Glossary - Click on the headings to see the definition

Or impaired credit mortgages are specialist loans for customers whose credit problems disqualify them from using mainstream lenders' standard products. Some lenders specialise in loans like these, which are also known as adverse mortgages

APR stands for Annual Percentage Rate. A lender is always required to quote the APR when advertising a loan or borrowing rate. The lender will usually quote the headline rate and the APR next to it. The headline rate states the rate of interest you pay per month or per year on the mortgage, while the APR is based on the total amount that will be paid over the entire period of the loan. It also takes into account any charges that the borrower has to pay during the loan period

The UK's core interest rate set by the Bank of England. The lender's Standard Variable Rate (SVR) is higher than the Base Rate, but is often adjusted by reference to it

Insurance cover which protects the holder against damage to the property itself (although it can be linked with contents insurance in a combined policy). The amount insured may vary from the purchase price/valuation of the property depending on the type of location of the property. The valuer will usually provide a rebuild cost for insurance purposes.

The practice of buying a house or flat for investment purposes. Income is provided by the tenants' rent and capital growth (if any) by the property's increasing resale value.

In the context of mortgages, a capital and interest mortgage is also known as a repayment mortgage. It involves paying all of the interest plus repayment of a little of the capital each month; an interest only mortgage involves only paying off the interest.

The final stage of the house-buying process, which comes after exchange of contracts. The sale must proceed after Exchange, but Completion occurs when the property's agreed sale price (less any deposit already paid) safely reaches the seller's bank account.

Insurance cover which protects the personal belongings your home contains. In the case of rented accommodation, the landlord is responsible for insuring those contents which he owns, but not those owned by his tenants.

Normally carried out by a solicitor or licensed conveyancer on the buyer's behalf, conveyancing includes proving the property is really owned by its seller, making sure that all the loans secured on it are discharged, establishing its legal boundaries and searching local planning information for upcoming developments which could affect the property's value.

If a County Court rules against you for defaulting on a debt, that ruling is listed on your credit record. Having such a judgement listed against you may mean you are turned down for future loans, or expect to pay a higher rate than other customers.

When assessing your application, a mortgage lender will study your credit records. These records are held centrally by credit reference agencies, and contain information from many different aspects of your life.

The formal written document which lists exactly who owns a property and enables transfer of a property's ownership from seller to buyer. A mortgage lender will record details of their mortgage on these deeds (which means they can take ownership of the property if you default on the loan payments).

In the context of mortgages, the deposit is the initial lump sum payment which the buyer must contribute to the property's total purchase price.

A charge levied by the mortgage lender on the customer in the event that the loan is repaid in full or in part before a date specified in the contract. Fixed-rate, capped-rate, cashback and discount rate mortgages commonly carry early repayment charges that can in some cases persist long after the initial special rate itself has expired. This can make it prohibitively expensive to move to a rival lender in the first few years of the loan.

The terms of a property's purchase become legally binding for both parties when contracts are exchanged. The buyer is then committed to buying, and the seller to selling.

Some lenders offer specialist graduate mortgage products. These tend to provide higher loan to value ratios and sometimes lower initial interest rates.

A mortgage which allows borrowers to make overpayments when they have spare cash. Other features could include the option to reduce or miss payments altogether when times are tight, and to reborrow any overpayments. Not all flexible mortgages offer all of these features. Often useful for self-employed people whose income varies from one month to the next. The most flexible form of mortgage is a Current Account Mortgage (CAM), which can potentially save you money by linking your current account and mortgage together.

An interest only mortgage is where you simply pay the lender the minimum amount to cover the interest on your loan and invest enough each month in a repayment vehicle to build up a large enough fund to pay off the capital part of the mortgage, when it becomes due at the end of the agreed term.

This is an insurance premium that you have to pay for some mortgages, usually when the Loan to Value is higher than a certain figure. It protects the lender to some extent if you default on the mortgage for any reason. It is important to understand that although you have to pay the premium, the lender benefits from any payout and that if the payout doesn't cover their costs they may seek further money from you. With many mortgages you can add the Higher Lender Charge to the loan, unless this takes your Loan to Value over a certain figure. The insurer may pursue the defaulter for reimbursement of any monies which have been paid out in respect of lenders claim.

This is the amount you want to borrow divided by the purchase price. In other words, it reflects the size of your deposit. Generally, the lower the loan to value, the safer the lender will view the loan.

A mortgage loan funded by simple monthly repayments, calculated to repay capital and interest.

The means by which a mortgage loan's capital is repaid. Examples include endowment policies, ISAs, and pensions.

A mortgage lender's main interest rate. Fixed-rate and discount loans usually switch to SVR when the special offer period expires

Stamp Duty
 If you buy either a freehold or a leasehold property and the purchase price is more than £125,000, you pay Stamp Duty Land Tax (SDLT) of between one and four per cent of the whole purchase price. See the table below for more detail.
If the purchase price is £125,000 or less you don't pay any SDLT.
First-time buyers
If you are a first-time buyer the threshold for when you start to pay SDLT is £250,000. This is only if you have never owned a house or flat in the UK or anywhere else in the world. If you are buying with someone else they must never have owned property before either. This higher threshold applies to purchases made on or after 25 March 2010 and before 25 March 2012.

An expert examination of the property you are considering buying, aimed at discovering any structural flaws or repairs needed

The period of time over which your mortgage will run.