Newspaper article The Journal (Newcastle, England)

Getting a Grip on Terminology; David Wilson Concludes His A-Z of Mortgage and Property Terms

Newspaper article The Journal (Newcastle, England)

Getting a Grip on Terminology; David Wilson Concludes His A-Z of Mortgage and Property Terms

Article excerpt

ALL too often, the "experts" expect us to understand their terminology. First-time buyers especially can expect to be confused by the array of words and phrases.

Here, some of the key phrases are explained in layman's terms.

Quotation WHEN considering your next purchase or mortgage, seek independent quotations for the appropriate mortgage amount. This will quickly identify, without commitment, what you can afford and what is available.

However, care needs to be taken with quick quotations as mortgage rates change frequently and it''s important to ensure the quote represents your true financial situation.

Repayment mortgage REPAYMENT mortgages are where the monthly payment to the mortgage repays both the interest and capital (the amount borrowed) over the term.

The repayment amount is based on the interest due on the outstanding balance and a percentage of the capital calculated over the term. Repayment mortgages, subject to monthly payments being maintained, will result in the balance being repaid at the end of the term (this is unlike interest only mortgages where the capital remains at the end of the term).

Stamp duty STAMP Duty Land Tax is a tax paid to the government on the purchase price of a property over a specific threshold (pounds 125,000).

The tax is payable on a sliding scale subject to the value of the purchase price, payable upon completion. When considering properties to buy it is vital to understand and budget for any associated duty. For more details go to www.hmrc.gov.uk Tracker mortgage THE interest rate of a tracker mortgage will "track" the movement of either the Bank of England''s or a mortgage lender''s base rate. The rate payable will vary dependent on the rate set by either institution which means mortgage payments are subject to increase/decrease on a monthly basis.

Under-insured THIS is the gap between any insurance, for example home insurance or life insurance, and the insurable interest (the value of the insured item). …

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