Glossary of Terms

BUY TO LET MORTGAGE
A Loan secured against a property for the purpose of letting the property out for a rental income.

DECISION IN PRINCIPLE
An application to a lender without any property details. This will involve a credit search and assessment, to establish whether the lender could lend the amount requested. This is not a formal offer and will be subject to a full application and valuation of the property.

FIRST TIME BUYER
An individual or individuals buying a property for the first time.

LOAN TO VALUE (LTV)
LTV or Loan-to-Value is a ratio of the size of your mortgage loan compared to the value of the property and expressed as a percentage.

MEMORANDUM OF SALE
Written confirmation of an offer made on a property to purchase,  typically issued by an estate agent. This includes the details an offer accepted on the property. This may include the names of the seller and buyer and their legal representative and the detail of the offer being accepted.

MORTGAGE
A loan which is secured against a property. This means, if the loan is not repaid the lender would have the right to take possession of the property should the repayments not be met. They can then sell the property to repay their loan.

REMORTGAGE
Remortgaging is the transfer of a mortgage from one lender to another. You continue to live in the same house, but your monthly payments are made to a different lender. The purpose of Remortgaging is often to obtain a more favourable interest rate when your current deal has expired, but it may also be used to raise additional funds – for home improvements, to repay other debts etc.

SHARED EQUITY
Shared equity mortgages are a type of property financing where the buyer purchases a share of the property while a third party, typically a housing association or the government, provides the remaining share as an equity loan.

SHARED OWNERSHIP
Shared ownership schemes are provided through housing associations. You buy a share of your home (25% to 75% of the home’s value) and pay rent on the remaining share. You’ll need to take out a mortgage to pay for your share of the home’s purchase price. Shared ownership properties are always leasehold.

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