Glossary

Adverse Credit - an entry on a credit file that decreases the overall credit score. Examples include a missed loan payment, a declined application for credit, or a County Court Judgment (CCJ).

Bad Credit - see Adverse Credit.

Encumbered - a property with at least one mortgage or loan secured against it.

First Charge - the primary mortgage or loan secured against a property which takes precedence over all other finance secured against it.

Lender - an entity which lends money that is to be repaid by the borrower.

Mortgage - A financial instrument requiring a borrower (mortgagor) to pay a sum of money to a lender (mortgagee) that has been loaned to the borrower in order to purchase a property. The property is used as collateral for the loan.

Negative Equity - Occurs when the market value of a property has fallen below the total of the balance of the first mortgage and the balance of any other loans secured on it. If the property is sold and the proceeds are used to repay the mortgage and loans the borrower will be left with some debt still outstanding.

Outstanding Balance - the remaining balance owing on a mortgage.

Redemption - the payment in full of a mortgage’s balance.

Remortgage - see Remortgaging.

Remortgaging - the process of redeeming a mortgage with the funds from another mortgage product.

Repossession - the legal process by which a creditor takes possession of a debtors properly in lieu of the debt being repaid.

Second Charge - a loan secured against a property in addition to a first charge.

Term - the time period over which a mortgage is active.

Unencumbered - a property with no mortgages or loans secured against it.

Valuation - the process of having a value assigned to a property by a qualified surveyor.