Mortgage Terms Explained
Agreement in Principle:
An Agreement in Principle (AIP) gives you an understanding of how much you may be able to borrow towards the purchase or remortgage of a property. It’s a document that you can use with an estate agent, or those selling a property, to show that you may be in a financial position to purchase it.
Annuity Mortgage:
This is the standard mortgage type where part of the initial amount you borrow is paid back every month along with interest. Once all the capital and interest are paid back the property is mortgage-free.
Annual Percentage Rate (APRC):
The APRC is a calculation of the overall cost of a loan expressed as an annual rate. It takes into account all the costs involved over the term of the loan, such as interest rate, valuation fee etc
Arrears:
If you fall behind in your mortgage repayments it means your mortgage is in arrears. There may be additional charges associated with a mortgage in arrears.
Building Energy Rating (BER):
A BER is similar to the energy label for household appliances and tells you how energy-efficient your new home will be. The label has a scale of A to G, with A rated homes being the most energy efficient. A BER certificate is compulsory on homes being sold or rented.
Building Insurance:
Protects the structure of your home from events such as fire, vandalism, storm or flood. Its an essential part of your mortgage agreement to ensure that you have a minimum level of buildings insurance. Once you’ve exchanged contracts, you’re responsible for the property’s building insurance.
Buy to Let Mortgage:
This is a mortgage to purchase a property for investment purposes, usually where you want to let or rent it to a tenant.
Contract/Contract for Sale:
A contract is a legal agreement between two or more people.
Conveyancing:
The legal process of buying and selling property. This can be done by a solicitor or specialist-licensed conveyancer.
Drawdown:
Once all of the conditions of the mortgage have been fulfilled to the satisfaction of the Bank and the contracts have been exchanged, the Bank will send the loan funds to your solicitor so that the property can be completed.
Equity:
This is the difference between the value of your property and what you owe under your mortgage loan.
Equity Release:
If you have equity in your home, i.e. the value of your home is greater than what you owe under your mortgage loan, then you may be able to release some of this equity by taking out an Equity Release, that is, an additional mortgage loan secured on the property.
Help to Buy:
The Help to Buy scheme is an incentive for first time property purchasers to help with the deposit required to purchase or self-build a new house or apartment. You must purchase or self-build the property to live in as your home
Interest Rate:
This is the cost to you of borrowing money. The rate is usually expressed as a percentage rate per annum (i.e., per year). Interest rates can be either fixed or variable.
Letter of Offer:
Once your application is approved, a Letter of Offer detailing your mortgage offer from the Bank is issued to you and to your solicitor. It will include the Interest Rate, how you are to repay your loan and the duration of the mortgage loan. Full Terms and Conditions are included. It must be signed and returned to the Bank within 30 days of the date of the Offer Letter to remain valid.
Loan to Value Ratio (LTV):
it is the amount that you are borrowing compared to the value of the property you are buying. For example, if you buy a property valued at €300,000 and borrow €240,000, your LTV is 80%.
Mortgage:
A Deed you sign to create security over a house of land and sometimes over other types of property. For example, security in the form of a mortgage is usually given to a bank or building society to enable it to lend to a borrower to finance the purchase of a property.
Negative Equity:
When the value of your home falls below the amount of your mortgage.
Repayment:
The amount you agree to pay each month on your mortgage loan.
Stamp Duty:
A government tax on the purchase of a property.
Term:
The term of the mortgage loan is the length of time over which you agree to pay off the loan. The longer the term the less you pay each month, but a longer term also means paying more interest over the duration of the loan.
Title Deeds/Title Documents:
The legal documents which provide proof of ownership of a property.
Valuation:
A report which describes a property and estimates its market value. It is prepared by a professional valuer and the valuer must be acceptable to the Bank. Remember, the Valuation Report is not a detailed structural survey or planning survey.
Why choose us ?
We will find out how much you can afford, collate the necessary information with you and submit your application to the Mortgage providers we feel best suit your requirements. We will also advise you on all the different types of mortgages and the choice of mortgage products available (fixed rates, variable rates, split mortgages etc) in the Irish mortgage market.
- Access to Mortgage Market
- Best Interest Rates
- All Mortgage Options Available
- Quality Customer Care