Mortgage words, in plain English

• Buying a home

  Agreement in principle

  A lender's note of how much they'd probably lend you, after a quick look at your income and credit file. It isn't a promise, but it shows estate agents you're a serious buyer.

• Buying a home

  Valuation

  The lender has the home valued to check it's worth what you're paying. It's for the lender, so it tells you little about the condition of the home.

• Buying a home

  Underwriting

  The lender's team checks your application, your documents and the valuation, then decides whether to lend. If they come back with questions, we deal with them together.

• Buying a home

  Mortgage offer

  The lender's formal offer once underwriting is done. It sets out the loan, the rate and the terms, and it has an expiry date, so keep an eye on it.

• Buying a home

  Exchange of contracts

  You and the seller swap signed contracts and you pay your deposit. From this point the purchase is legally binding, so your buildings insurance needs to start here.

• Buying a home

  Completion

  The day the rest of the money goes to the seller and the home becomes yours. For most people it's also the day you get the keys.

• Buying a home

  Searches

  Checks your solicitor runs with the council and others, such as local authority and environmental searches, to find anything that could affect the home.

• Buying a home

  Title

  The legal record of who owns the property and what rights come with it. Your solicitor checks it so there are no disputes or nasty surprises.

• Buying a home

  Leasehold

  You own the home for a set number of years, but not the land it stands on. Your solicitor talks you through the lease, the service charges and the ground rent.

• Buying a home

  Staircasing

  With shared ownership, buying more of your home bit by bit, often until you own all of it and stop paying rent on the rest.

  Shared ownership
• Mortgage types

  Fixed rate

  Your interest rate stays the same for a set time, often 2, 3, 5 or 10 years, so your monthly payment doesn't change. After that it usually moves to the lender's standard variable rate.

• Mortgage types

  Tracker (variable rate)

  Your rate follows a benchmark, usually the Bank of England base rate. When that rate goes up or down, your monthly payment moves with it.

• Mortgage types

  Standard variable rate (SVR)

  The rate the lender moves you onto when a fixed or tracker deal ends. It's usually higher and the lender can change it, so it pays to look at a new deal before then.

• Mortgage types

  Discounted rate

  A set discount off the lender's standard variable rate for the first few years. Your payment can still rise or fall when the SVR changes.

• Mortgage types

  Capped rate

  Your rate can move, but it can't go above a set ceiling for a set time. You're protected if rates rise, though the deal may limit what you save if they fall.

• Mortgage types

  Repayment

  Each monthly payment covers the interest and some of the loan itself, so the amount you owe goes down and by the end of the term the home is yours outright.

• Mortgage types

  Interest-only

  You pay only the interest each month, so the loan stays the same size. You need a separate plan to pay back the whole amount at the end of the term.

• Mortgage types

  Offset

  Your savings sit beside your mortgage and cut the interest you're charged. You keep the savings, and you can pay the mortgage off sooner or pay less each month.

• Mortgage types

  Flexible

  Lets you overpay, underpay or take a payment break, within the lender's rules. Overpaying can shorten your mortgage and cut the interest you pay.

• Mortgage types

  Joint Borrower Sole Proprietor (JBSP)

  A JBSP mortgage lets someone, usually a parent, join your mortgage without owning the property. Their income can help increase how much you can borrow. You own the home, but everyone on the mortgage is responsible for repaying it.

  Help from family
• Mortgage types

  Buy to let

  A mortgage for a home you plan to rent out. Lenders have different rules for these and often look at the rent the home could bring in.

  Buy to let
• Costs

  Deposit

  The part of the price you put in yourself, typically 5% to 20%. A bigger deposit can open up more deals, but some lenders offer up to 100% mortgages.

  No deposit?
• Costs

  Solicitor fees

  What you pay a solicitor or conveyancer for the legal work: searches, title checks, contracts and sending the money on completion. Ask for a full quote before you start.

• Costs

  Homebuyer Report

  Also called a RICS Level 2 survey. You pay for it, and it looks at the condition of the home and points out any big problems. It suits newer homes and ones in standard condition.

• Costs

  Building Survey

  Also called a RICS Level 3 survey. It's the most detailed survey, once known as a full structural survey, and worth having for an older home, one in poor condition, or if you plan big works.

• Costs

  Early repayment charge

  A fee some lenders charge if you pay off the loan, or move it to another lender, during a fixed or discounted deal. Check it before you remortgage.

• Costs

  Our advice fee

  There may be a fee for mortgage advice, payable when you make your full mortgage application. The exact amount depends upon your circumstances, but will range from £495 to £995, and this will be discussed and agreed with you at the earliest opportunity. The first call is free and doesn't commit you to anything.

  Book a free call
• Protection

  Buildings insurance

  Covers the structure of your home against things like fire, flood, storms and subsidence. Lenders insist on it, and you need it in place from exchange of contracts.

  Protecting your home
• Protection

  Contents insurance

  Covers your belongings against theft, damage or loss. It isn't compulsory, but it's well worth having once you move in.

• Protection

  Life insurance

  Pays out if you die, so your family can clear the mortgage or cover other costs. It isn't compulsory, but it matters if anyone relies on your income.

  Cover for your family
• Protection

  Critical illness cover

  Pays a lump sum if you're diagnosed with a serious illness named in the policy. It can keep up the mortgage if you can't work.

• Protection

  Income protection

  Pays you a monthly income if illness or injury stops you working, to help with the mortgage and the bills.

  Protection advice

No word matches that yet. Ask Andy and he'll explain it.