Learn how an Agreement in Principle can fast-track your mortgage application, make you a credible buyer in the eyes of estate agents and sellers, and help you secure your dream home

Mortgage arrears occur when a borrower fails to make required mortgage payments on time. Once a payment is missed, the borrower is said to be “in arrears.” It’s important to note that falling into mortgage arrears can have serious consequences. The lender may charge late fees, and if the situation isn’t addressed, it can lead

The Bank of England is the UK’s central bank. The Bank of England is responsible for Its mission is to promote the good of the people of the United Kingdom by maintaining monetary and financial stability.

What is the base rate? The Bank of England base rate, also known as the ‘Bank Rate’, is the interest rate that the Bank of England lends money to banks and financial institutions in its capacity as the central bank. Why does the base rate matter? The base rate used as the benchmark for interest

What is a Building Society? A building society is a financial institution that is owned by its members. These institutions are similar to banks in that they provide banking and related financial services to their customers, but they primarily focus on providing home mortgage loans. Members of building societies are usually savers and borrowers. Unlike

What is a central bank? A central bank is a financial institution responsible for managing a country’s currency, money supply, and interest rates. It’s typically the regulator of the country’s financial system and its commercial banking system. For more on the UK’s central bank and what it does, see our article article on the Bank

Learn what a Credit Reference Agency is and why it might hold the keys to your mortgage approval.

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In most cases banks or Building Societies will not lend a borrower the full purchase price of a property. The buyer will have to come up with some of the money themselves. A deposit, also known as a down payment, is the upfront payment that a buyer makes towards the purchase price of the property.

Early repayment of a mortgage occurs when you pay off your mortgage before the end of the agreed-upon mortgage term. This can involve making regular overpayments or paying off the entire outstanding balance in one lump sum, perhaps using money from savings, an inheritance, or the sale of another property. While early repayment can result

What are Early Repayment Charges? An Early Repayment Charge is a fee that mortgage lenders may charge if you pay off your mortgage earlier than agreed. An early repayment charge could be triggered if you make overpayments beyond the agreed limit or if you pay off the entire mortgage balance before the end of the

An emergency fund is a store of money put aside by a household to be used in the event of emergencies. The optimal size of an emergency fund depends on individual circumstances and how unpredictable the future looks but a good goal is 3-6 months worth of household expenses. Examples of emergencies might be a

Learn what a fixed-rate mortgage really means for you as a first-time buyer. Discover the pros, cons, and how to determine if it aligns with your homeownership goals.

A gifted deposit refers to a sum of money given to a buyer, usually by a family member, to help them purchase a property. A gifted deposit acts as part or all of the deposit required for the mortgage. When it comes to gifted deposits in Scotland, there are several considerations and rules to keep

A guarantor mortgage is a type of mortgage designed to help individuals who might not otherwise be able to secure a mortgage on their own, often due to a limited credit history, a small deposit, or insufficient income. To overcome these hurdles, a third party (usually a close family member) acts as a guarantor. What

A Key Facts Illustration, also known as a mortgage illustration, is a document that you must be provided with before you make a decision to take out a mortgage. It provides important information about a mortgage in a standard format, so that you can easily compare different mortgage products from different lenders. The key facts

What is Loan-to-Value (LTV)? Loan-to-Value is a ratio that represents the size of your mortgage in relation to the value of the property you’re buying. For example, if you’re buying a property worth £200,000 and you have a deposit of £40,000, you would need a mortgage of £160,000. Your LTV would be 80% LTV is

Learn what manual underwriting is and how it could be your alternative path to securing a mortgage

A mortgage affordability test (or check) is a process used by lenders in the UK to determine how much money they will lend to a prospective homebuyer. This check was introduced following the Mortgage Market Review (MMR) in 2014 by the Financial Conduct Authority (FCA), with the aim of ensuring that borrowers can afford their

The “Mortgage Charter” is a set of standards that mortgage lenders and the Financial Conduct Authority agreed to adopt in the summer of 2022 to residential mortgage borrowers struggling with higher rates. Key provisions in the charter include: In addition to these, the charter introduces special agreements starting from late June: The government has also

The Mortgage Conduct of Business (MCOB) rules are a comprehensive set of guidelines and regulations that mortgage lenders and intermediaries in the UK must follow to ensure the fair treatment of customers. The MCOB rules cover a wide range of activities, from the initial promotion and advertising of mortgage products, through the advice and selling

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What are mortgage overpayments? Mortgage overpayments are additional payments you can make on top of your regular monthly mortgage payment. Overpayments can either be regular or one off. When you make an overpayment, the extra money usually goes towards paying off the mortgage principal (the amount you borrowed) rather than the interest. This can reduce

When you take out a mortgage, you agree to pay back the borrowed amount (the principal) plus interest over a specific number of years – this is your ‘mortgage term’. Common terms are 15, 20, 25, or 30 years, but other durations are also available. How Different Terms Affect Your Monthly Payment: Example: Let’s simplify

Negative equity refers to the situation where the outstanding balance of your mortgage is more than the current market value of the property. It means that if you sold your property, you would not be able to fully pay off the mortgage from the proceeds. Negative equity can occur when property prices fall, meaning that

What is mortgage principal? The term “mortgage principal” refers to the initial amount of money you borrow from a lender to buy a property. In other words, if you were buying a house priced at £200,000 and you had a deposit of £50,000, you would need to borrow £150,000 from the lender. This £150,000 is

Repossession refers to the legal process by which a lender takes ownership of a property due to the borrower’s failure to meet mortgage repayments. It is a way for the lender to recover some, or all, of the money they lent to the borrower. Here’s a step-by-step guide to the process 1. Missed Payments Before

In most parts of the world, when someone takes out a mortgage, they’re required to provide the lender with some form of guarantee that the loan will be repaid. In Scotland, a loan guarantee which uses heritable property as collateral is called a “standard security.” It is also colloquially known as a “charge” against a