Secured Loans & Mortgages

 

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Bailiff
An official representative of the courts, who may call round to repossess your possessions or house if you cannot keep up on your mortgage repayments and fail to reach an agreement with your lender to ammend your repayments.

 

Balance breakdown
This is a fee that can be charged by your lender for a month-by-month breakdown of your account balance, over and above the information contained in your Annual Statement. Costs £15 - £30

 

Balance outstanding
The amount of loan owed at one time.

 

Balloon mortgage
A short-term mortgage in which small periodic payments are made until the completion of the term, at which time the balance is due as a single lump-sum payment.

 

Balloon payment
The final lump sum payment due at the end of a balloon mortgage.

 

Bank of England base rate
The base rate is a rate set by the banks to price loans, and also reflects the state of the market. It is most commonly encountered when looking into loans including mortgages, and many building societies/banks offer base rate tracking mortgages. The figure represents the minimum rate of interest possible on a loan.

 

Bankruptcy
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).

 

Bankruptcy charge
This is an investigation carried out by the Land Charges Registry to check if a purchaser is or has ever been bankrupt. Most mortgage lenders will insist on this search being carried out and it usually carries a small charge.

 

Basic valuation
All lenders require a basic valuation. They need to know that they are not lending you more than the property is worth, and that if you sell it off you will get at least as much money back as you paid for it. Although this is often referred to as a survey, it is really too superficial to merit this title.

 

Biweekly mortgage
A mortgage that requires payments every two weeks and helps repay the loan over a shorter term.

 

Blanket mortgage
A mortgage that covers more than one property owned by the same borrower.

 

Boundaries
These are the areas around a property which identify the start and end of the land and ownership.

 

Breach of contract
The failure to perform provisions of a contract without a legal excuse.

 

Breach of covenant
The failure to obey a legal agreement. Breach of warranty A seller's inability to pass clear title to a buyer.

 

Bridging loan
This is a short term loan. It is often used by purchasers of a property who need funds for a limited period of time. e.g. until they sell their existing home. Major banks and building societies can offer bridging finance, but consider all the risks before you opt for it. For example, if you effectively take on a second home loan and you fail to sell your first property, can you afford to shoulder the burden ? If you do opt for bridging finance, are the interest rate terms reasonable and what is the annual percentage rate (APR) being asked ?

 

Broker
Brokers and other intermediaries attempt to arrange suitable financial products or policies for you. They can be fully independent, part of a network that uses a panel of providers, or tied to certain institutions in which case they can only sell their products.

 

Brokerage
The act of bringing together two or more parties in exchange for a fee or commission.

 

BSA - Building Societies Association
This is the trade organisation of the building societies.

 

Building society
Building societies are mutually owned organisations, which exist not for profit but for the benefit of the members. The idea of this is that the society is able to offer cheaper products to its members, though this is not always the case.

 

Building survey
This is the most comprehensive – and the most costly – type of survey. It is suitable for any building, but is especially recommended for older buildings (75 years and upwards); those constructed out of unconventional materials such as timber or thatch; and properties which have had lots of alterations or extensions, or which you intend to alter or renovate.

 

Buildings and contents insurance
Buildings and contents insurance can often be purchased together protecting both the building structure and your belongings and possessions inside.

 

Buildings insurance
Buildings insurance is designed to give you financial protection for the basic structure of your home, such as the walls, roof and foundations. This usually includes any external parts of the property such as your shed, garage, conservatory or greenhouse.

 

Buy to let mortgage
A mortgage designed for people who buy a property with the intention of letting it out. Largely similar to other mortgages, but the maximum loan-to-value (LTV) is usually lower, meaning that a larger deposit is required. Other restrictions may also apply, such as minimum letting terms and rental income. Lenders will normally incorporate a proportion of the rental income when calculating how much money they are willing to lend you.

 

Buy-down mortgage
A mortgage-financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage, but possibly its entire life. The builder or seller or the property usually provides payments to the mortgage-lending institution, which, in turn, lowers the buyer's monthly interest rate and therefore monthly payment. The home seller, however, increases the purchase price of the home to compensate for the costs of the buydown agreement.

 

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