Buying a house can certainly be a daunting experience, especially when it’s your first time doing so. What doesn’t help is the wealth of jargon and terminology used during the mortgage process and throughout the entire journey to buy your new home.

If you’re looking to join the property ladder and want to gain the inside scoop on some of the phrases, terminology and jargon you will expect to see, here is a handy guide.

Agreement in Principle (AIP)

Also known as a Decision in Principle (DIP), this is a statement from a lender to say they would be willing to lend a set amount of money to you to buy a property.

These are particularly helpful in the early stages of the homebuying process as they demonstrate to both estate agents and to sellers (also called vendors) that you are a serious buyer. A mortgage adviser will be able to help you secure an AIP or DIP.

Arrangement fee

Mortgage lenders may charge an arrangement fee to set up the mortgage. Depending on the mortgage product and the mortgage lender, the fee can either be paid upfront or added to the mortgage balance, if the lender allows.

Conveyancer

A conveyancer is a legal professional who specialises in managing property transactions in the UK. They manage the property transaction and transfer of property ownership.

Debt-to-income ratio (DTI)

The calculation used by lender to determine how much of your monthly income is spent paying off existing debt. This can include car finance, credit car debt or any personal loans and will be used by lenders to assess your affordability.

Early Repayment Charge (ERC)

Some mortgages, particularly fixed rate mortgages, often come with an ERC. This is the penalty a lender charges if you overpay by more than is allowed, or pay off your loan early. It can also be charged if you choose to remortgage or sell your home before the agreed period.

The amount you pay will vary depending on your lender and the type of mortgage you have, with some ERCs decreasing as the mortgage term progresses.

Energy Performance Certificate (EPC)

An EPC is a document that rates a property’s energy efficiency ranging from A (most efficient) to G (least efficient). Some mortgage lenders may require a minimum EPC rating before approving a loan and some lenders offer better rates or incentives for homes with higher EPC ratings – these are often called green mortgages.

Fixed rate

Fixed rate is the most popular type of mortgage among new borrowers in the UK and means your repayments are made at a fixed interest rate for a set period of time – typically two or five years. One reason for their popularity is your monthly payment is exactly the same for the entire fixed period.

Freehold

When you own the property and the land it is built on. This is compared to leasehold where you own the property for a fixed period of time, but the freeholder maintains ownership of the land it sits on.

Joint Borrower, Sole Proprietor

JBSP is a type of mortgage arrangement where multiple people (usually family members) apply for a loan together, but just one person owns the home.

Loan-to-value (LTV)

Loan-to-value ratio is how much you need to borrow as a mortgage compared to the value of a property. A lender will use this ratio (which is displayed as a percentage) to consider whether to lend to you, how much you can borrow and what interest rate you will receive.

A lower LTV means you need to borrow less in comparison to the value of the property and often means a lower interest rate as there is less potential risk for the lender. With a smaller deposit often comes a higher LTV and a higher interest rate as there is greater risk to the lender. A broker will be able to help you work out your LTV ratio and discuss potential ways to improve this if necessary.

Mortgage offer

A mortgage offer is a formal document from a mortgage lender confirming that they have approved a mortgage application and are willing to lend the borrower a specified amount. It outlines the loan terms, interest rate, repayment details, and any conditions that must be met before completion on the property purchase. A mortgage offer is typically valid for 3 to 6 months and is a key step in securing property purchase.

Overpayment

As the name suggests, this is when you pay over and beyond your usual monthly mortgage payments. Some people choose to do this as a way to shorten their mortgage term or to save on interest. Paying off too much too early can incur a penalty, so it’s important to check what limits your lender has in place. Your mortgage adviser will be able to help with this information.

Repayment mortgage

Also known as a capital and interest mortgage, this arrangement means your monthly mortgage payments go towards paying the capital (the amount you borrowed) and the interest (the cost to borrow the money from the lender). This is compared to an interest-only mortgage where you only pay off the interest each month and repay the capital at the end of the agreement.

Stamp Duty

Stamp Duty Land Tax (SDLT) is the tax paid when purchasing a property or piece of land. The amount paid depends on its value, where it is located and whether it is your first home or an additional home. Rules are also slightly different in Scotland and Wales so it’s important to speak with your local mortgage adviser to determine how much Stamp Duty you will pay.

Standard variable rate (SVR)

This is the mortgage interest rate that a lender will charge you after your initial mortgage rate ends. This rate can change at any time and is set by the lender. It can often be much higher than a rate achieved through a new deal so it can be best to seek advice and explore your options.

Tracker rate

A type of variable mortgage rate that tracks the Bank of England base rate. Unlike a fixed rate, a tracker rate will rise and fall in line with the base rate, meaning your monthly mortgage payments can go up or down.

Valuation fee

A valuation fee is charged by mortgage lenders to cover the cost of an independent assessment of the property’s value to ensure it meets the mortgage lender’s criteria to provide sufficient security for the mortgage loan.

Expert jargon-busting advice

If you’re not sure about any potential jargon or phrases you come across during the process, as mortgage advice experts, we will be able to provide an explanation, as well as answer any questions you may have. We will be able to guide you every step of the way to your first home.

To book your appointment, please call 020 7317 7311 or email info@chapelgateprivatefinance.com.

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

Chapelgate Private Finance is a trading name of Chapelgate Associates Ltd which is an appointed representative of Altura Mortgage Finance, which is authorised and regulated by the Financial Conduct Authority.

Until relatively recently, interest rates have been at near-historic lows for over a decade. In the last two years, though, they’ve rocketed. Higher interest rates, coupled with the cost-of-living crisis and high inflation levels not seen in almost 40 years, has created uncertainty for those whose fixed-rate deal is about to end.

Homeowners are keen to keep their repayments manageable and one option you may be considering is an interest-only mortgage.

What is an interest only mortgage?
An interest only mortgage means you only pay the interest each month, with the loan amount remaining the same. This means your mortgage payments could be cheaper on a monthly basis. But at the end of the term, the full amount you borrowed needs to be fully repaid.

Is an interest only mortgage the right option for you?
Any mortgage decision needs to be carefully considered, which is why we are on hand to provide you with the expert advice you need to make an informed choice. A lot will depend on your circumstances. Interest-only mortgages can cut the cost of your monthly payments but you will need a credible repayment plan at the end of the term.

Maybe you have a separate investment vehicle to pay off the debt, or perhaps you’ve built up significant equity in your property and plan on down-sizing at the end of your mortgage term. If that’s the case, then an interest-only mortgage could be an avenue that we can explore together.

What are the drawbacks of an interest only mortgage?
The interest-only option isn’t for everyone and can be a route that is, ultimately, more expensive than remaining on a repayment mortgage. There’s also a chance that the investment you have in place to pay off the debt doesn’t work out – leaving you unable to afford the lump sum at the end of the term.

We’re on hand to guide you through…..
With its cheaper monthly payments, an interest-only mortgage, can be an effective way to keep your costs down and, in the immediate term, feel like an attractive option but you have to be certain you will be able to repay the loan when it comes to the end of the term.

Our experienced advisers will talk you through all the pros and cons of an interest-only mortgage, assess all your options and help you make the right choice for you and your individual circumstances.

Call on 020 7317 7311 or drop us an email on info@chapelgateprivatefinance.com

Your home may be repossessed if you do not keep up repayments on your mortgage.

Cancer is a disease that leaves very few of us untouched. Statistics from Cancer Research UK suggest that as many as one in two people born after 1960 will be diagnosed with some form of the disease over the course of their lifetime.

That’s the kind of statistic that makes you think. Little wonder that one of the most common questions clients ask is whether private medical insurance covers the disease. With soaring waiting times and the NHS stretched like never before, it’s one that has assumed ever greater importance.

The simple answer is, yes. Private medical insurance can cover all types of cancer.

What benefits can private medical insurance deliver? 

Private treatment for cancer can give you shorter waiting times, a choice of hospitals and access to a wider range of better medicines and treatments, some of which are unavailable on the NHS. Most importantly, it provides you with the peace of mind that if you were diagnosed with the disease, there’s a policy tailored for you to tackle it head on. It’s important to emphasise that private healthcare never competes with the NHS, one of the country’s most treasured institutions. Instead, they work hand-in-hand, with the level of integration between the two very much your choice.

Prevention is always better than cure 

According to Cancer Research UK cancer risk statistics, around four in 10 UK cancer cases are preventable each year. That’s an extraordinary figure and one which illustrates why a range of varied health insurance policies do all they can to encourage people to live healthy lives and make better health choices. Whether that’s support for quitting smoking or discounted gym memberships, these policies are designed to put your health first.

Early diagnosis can make a huge difference 

Cancer treatment has come a long way, with survival rates (people who live for five years or more) up to 90% for common forms of the disease, such as bowel, breast and ovarian cancer, if they are caught early. The range of tools available to you via your private health insurance are both enormous and impressive, making that early diagnosis far more likely. 

Treatment without delay 

Once a diagnosis has been made, it’s imperative for treatment to start as quickly as possible. One of the greatest benefits of any private medical insurance policy is the ability to skip NHS waiting times. Even small delays can have a big impact. Private medical insurance can also open up a world of treatment options, which may not ordinarily be available to you on the NHS. Some policies even include the option of home-delivered chemotherapy and, in the worst cases, palliative care at home too.

Choosing the right policy

There are a range of options – and we’re here to help you make the choice which best fits your circumstances and your future and we can make sure you get all the information you need to decide whether private medical insurance is the right option for you.

Call us on 020 7317 7311 or drop us an email on info@chapelgateprivatefinance.com

Should you stay with your lender? 

Staying with your current lender may feel like the saftest option when your mortgage comes to an end, but that’s no guarantee that you’ll be getting the best deal. That’s why we recommend shopping around to get a mortgage that’s fits you. 

When there is such uncertainty in the housing market at the moment, you might be thinking that staying put is the right thing to do. It may feel like the easiest, but unless you search the mortgage market thoroughly, you won’t know for certain that you’re on a mortgage deal that is the right deal for you. And staying with your lender doesn’t automatically guarantee this either.

Remortgaging – stick or twist?

If you’re looking to remortgage, it will have been a few years since you last went through the process. Your circumstances may have changed during this time, not to mention the changes that have happened to the mortgage market. We all know nothing stays the same, so why should your mortgage? It’s fine for something that worked a few years ago, to not fit quite so perfectly now.

We suggest seeking the help of an experienced mortgage adviser to help with your next remortgaging steps. We have access to a huge variety of mortgage options as well as an extensive panel of lenders. We’ll be able to access specialist search tools to help with the process. We can even find exclusive mortgage options with lenders that you may not have access to.

Take the weight off your shoulders with specialist help.

An adviser can be an invaluable guide to the variety of mortgage options out there, protecting your time and energy.

As well as using our in-depth knowledge of the mortgage market to search the thousands of deals out there, we can protect your time and energy, doing the legwork to find your mortgage match.

It might seem daunting looking at the mortgage market now, particularly against a less-than-positive financial climate. It may feel especially tricky if a change in your personal circumstances make you feel like your options are limited – such as a credit blip or redundancy. But it’s important to remember that there are thousands of mortgage choices out there – whatever your situation. And with an expert by your side, you’ll find one that suits you.

We know things may change, and we’ll be right by your side if they do.

If your mortgage expiry date is under six months away, you can secure a new deal now. This means you can spend your time finding the right deal, without rushing to meet the deadline of your mortgage expiring.

One final thing to remember when it comes to remortgaging, is that it isn’t just about comparing the mortgage interest rate, but the mortgage fees that your current lender will charge. If you’re looking to pay less in the long term, then it’s vital to look at the two of these together.

See what mortgage is right for you.

Your time and energy is precious, so why not let us do the remortgaging legwork for you? We’ll search and compare products on your behalf to find the right deal for you.

Not only that, but once we’ve found it, we’ll help you through the whole remortgaging process – from scrutinizing the small print, to making sure all your paperwork is in order, saving you unnecessary hours spent searching and mortgage comparison headaches.

Our expert advice will make your mortgage search and application process pain-free, and our inside knowledge will protect you from any nasty surprises. So are you ready to find a mortgage that’s right for you? Get in touch with us today.

Call us on 020 317 7311 or drop us an email on info@chapelgateprivatefinance.com

If you buy a property for the seller’s asking price and later find it has serious defects, it’s too late to back out of the purchase or renegotiate a price with your seller. You’re also likely to find yourself paying out to rectify the fault – and probably a lot more than you would have paid for a survey in the first place!

A survey to suit your needs

There isn’t just one type of survey available – you can get different ones that range in cost, according to the kind of property you’re buying:

Condition report

What is it: a basic overview of the property that only highlights the most significant defects; it doesn’t go into detail.

Suitable for: those buying a relatively new homes in good condition.

Homebuyer report

What is it: a more comprehensive survey that highlights obvious defects such as damp or subsidence. It will include advice on any necessary repairs or maintenance and may also include a valuation or an estimation of rebuild costs. However, it’s not an intrusive survey, meaning the surveyor will only be picking up on visible issues.

Suitable for: those buying a standard property in a reasonable condition.

Building survey

What is it: the most comprehensive type of survey, which looks at the property’s structure and condition, lists any defects and advises on repair and maintenance work. Unlike a homebuyer report, this is a much more hands-on survey, so the surveyor will do things like going up in the loft or looking under floorboards or behind sofas.

Suitable for: older or listed buildings, or properties that are in poor condition or have an unusual design or structure.

But what if I’m buying a new build?

Even though it’s tempting not to have a new build property surveyed, there can still be issues with new build homes that could be costly to repair. If you’re buying a new build, you’ll need a slightly different survey called a snagging survey. It identifies any defects with new build homes, from cosmetic issues to structural problems, which the developer will then have to fix within the two-year warranty period.

We can help

As a member of Openwork, we can refer you to our specialist Surveying Service, which offers access to a large network of approved surveyors across the UK. For your peace of mind, get in touch.

Surveying is not regulated by the Financial Conduct Authority.

Do you know your mortgage rate?

If your current tracker, fixed rate, or discount mortgage deal has ended, you are likely to be switched onto your lender’s SVR and could be paying way over the odds, perhaps without even realising. It has been found that borrowers on an SVR could save an average of £1,602 a year, that’s over £133 every month!

Sound familiar?

Even with a potentially sizeable saving to be made by remortgaging, it’s surprising how many people just stick with their SVR. Why is that?

“I didn’t realise my mortgage deal had ended” – your lender should have let you know, but always remember to make a note of the end date of a new mortgage deal so you don’t forget.

“My lender contacted me, but I didn’t understand”- mortgage jargon can be confusing, but it pays to check out important mortgage correspondence.

“It’s too much hard work to find a new deal”- it’s true that the mortgage market can be bewildering as there are so many deals to choose from. That’s where we can get involved – to help find you a suitable deal. You can then choose what to do with any savings made!

Time to remortgage?

It’s important to regularly review your mortgage. Particularly now, when mortgage rates are at record low levels, it makes sense to consider your options to see if you can get a more cost-effective mortgage deal.

Are you still covered?

If you’re thinking of changing your mortgage, remember to review your protection policies at the same time – especially if you don’t already have cover in place, or your circumstances have changed since you last reviewed your cover.

To discuss your remortgaging options and to see if you could save money, please get in touch. Rest assured we are here to help if you have any questions about your mortgage or your protection requirements.

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

Life insurance tends not to feature on ‘to do’ lists because it makes us confront uncomfortable questions, such as what would happen to our loved ones if we were to die unexpectedly in the next few years.

However, we all carry a deep responsibility to ensure those we leave behind at least have sufficient funds to carry on with life if we’re no longer around. That means putting plans in place to address unpleasant possibilities.

Types of life insurance

There are two main types of life insurance. The one most people need is ‘term’ insurance. This pays out if the policyholder dies within a stated period – the ‘term’.

The other type – ‘whole of life’ insurance – pays out on your death, whenever that occurs. This is more of an investment vehicle than a financial protection plan and is typically used for estate planning.

Dealing with debt

Term insurance pays out money that can be used to clear debts such as a mortgage, lifting a huge financial burden and enabling your loved ones to stay in the family home.

It can also provide for day-to-day living expenses – everything from groceries to utility bills, and from school and university fees to family holidays.

Key points

GET ENOUGH COVER

Buy sufficient insurance to take care of your family until the youngest is financially self-sufficient.

YOU BOTH NEED IT

If you’re in a couple, you both need cover, even if one of you stays at home. The proceeds can pay for services such as childcare and keeping up the house.

BUY SEPARATE POLICIES

Joint life insurance covers you both under one policy, but separate policies are more flexible and provide greater protection, although they cost a bit more.

WORK COVER ISN’T ENOUGH

Many firms offer ‘death in service’ life insurance. However, once you’ve worked out how much cover you need, you’ll probably realise this isn’t enough and you’ll need a policy of your own.

THE SOONER THE BETTER

The older you are, the more expensive life insurance is, so bite the bullet and buy young.

PUT YOUR POLICY ‘IN TRUST’

Doing so places the proceeds outside your estate so it can be paid to your beneficiaries without any delay associated with probate. It also keeps the money from the clutches of the tax man.

REVIEW REGULARLY

Monitor your life insurance coverage to make sure it keeps pace with your circumstances. Events such as marriage, the birth of children and moving home might prompt you to increase the amount of insurance you have.
It is important to take professional advice before making any decision relating to your personal finances.

So why don’t we do the same with ourselves? Insuring our incomes and also ourselves is something most of us don’t consider important because ‘it won’t happen to us’.

Questions to ask yourself are:

• If you were off work through long term sickness or if you had an accident or if you were struggling with mental illness, how long will your employer pay you for? Don’t assume they’ll look after you – check what your benefits are. How much income would you need replacing?

• If you suffered a major illness, for example cancer, heart attack or a stroke how would this impact on your ability to carry on working and earning money? Would a lump sum of money help you make lifestyle choices and take the pressure off having to work when you’re really poorly?

• What would you want to happen to your home if you died? Would you want your relatives, partner, parents to inherit this? If the answer is yes, then of course they can sell it to realise the value, however did you know they cannot do this until probate has been granted? This can take months or sometime even years! If there is a mortgage on your home, the lender will still want paying, so who’s going to continue to make payments until its sold?

As with a car, we can take out insurance on the basis of ‘just in case’.

Life cover – Is designed to pay a lump sum of money on death. You can insure any amount as long as your adviser can justify the figures. You can insure yourself for a specific period of time or for the whole of your life. Each person’s needs are different which is why there are different polices you can use. It is also possible to have a regular amount of money paid out to dependants rather than it being paid as a lump sum.

Critical Illness cover – This is also designed to pay a lump sum of money but instead of it paying out on death, this pays out on the diagnosis of a major illnesses, for example cancer, heart disease and stroke to name a few. Each insurer has a different list they cover you for however, most have around 35-40 specified conditions. Again, you can choose any amount as long as its justifiable and you can insure yourself for a specific term or the whole of your life.

Income Protection – This is different to Critical Illness cover. Its designed to replace most of your income if you are unable to work through accident, long term sickness or disability. This type of protection pays a regular income, tax free. The amount can be anything from just covering your basic outgoings, to as much as 65% of your gross earnings. This can be arranged to pay out for a short amount of time, like a year or right the way up until you retire. It is normally set up to start paying you a regular income once your employer stops paying you.

All these policies are standalone plans, the important thing to remember is they don’t have to be linked to a mortgage. As long as there is a need, its affordable, and justifiable, then you can take out as much as you want!