transferred from your solicitors to the seller’s solicitor. This completes the process

Disclaimer
Please note the content of this website is a guide and for information only and mortwiki.com does not offer loans, broker loans or recommend lenders. We are not mortgage advisers and you will need to consult a qualified professional in that area. Please note these definitions are our own, are not exhaustive and is subject to change.