Menu
  • Mortgages
  • Protection
  • Wills & Trusts

M – P

M

Mortgage

A loan where the ‘mortgaged’ property acts as a security for the lender until the loan is repaid in full — often after 25 years.

Mortgagee

The organisation that lends you the money to buy a property. Usually a building society or bank.

Mortgage Indemnity Guarantee (MIG)

An insurance policy that covers lenders in the event of a property being repossessed and the mortgagor (see below) not being able to repay any payments outstanding. Ironically, while these insurance policies protect the lender, it is the borrower who has pay for them. MIGs are generally asked when the LTV (loan to value) is over 75%. Fortunately, MIGs are becoming less common.

Mortgage Payment Protection Insurance (MPPI)

Also known as Accident, sickness and unemployment insurance (ASU), MPPI pays a percentage of a person’s mortgage payments if they are unable to work because of illness, accident or enforced redundancy.

Mortgagor

The person who borrows money from a lender (such as a bank or building society) under a mortgage agreement.

N

Negative Equity

The unfortunate situation whereby the money a borrower owes on a mortgage is greater than the value of the property. It really becomes a problem if a person wants to sell their home.

New for old

A form of property insurance that replaces damaged or lost items in your home with new items.

Non-Status Mortgage

With a non-status mortgage, the lender may not require income details from the borrower. This kind of mortgage is often taken out by people who cannot prove their income, have unusual employment circumstances or a poor credit history.

Overpayment

Generally applies to flexible mortgages, which allow overpayments to be made by the borrower without incurring a penalty. Over the term of a mortgage, this can result in significant interest savings.

O

Offer

The sum of money that a buyer offers to a seller for a property.

Offshore Mortgage

These are usually for people with complex mortgage needs, such as high net worth foreign nationals and international sports stars looking to purchase a UK home. Finance is arranged through any number of trusts and companies in the various offshore jurisdictions — from the Cayman Islands to the Isle of Man.

Open Market Value (OMV)

The price of a property when both buyer and seller are willing.

Overseas Mortgage

These are taken out by investors looking to build a portfolio of properties abroad, or by people who simply want to buy a holiday home, possibly secured against the equity in their UK property. Can be either sterling or foreign currency loans.

P

Payment Holiday/Break

Generally applies to flexible mortgages, and is a period during which borrowers make no mortgage payments (usually for six months). In some cases, there is a prerequisite that they have already made ‘overpayments’ on their mortgage.

Permanent Health Insurance (PHI)

Provides a regular tax-free income for policyholders if they are unable to work due to accident or sickness. It is available to both the employed and the self-employed.

Portability

A mortgage that can be transferred between properties when a borrower moves house is said to be ‘portable’.

Principal

The amount of the loan on which lenders calculate interest.

Purchaser

The person who is buying a property.

Bow Terrier

Mortgage Guides

This is Bow, he’s a plucky little Boston Terrier and knows a thing about mortgage applications. His owner, Patrick, is one of our clients and Bow here helps with his paperwork. If there’s anything you need to know about mortgage applications or the paperwork entailed then check out our advice hub – it has everything you need!

View the mortgage guides

Compare the best mortgage products

So you want to research the market yourself? Try our handy mortgage finder - it’s better than traipsing round dozens of bank branches.

Click here to get started

Constantinos Andreou – October 2012

Responsive, Informative, Efficient, Quick, Friendly

Adviser: Justin Whitelock C1008869