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Mortgage in United Kingdom
GLOSSARY
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Part and Part Mortgage
A combination of a Repayment (Capital & Interest) and Interest Only mortgage.
Part-possession
The term used, when a property is being sold, where a tenant has legal right of occupation.
Payment break
An option on flexible mortgages that allows you to stop making mortgage payments for up to 6 months.
Payment Default
If you default on your credit repayments, the lender is entitled to reposes your house to recover the debt.
Payment Holiday
Under a flexible mortgage, borrowers are permitted to take a break from their mortgage repayments for a specified period.
Payment Method
The method by which the mortgage capital is eventually repaid. Typically this will be either an endowment, an ISA, or some other investment product.
Payment Protection Insurance
A form of ASU which is linked specifically to a loan. See also Accident, Sickness and Unemployment Insurance(ASU).
Payment Schedule
A schedule of monthly payments under a loan.
Payment Shock
If you have taken out a mortgage on a low rate, the low rate end and the payment jump up the standard variable rate.
Payslip/P60
Documentary record of salary paid by an employer to an employee, including income tax, national insurance and other deductions. Payslips coincide with salary pay dates and are usually issued monthly, although some employers pay salary weekly or four-weekly. A P60 is provided following the tax year end (05 April each year) providing a summary of total salary and tax paid for the year.
Penalties
Costs that may be incurred if the borrower repays the loan too early or switches between lenders.
Pension Mortgage
An Interest Only mortgage where the borrower plans to use some or all of the tax fee cash sum from a pension policy to repay the mortgage at the end of the term. Only suitable for those anticipating very large pensions.
PEP (Personal Equity Plan)
A tax-free savings plan that has since been replaced with the ISA.
Peppercorn ground rent
A nominal periodic ground rent of a trivial amount usually paid annually.
Permanent Health Insurance (PHI)
An insurance policy that pays a monthly income if the policyholder becomes ill and cannot work.
Personal Pension Plan
A pension plan that allows individuals not covered by a company pension plan to save for a pension.
Pied a terre
A property kept for temporary secondary or occasional occupation.
Portable
A mortgage that can be transferred to another property when the policyholder moves home.
Preliminary enquiries
A set of questions raised by the purchaser's solicitor and sent to the vendor via his solicitor, which must be answered prior to exchange of contracts. They ask for clarification of specific points about the property which is being sold and the present vendor's ownership of it.
Premium
The monthly amount payable for an insurance policy to keep your cover in force.
Premium lease
Lump sum paid up front as rental for a property.
Previous Lender's Reference
A document from a previous lender that confirms a person's previous repayment record. All lenders require this reference although some lenders will still lend at a higher rate of interest if you have a poor payment profile.
Price change
This is a property that has had its price changed.
Prime Rate
The best interest rate possible to the lender's most valuable customers.
Principal
The sum of the loan still outstanding on which interest is calculated.
Principal and Interest Mortgage
See "Repayment Mortgage."
Private Treaty (For sale by)
The sale of property by private treaty is the method employed by most estate agents, preparing descriptive details of the property and quoting a definitive asking price. Details are circulated: potential buyers may view the property and either agree to buy at the asking price or submit an offer to purchase. Agreement to buy at this stage (for England and Wales) is subject to formal contracts being prepared between the vendor and the purchaser and those contracts being signed and exchanged between the two parties.
Probate
The official process of proving a will is valid. In many cases part of the estate will involve a property, which might need to be valued for Inheritance Tax purposes. A probate valuation is generally a negotiated value with the district valuer representing the Inland Revenue. A sale cannot proceed to exchange of contracts until probate has been granted.
Procurement Fee
The total amount paid by the mortgage lender to a mortgage adviser/ intermediary, whether directly or indirectly, in connection with providing applications from customers to enter into regulated mortgage contracts with the mortgage lender.
Product
A mortgage deal offered by a lender.
Public liability insurance
Insurance which covers injury or death to anyone on or around your property.
Purchase
The acquisition of a property.
Purchaser
A person who is buying a property.
Quotation
See key facts illustration (KFI), customer specific illustration (CSI) and key features document (KFD).
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