Glossary - Remortgages

Adverse Credit
Those individuals with a poor credit history fall into this category. Adverse credit may include CCJ's, mortgage arrears, bankruptcy, IVA's or the repossession of a home.

CCJ (County Court Judgement)
The County Court issues CCJ's to individuals who need to repay a debt. CCJ's will show up on a Credit Report.

Equity
This is the value of your home, minus the amounts you owe on secured loans and mortgages.

Arrangement Fee
Some lenders may charge an arrangement fee. This is sometimes known as the booking fee. It is the charge that covers administration and reserves funds for fixed, tracker and/or discounted rate mortgages. Lenders usually allow this to be added to the mortgage loan.

Early Repayment Charge
This charge may be payable on certain discounted or fixed interest rate loans. It only applies if you redeem or part redeem the loan within the specified early repayment charger period.

Mortgage Deed
A mortgage deed is the legal document confirming that you have a mortgage on your home or property.

APR (Annual Percentage Rate)
This stands for Annualised Percentage Rate. It is the best way to compare loan quotations. When you take out a loan, the number of repayments you must make, and the exact date they must be paid by, will be clearly stated in your loan agreement. As these details are defined precisely, the annual rate of interest over the period of the loan can be calculated exactly and must be shown on advertisements by law. All arrangement fees and any other costs must be included in the calculation.

Discounted rate remortgage
A lower variable interest rate charged on a mortgage for a set period at the beginning of the mortgage term. The rate and monthly repayment will fluctuate depending on the variable base rate changes.

Interest only remortgages
The borrower pays only the interest on the mortgage debt each month without repaying any capital. Borrowers are required to repay the full sum owing on the mortgage at the end of the mortgage term.

Negative Equity
This happens when the amount owed on a mortgage exceeds the value of the property.

Completion
This is also known as 'drawdown', which is the start of the mortgage. It is the point at which your new mortgage arrangements begin.