Mortgage Terms Explained!

Navigating the world of mortgages in the UK can feel like a puzzling journey, filled with unfamiliar terms and financial jargon. Our comprehensive jargon buster (similar to our insurance jargon buster) is here to unravel the complexity and help you gain a clearer understanding of the mortgage landscape. Let's dive into the essential mortgage terms, empowering you to make informed decisions and embark on your homeownership dreams with confidence.

Mortgage: A mortgage is a loan provided by a lender, usually a bank or building society, to finance the purchase of a property. The borrower (mortgagor) repays the loan, including interest, over an agreed period.

Interest Rate: The interest rate is the percentage charged by the lender on the mortgageamount. It determines your monthly repayments and can be fixed (stays the same) orvariable (changes with market rates).

Deposit: The down payment or deposit is the initial sum paid by the buyer towards theproperty's purchase price. It is expressed as a percentage of the property's value.

LTV (Loan-to-Value): The LTV is the ratio between the mortgage amount and the property'svalue. A lower LTV indicates a higher deposit and may lead to better interest rates.

Fixed-Rate Mortgage: A fixed-rate mortgage maintains the same interest rate for apredetermined period, offering stability and predictability in monthly repayments.

Variable-Rate Mortgage: A variable-rate mortgage has an interest rate that fluctuates withthe market, impacting monthly payments. It can offer flexibility but may lead to uncertainrepayments.

Remortgaging: Remortgaging is the process of switching your current mortgage to a newlender or product. It's often done to secure better rates or access additional funds.

Stamp Duty: Stamp Duty Land Tax (SDLT) is a tax paid when purchasing a property above acertain price threshold. The rate varies based on the property's value. (In Wales, Stamp Dutyis called Land Transaction Tax).

Equity: Equity is the difference between the property's market value and the outstandingmortgage amount. It represents the portion of the property you own outright.

At JLW Financial Solutions, we're committed to guiding you through every step of yourmortgage journey. Our team of advisers are here to answer your questions, simplify the process,and make your dream of homeownership a reality.

Mortgage Terms Explained!