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Mortgage in United Kingdom

GLOSSARY

Failed valuation survey
When the lender turns down your mortgage application after the surveyor’s valuation report indicates the property is not worth the sum sought.

Fair Market Value
The amount paid for a property in a transaction in which neither the buyer nor the seller is being forced into the contract. Typically this value will be set by looking at the sale prices of similar properties in the same area.

Fee
The amount charged by a lender, broker or others for arranging a mortgage or property purchase.

Fee Simple (Scotland only)
A term used in Scotland to refer to property where the owner has the right to decide who inherits the property.

Fees Free
A term typically used in connection with a remortgage where the new lender pays for the cost of a mortgage valuation and legal costs.

Feuhold ( Scotland )
Similar to freehold in England and Wales. Whilst you own both the property land it is build on, a 'Feudal Superior' has an interest in the title of the property and can impose certain restrictions.

Financial Adviser
A person who helps individuals with their financial situation.

Financial Ombudsman Service (FOS)
An organization established by law to help settle individual disputes between consumers and financial firms.

Financial Services Authority (FSA)
The regulator of the UK’s financial services industry. The FSA’s jurisdiction now covers mortgages (except for some buy-to-let mortgages) and general insurance.

First Charge
A legal right under which the holder (of First Charge) has first call on any funds available from the sale of the property in the event that the borrower defaults on repayments. see also Second Charge.

First Mortgage
A mortgage that is the primary lien or first claim against a property.

First Time Buyer (FTB)
A purchaser who has never previously owned a property and is buying a property for the first time. Some lenders offer preferential lending terms to first time buyers. Some lenders also include those individuals who have owned a property previously but have nothing to sell now. If you have not held a mortgage during the last 12 months, you are likely to be considered a First Time buyer. also known as First Time Purchaser (FTP).

Fixed Rate
See also Fixed rate mortgage

Fixed rate mortgage
A mortgage in which the interest rate is fixed for an agreed period of time. The rate payable will not change during that period regardless of changes in the lender's standard variable rate.

Fixtures & fittings
Any items that are legally part of a property and to be included in the sale, e.g. carpets, curtains, curtain rail, wall lights built-in oven, sink, bath etc.

Flat Buyer's Report
See Home Buyer's Report

Flat over Shop
A flat or apartment that is located above a retail premises. Some lenders will not lend on this type of security because it is seen as having limited appeal to prospective purchasers and therefore have a lower value compared to an otherwise similar property. Any property that is located above commercial property usually takes longer to sell than properties which do not have any commercial element. A flat above a take-away restaurant is more difficult to arrange a loan on than a flat above a book shop. Lenders may view such a property as a higher risk category and adjust their mortgage offer accordingly.

Flexi
An abbreviation for Flexible Mortgage.

Flexible Drawdown
A facility written into a mortgage that allows a borrower to access additional funds.

Flexible Mortgage
A mortgage which allows the borrower to make overpayments and underpayments on the mortgage without penalty or take payment holidays.

Flying freehold
A flying freehold is formed when part of a freehold property overhangs a different freehold property or land.

Forbearance
An action a lender may take to delay foreclosure or legal issues with a delinquent borrower.

Foreclosure
The legal process when a borrower defaults on a loan.

Foreign Currency Mortgage
A mortgage that is taken out in a currency other than sterling. Typically used by people who are paid in foreign currency, this type of mortgage carries a higher risk for the lender (due to foreign currency fluctuations) and the rates may be adjusted accordingly. The borrower also carries a higher risk, as currency fluctuations could result a reduction in equity. It sometimes gives you the opportunity to borrow money at a lower rate of interest than is possible in the UK.

Forfeiture
When a delinquent borrower surrenders their property rights.

Freehold(England & Wales only)
Absolute ownership of land or/and property without limitation of time, as opposed to leasehold where the owner has the right to occupy the land or property for a given period of years only. See also Feuhold (Scotland)

FSA - Financial Services Authority.
The body responsible for regulating the mortgage market, among others.

Full Status
The stage in a mortgage application at which complete checks are made on the prospective borrower's credit history, income and other financial information.

Full Structural Survey
Сomprehensive survey carried out if you are thinking of buying an older property, as it will tell you if there is any problem or faults. Also known as a " Structural Survey and Building Survey."

Further Advance
A situation whereby the lender makes available another loan and under which both loans are included within first charge on the property. This is normally used to consolidate debt or pay for improvements to the property.