Other Terminologies
Like any other legal system, the mortgage business sometimes uses confusing jargon.
Below are some terms explained in simple language.
Advance
This is the money you have borrowed including all the additional fees.
Base Rate
This is the base interest rate. In the United States, this value is set by the Federal Reserve and is known as the Discount Rate.
Bridging Loan
This is a temporary loan for the barrower to purchase a new property before he/she sells his/her current property.
Conveyance
This is the legal document that transfers ownership of unregistered land.
Disbursements
These are all the fees paid to the lawyers and governments, such as stamp duty, land registry, search fees, etc.
Early Redemption Charge / Pre-Payment Penalty / Redemption Penalty
This is the amount of money due if the mortgage is paid in full before the time finished.
Equity
This is the market value of the property minus all loans outstanding on it.
Freehold
This means the ownership of a property and the land.
Land Registration
Also known as a Title. This is a legal document that records the ownership of a property and land.
Leasehold
This means the ownership of the property and land for a specified period, which may be sold separately from freehold, which may be owned by another person.
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 states that the lender has a legal charge over the property.
Mortgage Payment Protection Insurance
This is a type of insurance, which ensures that the current mortgage payment will be paid if the borrower is unable to do so.
Private Mortgage Insurance
This is a type of insurance that the lender has the borrower take for loans over 80% of the appraised value. This will pay the lender only the owed portion up to 80% on a defaulted loan.
Sealing Fee
This is a fee made when the lender releases the legal charge over the property.
Subject To Contract
This is an agreement between the seller and the buyer before the actual contract is made.
