Admissible income - this is your annual income, minus any outstanding commitments, such as, loans, credit cards, hire purchase, and is the figure your income calculation is based on.
Advance - the amount of your mortgage.
APR (Annual percentage rate) - an APR is an interest rate calculation designed to reflect the total cost of credit over the whole term of the mortgage.
Arrears - term used if a mortgage repayment is missed.
Annual interest - this is a method of calculating interest on a mortgage. Interest is charged on the balance of the advance to the end of the year. Each year interest is charged on 1st January using the balance outstanding on 31st December of the previous year.
Arrangement fee - the charge that may be made to cover the cost of providing a mortgage (not all of our mortgage products have an Arrangement fee). This fee is normally payable on completion of your mortgage and may be added to your mortgage account.
Asking price - the price the seller is asking for the property.
ASU - Accident, sickness and unemployment cover (ASU). This covers mortgage payments when earnings are lost through accident, sickness or unemployment.
Bank of England Base Rate (BBR) - the rate of interest set by the Bank of England.
Base rate tracker - a type of mortgage product where the interest rate is linked to the Bank of England Base rate for a set period. The monthly mortgage payments can vary.
Booking fee - The charge that may be payable at the time you submit a mortgage application. The fee cannot generally be added to the mortgage account or refunded.
Buildings insurance - insurance against the cost of repairing your property.
Buy to let mortgage/remortgage (BTL) - mortgage products for new or existing landlords.
Capped rate mortgage - a variable rate mortgage which will not rise above a pre-agreed rate of interest during a defined period (usually between two and five years).
Completion - the final legal transfer of the property, where the outstanding balance is paid to the seller and the buyer receives the keys of the property.
Contract - the written legal agreement between the seller and the buyer with regard to the property.
County Court Judgement (CCJ) - this is usually made for non-payment of a debt by a County Court. A CCJ will be registered on your credit record and may affect your credit rating, and therefore your ability to obtain a mortgage.
Conveyancing - the legal work involved between the seller and the buyer.
Credit scoring - method used to assess an applicant's ability to repay a mortgage, most lenders use this method.
Capital payments and overpayments - an additional payment to a mortgage account, over and above the required monthly mortgage payment.
Daily interest - this is a method of calculating interest on a mortgage. Interest is charged to the account on the first of each month based on the number of days in the month and the balance outstanding on the last day of the previous month.
Deeds - legal documents signifying the owner's legal entitlement to the property.
Deposit - the amount of money the buyer must pay when the contracts are exchanged. The amount that is required varies dependant on the specific product terms and conditions, however as a guideline the minimum you should have is 5% of the purchase price.
Disbursements - fees involved in the legal work carried out by your solicitor includes search fees, land registry fees etc.
Discounted rate mortgages - a mortgage where you receive a discount off the Standard Variable rate for an agreed period.
Early repayment - paying off all or part of your mortgage before the end of the agreed term.
Early repayment charge (ERC) - the penalty fee charged if you pay your mortgage off early or remortgage within an agreed period (usually linked to the period the interest rate is discounted, capped or fixed). See also Scheme Release Fee.
Endowment mortgage - with an endowment mortgage you take out an assurance policy designed to repay the mortgage either on death or at some other time in the future. In the meantime only the interest portion of the mortgage is paid until the policy matures. The value of the policy is not guaranteed on maturity and may not provide enough capital to repay your mortgage.
Equity - the difference between the value of the property and the amount of any loans secured against it.
Exchange of contracts - where both the buyer and the seller are legally bound to the transaction.
Fixed rate mortgages - a type of mortgage where you pay a fixed rate of interest over an agreed period, allowing you to budget more easily.
Fixtures and fittings - all items in the house that are not part of the actual building, but may be included in the sale (e.g. cooker, dishwasher, washing machine, light fittings etc).
Flexible mortgage - a mortgage that enables you to pay more than your regular payments each month, helping you pay your mortgage off early and saving thousands of pounds in interest. Interest is calculated daily on flexible mortgages and they often include other features such as short payment breaks.
Floor rates - this is where the interest rate on your mortgage can go no lower than a predetermined figure (the floor). These are normally used in conjunction with a capped rate mortgage. The monthly mortgage payments can vary.
Freehold - ownership of property and the land it stands on.
Gazumping - when your offer on a property has been accepted then another buyer puts in a higher bid and your offer is then rejected by the seller.
Higher lending charge (HLC) - a charge made when you take out a high Loan to Value (LTV) mortgage that protects the lender against you defaulting on the loan.
Homebuyers report - a more detailed inspection than a standard valuation. It lists only faults that are obvious to the valuer. It is not a full structural survey.
Income multiplier - this is the formula lenders use to decide how much to lend to you, based on your income. Lenders will use different formulas.
Income protection - insurance designed to pay your mortgage if you are unable to earn an income, due to an accident, sickness or unemployment.
Interest only/investment backed mortgages - you pay just the interest on the loan each month. Interest only mortgages are normally arranged with a savings vehicle (eg endowment policy) intended to pay off the loan at the end of its term. The value of the policy is not guaranteed on maturity and may not provide enough capital to repay your mortgage.
Intermediary/introducer - someone other than a financial institution who offers advice on mortgages.
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Key Facts Illustration (KFI) - provides all the important information you need to help you decide if a mortgage is suitable for you. All organisations who offer mortgages are legally bound to provide a Key Facts Illustration.
Landlord - someone who owns properties which they rent out.
Land registry fee - a fee paid to register ownership of a property.
Leasehold - property ownership where the property is leased by the owner to a leaseholder or tenant for a fixed number of years.
Lender - the organisation who your mortgage is with.
Lending criteria - this is used to decide how much a lender will lend you and what type of property they will lend on.
Lessee - the person to whom a lease is granted.
Lessor - the person who grants a lease.
Life assurance - a policy payable either upon the death of the homeowner or by a specified date.
Loan - the total amount you have borrowed.
Loan to value (LTV) - the size of the mortgage as a percentage of the property's value.
Monthly repayment - the amount you pay to your lender each month.
Mortgage - a loan made against the security of a property.
Mortgage agreement - a document that shows the seller that you can afford to buy the property.
Mortgage protection - life assurance cover designed to clear your borrowing in the event of death.
Mortgage term - how many years you choose to have your mortgage over, e.g. 25 years.
Mortgage offer - if a lender approves an application for a mortgage, they will make you an “offer”; this will be subject to the lender's terms and conditions.
Mortgagee - a bank, building society or other lender who lends the money for the mortgage.
Mortgagor - the person who borrows money and whose property secures the loan.
Negative equity - where the market value of your house is less than the outstanding mortgage, e.g. if the outstanding mortgage is £100,000, but the market value of your property is £80,000, then you have £20,000 of "negative equity".
Overall cost for comparison (APR) - this figure shows the total yearly cost of a mortgage as a percentage of the loan and includes any fees for the setting up and redemption of the specific scheme. All lenders that provide mortgages must show an overall cost for comparison, so that customers can compare the costs involved before deciding which mortgage is right for them.
Payment holiday - a facility allowing you to miss your normal monthly mortgage payments for an agreed period of time. Interest continues to accrue.
Principal - the amount of the mortgage on which interest is calculated.
Privilege rate - a special rate for Coventry mortgage customers with a residential mortgage who remain on the same product or Standard Variable Rate for a five year period.
Portability - the facility to take your Coventry mortgage with you if you move from one property to another - subject to terms and conditions of the mortgage product.
Pension linked mortgages - this type of mortgage may be suitable for self-employed customers or those not in a company pension scheme. They are similar to an endowment mortgage, but with the monthly premium paid towards a personal pension plan. Premiums are invested into a tax-free fund. When you retire, part of the fund will be used to repay the mortgage, whilst the rest may provide a regular pension for you.
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Redemption (redeem) - repayment of a mortgage loan in full.
Repayment mortgage - you repay part of the capital and the interest on the mortgage each month. Under this option, if all repayments are made, your mortgage will be repaid in full at the end of the agreed term.
Repayment vehicle - refers to savings plans which are used to pay off your mortgage at the end of the term, i.e. endowment, pension etc.
Remortgage - term used to describe when you move a mortgage from one lender to another without moving house.
Remortgage transfer service - a service from the Coventry which takes care of the legal work involved in remortgaging your property to the Coventry.
Retention - this is where a lender withholds some or all of the mortgage advance until certain works have been carried out on the property, i.e. release the money in stages.
Right to buy - a scheme designed for tenants who wish to purchase the property they are renting.
Scheme Release Fee - Transferring your mortgage to a new scheme - when you transfer your mortgage to a new scheme, a Scheme Release Fee will be payable (where applicable) to recover the cost incurred by the Society for the initial benefit you received on your current mortgage scheme. The amount of the fee will be determined by the terms and conditions of your current mortgage scheme. See also Early Repayment Charge (ERC).
Search - a legal investigation to establish what charges exist on a property and to determine if it is affected by planning applications etc.
Self-certification - a type of mortgage specifically for customers who are self-employed.
Stamp duty - a Government tax based on the property purchase price.
Standard variable rate (SVR) - the interest rate at which a lender's standard mortgages are set.
Structural survey - a detailed inspection of a property to check that it is structurally sound.
Subject to contract - occurs when the sale of the property has been provisionally agreed. It allows the buyer or the seller to withdraw without incurring any penalty.
Term of mortgage - the period of time (years) over which a mortgage is repaid.
Transfer - a deed which transfers ownership of a property.
Title - the ownership of a property.
Under offer - the term used when the seller of a property has provisionally accepted a buyer's offer.
Valuation - inspection of the property which establishes its market value and security for a mortgage.
Vendor -the person selling the property.
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