A credit check is a facility used to check your past credit, payment habits and any existing loans and credit you have. It can also be used to assess how risky it is likely to be to lend you money. Credit checks can either be ‘soft’ and not impact your report, or ‘hard’ which will… Read more »
Mortgage FAQs Category: Phrases
Agreement in Principle (AIP)
Also known as a Decision in Principle (DIP). As part of the application process, the lender will ask questions about you and the mortgage you’re applying for. They will carry out a credit check and then they will make a decision about whether they are likely to be able to offer you a loan for the… Read more »
Early Repayment Charges (ERCs)
These are charges you will have to pay to your lender if you choose to come out of your mortgage early. Either because you want to sell the house, or you want to pay off all, or some of the mortgage you owe. Sometimes you can make overpayments without penalty – be sure to ask… Read more »
The ‘term’ of your mortgage product
A mortgage term is the length of time (often 25 years although it could be more or less) between the lender giving you the money to buy the house and you having to repay that amount in full. Your monthly payments will be calculated based on this term.
Variable rate
Variable interest rates are set in line with the Bank of England base rate. If you choose this option, as this base rate increases or decreases so will your payments. A few questions you should consider: In the current climate is a variable rate a good idea? Would I be able to afford my payments… Read more »
Fixed rate
When your mortgage first begins there will be a period, usually lasting two or five years, where you can choose to ‘fix’ your rate. This means the rate of interest you are paying will not change during that time, even if the Bank of England base rate (against which lenders set their interest rates) changes…. Read more »
Mortgage
A mortgage is a loan secured against your property. You will own the property, but you will have to repay the loan to your lender by making a monthly payment to them according to an agreed schedule. If you don’t make these payments, the lender will have a right to repossess your property. This would… Read more »