Mortgage Deals Guide I
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IFA
This stands for Independent Financial Adviser. These are people who are trained and authorised to give advice on financial products.
IHT
This stands for Inheritance Tax. A charge to IHT occurs when someone dies or when assets are transferred to a company or discretionary trust.
Income Multiple
This is a calculation used by mortgage lenders to determine how much they will lend you. This is typically three times your income, or two and a half times joint income. However, many lenders now base this on your ability to make repayments, taking into account your income and outgoings.
Income Tax
Income tax is payable on any income, whether it comes from working or an investment.
Index-linked
Changes in line with inflation.
Interest only mortgage
With an interest-only mortgage your monthly mortgage payments only pay the interest element of the loan and don't pay off any of the capital. To repay the capital most borrowers take out some kind of savings plan to ensure that at some time in the future they will have enough money to pay off their mortgage, such as an ISA pension or an endowment.
ISA
This stands for Individual Savings Account. The Individual Savings Account was introduced on 6th April 1999. Individuals who are both resident and ordinarily resident in the UK for tax purposes and are aged 18 and over (16 for cash ISAs) are eligible to subscribe to an account. Returns from ISA savings are free of income tax and capital gains tax.
Land Registration
The register of who owns plots of land which also details any legal charges on it.
Leasehold
Leasehold means that someone else owns the land the building is on and so you are only buying the right to live in the property for a certain length of time.
Level Term Assurance
Term Assurance is a life insurance policy which covers the life of a person in monetary terms in return for a payment, usually monthly, and known as a premium. Term assurance is the cheapest and simplest form of life cover, providing life assurance for a fixed term only. The sum assured is payable only if the life assured dies within that term. There is no investment value to the policy at any time. In the case of Level Term Assurance the sum assured does not change during the term of the policy.
LIBOR
LIBOR stands for the London Interbank Offered Rate and is the rate of interest at which banks borrow funds from other banks, in marketable size, in the London interbank market.
LTV
This stands for Loan to Value which is ratio between size of loan and value of property. So, for example if you require a £90,000 mortgage on a property valued at £100,000 the loan-to-value you require is 90%.
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Your home may be repossessed if you do not keep up repayments on your mortgage or other debt secured against it. You may have to pay an early repayment charge to your existing lender if you remortgage. The overall cost for comparison is 8.9% APR the actual cost will depend upon your circumstances.
We do not charge for our service. Some buy-to-let and commercial mortgages are not regulated by the financial services authority.
Mortgage Fix Ltd is a no longer a whole-of-market UK Independent Mortgage Broker. Full details of other advisers are available at the FSA web site www.fsa.gov.uk/register.
