Kingswood Associates - commercial finance specialists
established 1997

KINGSWOOD ASSOCIATES

property finance specialists

0845 230 3 230
Kingswood Associates Ltd
4 Museum Place
Cardiff
CF10 3BG
Kingswood Associates Ltd Berkeley Square House
Mayfair, London
W1J 6BD





Buy to Let & Residential Team – 029 2035 3085
Commercial & Development Team – 029 2035 3080
enquiries@kingswoodassociates.co.uk

Glossary of Key Terms

A

Annual Percentage Rate (APR)

The yearly cost of credit, including not just the rate of interest, but also associated costs. These rates are used to compare the cost of borrowing money from different lenders.

Arrangement Fee

The charge placed by the lender for the arranging of the mortgage. Most, but not all, lenders charge a Valuation Fee.

Arrears

Overdue debt payments that should have been made and are building up over time.

Asset Finance

Finance raised against business assets and equipment. The finance can be secured against existing assets and equipment or the value of new ones purchased with the funding.

B

Bank of England Base Rate (BBR)

An interest rate set monthly by the Bank of England. Financial companies use the Base Rate to set the interest rates they charge on debts.

Bridging Loan

A temporary loan. Often advanced to help someone buy a new property before they have sold their existing one. Also referred to as Gap Finance or Swing loans.

Business Rescue Finance

Finance gained in order to help a struggling company.

Business Start-up Finance

Finance gained in order to start a new company.

Buy-to-let Mortgage

A mortgage intended for people who buy a property to rent out.

C

Capital and Interest Mortgage

The type of mortgage where both the you capital (the amount of money borrowed) and some of the interest is paid off each month. Often also referred to as a repayment mortgage.

Cash Flow Funding

When a company sells its accounts receivable invoices to a third party in exchange for funding. Often referred to as Factoring.

Completion

The date set at which a property purchase process ends. The balance of the purchase price is paid by the purchaser to the seller ownership is transferred.

Conveyancing

The legal processes involved in buying and selling property.

Covenants

Enforceable conditions contained within deeds that the buyer must comply with. Positive covenants require that something like build on or maintain the property be undertaken. Negative (Often called Restrictive) covenants prevent the buyer from doing something, such as not building or not changing the facia of a house.

D

Decision in Principle

Given to a mortgage buyer by a lender before they start the formal loan application process. The decision in principle lets the buyer know the amount they can afford before they start looking for properties. Also referred to as Offer of Advance.

Discounted Rate

A rate of interest that is reduced during the initial period of the loan.

E

Early Repayment Charge

A charge payable on certain loans and mortgages if they are repaid before a set time, usually before the end of the incentive period. Also known as a Settlement Charge.

Equity

When a house is worth more than the mortgage on it the difference is known as the Equity. For example, if an outstanding mortgage is £100,000 and the property is worth £150,000, there is an equity of £50,000.

F

Factoring

When a company sells its accounts receivable invoices to a third party in exchange for funding. Often referred to as Cash Flow Funding.

Fixed rate

A type of mortgage where the repayment rate is fixed for a set period of time.

Flexible Mortgage

A type of mortgage that contains features such as the ability for borrowers to make overpayments when they have spare cash, the option to reduce or miss payments inn the short-term, and to re-borrow any overpayments.

Freehold

Legal title that gives the freeholder absolute ownership of the land their property is on.

G

Gap Finance

A temporary loan. Often advanced to help someone buy a new property before they have sold their existing one. Also referred to as a Bridging or Swing Loan.

H

Homebuyers Report

A report by a surveyor on the condition of a property being considered for purchase. This is more detailed than a valuation but less detailed than a structural survey.

I

Interest-only

A type of mortgage where only the interest is paid-off every month, not the capital.

Introducer
An individual or company that recommends a client uses a certain lender or broker. Introducers usually receive commission for any business resulting from the introduction.

J

Joint Mortgage Agreement

A loan where there is more than one named individual responsible for repayments.

L

Landlord

A person who owns a property but leases it to others.

Leasehold

This means a person has rights over a property for a set period of time but not the land the property is on. After this period, ownership of the property reverts to the freeholder.

London Inter-Bank Offered Rate (LIBOR)

This is the amount of interest banks in the City of London pay each other for loans.

Loan to Value (LTV)

The mortgage amount expressed as a percentage of the property value. For example, if you borrow £85,000 and your property costs £100,000, then the loan to value is 85%.

M

Mezzanine Finance

A top-up loan offered over and above the loan from a bank. Often used by property developers to secure 100% funding.

Mortgage

A type of loan used to buy a property. The loan is secured against the property as security for the lender in case the buyer fails to repay the loan.

N

Negative Equity

When the value of the outstanding mortgage is more than the market value of the property.

O

Offer of Advance

Given to a mortgage buyer by a lender before they start the formal loan application process. The offer lets the buyer know the amount they can afford before they start looking for properties. Also referred to as Decision in Principle.

P

Principal

The amount of the loan on which interest is calculated.

Property Development Loan

A loan taken in order to develop residential or commercial property through renovation, extension or construction.

R

Redemption Penalty

Charges included in a loan agreement that will be imposed on the customer if they repay the loan early.

Remortgage

A mortgage loan which replaces another mortgage. The mortgage is moved but the property stays the same.

Repayment Mortgage

The type of mortgage where both the you capital (the amount of money borrowed) and some of the interest is paid off each month. Often also referred to as a Capital and Interest mortgage.

Repossession

Where a lender takes possession of the property because they have failed to make numerous mortgage repayments.

S

Self-Build Mortgage

A type of mortgage aimed for people building their own property. The loan is paid out in stages as the construction advances.

Self-Invested Personal Pension (SIPP)

A type of pension plan selected personally by most investment industry insiders. SIPPs normally provide access to a wider range of investments than a typical personal pension.

Settlement Charge

A charge payable on certain loans and mortgages if they are repaid before a set time, usually before the end of the incentive period. Also known as an Early Repayment Charge.

Small Self-Administered Scheme (SSAS)

A self-administered pension scheme which is defined as one having less than 12 members.

Stamp Duty

A tax payable upon the purchase of a property. Some properties are exempt from Stamp Duty due to their value and/or location. For further information see the HM Revenues & Custom site here.

Structural Survey

A full survey carried out on a property by a surveyor. This is the most extensive check of the property, both on the outside and inside and should detect most faults. This service is optional and costs more than the Homebuyers survey but provides greater protection for the potential buyer.

Sub-Prime Mortgage

A type of mortgage aimed at people with adverse credit. Sub prime borrowers have either missed or been late with payments in the past.

Swing Loan

A temporary loan. Often advanced to help someone buy a new property before they have sold their existing one. Also referred to as a Bridging Loan or Gap Finance.

T

Title Deeds

The legal documents which prove the ownership of a property or land.

Tracker Mortgage
A type of mortgage where the rate tracks the Bank of England base rate by a set percentage for a set period of time.

U

Under Offer

A term applied to a property where the seller has provisionally accepted the buyer's offer.

Undertaking

An undertaking is a condition of mortgage where the borrower must carry out certain works within a set time period.

V

Valuation

The figure that a Surveyor will decide upon regarding the price of a property. A valuation is undertaken to ensure that the property is worth the amount requested for a mortgage.

Valuation Fee

The charge for the valuation of the property. Most, but not all, lenders charge a Valuation Fee.

Variable Rate Mortgage

A type of mortgage where the rate payable against it can go up or down over time depending on variables such as the Base rate.

Call our team now on 0845 230 3 230 to discuss your options further or fill in our online enquiry form and we’ll be in touch.
Kingswood Associates Ltd is authorised and regulated by the FCA (Financial Conduct Authority) for Consumer Credit business – FRN 711245.
Your Home may be repossessed if you do not keep up payments on your Mortgage.
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