Jargon Buster

Arrangement – An agreement between you and your lender to help you pay off your arrears.

Arrears – Any amount overdue and owed to the lender including missed payments.

Bank Giro Payment – A payment slip a customer uses to instruct a bank to credit an amount of money to another account. It is not a payment by itself since it has no value. Please note that it is vitally important that you include your mortgage account number.

Bank of England Base Rate – The base rate set by the Bank of England’s Monetary Policy Committee.

BTL – Buy-to-Let - a mortgage that is used to buy a residential property that is rented out to a third party (non-family member).

Capital Reduction – part capital repayment of a proportion of the amount borrowed, over and above your regular monthly payment. (May be subject to Early Redemption Charges).

CCJ – County Court Judgement – a judgement made against a person or company for debt. A CCJ may affect your credit rating and will appear on your credit file for up to 6 years.

CMI – Contractual monthly instalment – agreed monthly payment.

Courtpack (England and Wales only) – The Court will send you a pack containing the following: details of when the hearing will take place and at which County Court; a defence form which will allow you to provide your financial information and details of your circumstances. This should be completed and returned to the County Court.

Discount Rate – an interest rate on a mortgage or loan that is set at a reduced rate for a fixed period of time.

Direct Debit – an instruction given by you to your bank to make regular payments to a third party.

DWP Payments – Department for Work and Pensions (DWP) – These payments can be arranged when a customer requests help with their mortgage payments from the DWP, formerly referred to as the Department of Social Security (DSS).

After the relevant forms are completed by the customer and Acenden, the DWP can assess the amount they can contribute. Payments that are received from the DWP help towards mortgage or loan interest payments and are paid directly to Acenden.

For further information, please contact your local DWP office

ERC – early repayment charges – a charge made if you repay some or all of your mortgage early. Please refer to your original mortgage letter.

Eviction Date – This is an appointment with the bailiff, also known as a Balliff’s appointment. The Court bailiff and a locksmith will attend your property on the date and time scheduled and you will be required to leave the property.

Field Agents – debt advisors (but not financial advisors) who will visit you to gain an understanding of your current financial position and discuss clearance of arrears. The lender will in certain circumstances arrange a visit, or the customer can request it if their account is in arrears.

Freeholder – the owner of a freehold, i.e. a person who owns land or property and not under a lease.

Ground Rent – a regular rent payment due on land held under a lease which is payable by the leaseholder to the freeholder. Please also see Service Charges.

Interest only – a mortgage product where only the monthly interest is paid, but the capital amount borrowed is not. As the capital will still be outstanding at the end of the mortgage term, interest only mortgages rely on an alternative savings plan to pay off the capital at the end of the term. Under an interest only mortgage your mortgage payments do not include the costs of a savings plan or any other investment you may have arranged to build up a lump sum to repay the amount owed.

Land Registry – a government body which maintains records of land and property ownership.

Leaseholder – the owner of a lease; i.e. a person who owns land or property under a lease for a fixed number of years (the term of the lease).

Lender – the firm that lent you the money to purchase or remortgage your home and, in return, took security by way of a legal charge over the property or, where your mortgage lender has sold the legal or beneficial interest in your loan, the current owner of that interest.

Let-to-Buy – where the applicant is proposing to rent out their current residential property in order to fund a new purchase.

LIBOR - London Interbank Offered Rate – the rate charged by one bank to another for lending money in London. LIBOR is expected to cease to be available for use by mortgage lenders after December 2021. When this occurs we will replace LIBOR with an appropriate alternative external rate. We will tell you which alternative rate we will use at least 1 month before we make the change. For further information on LIBOR please visit our interest rates page.

LMC – London Mortgage Company.

LPL – London Personal Loans.

LTV – Loan to Value - the amount of a loan as a percentage of the property’s value.

Possession Order – Where a Judge grants an order to the lender for possession of the property on a certain date.

Preferred – Preferred Mortgages Limited.

Redeem – to pay off the outstanding amount of a loan, plus any fees and charges that may apply, such as early repayment charges.

Remortgage – replacing one mortgage with another.

Repayment (Capital & Interest) – a mortgage which pays off both the capital and interest in monthly installments within a specified number of years.

Right-to-Buy – a purchase transaction where the applicant is buying the property from a Registered Social Landlord, usually at a discounted price.

Sale of land – a transaction that can be undertaken if a customer wants to sell part of their land.

Service Charges – charges levied by landlords to recover the costs incurred in providing services to a leasehold property, such as general maintenance, repairs, and buildings insurance.

SPML – Southern Pacific Mortgage Limited.

SPPL – Southern Pacific Personal Loans Limited.

Standing Order – this is an instruction given by a bank account holder to their bank to pay a set amount at regular intervals. This can be monthly to another account to pay a mortgage.

Suspended possession order – this means that an order for possession of your property is granted by the Judge. However, it is suspended and your lender cannot enforce the order, and thereby take possession, as long as you maintain the terms and any payment arrangement required by this order.

Transfer of Equity – equity is the value in your property over and above any amounts owed on your property. A transfer of equity is when you sell (or transfer) your ownership or interest in the equity of that property to another person.

Valuation – this is an inspection of a property on which a mortgage is to be secured. It is carried out on behalf of the lender to ascertain the value of the property and advise the lender whether it is suitable security for the loan.

Valuer – a qualified chartered surveyor who inspects a property and provides a Valuation.

Vendor – the party that is selling the property.