Are you looking to buy a new house? You lucky thing. Putting your own stamp on a house and making it a family home is one of the most special things you can do in life.
But, while it’s super-special and you’re most likely already dreaming of the graphic print cushions to go on your brand new sofa, there’s a whole heap of admin you need to go through first before you put in that house offer.
Your head is spinning from the visualisation of living in your dream home, but don’t worry about it spinning with mortgage terms – we’ve compiled this list of the main ones and explained exactly what they mean to help you before you take the plunge.
APR
APR (Annual Percentage Rate) is the yearly cost of your mortgage. Which means, you do not get your money for nothing. What a shame! So, the APR takes into account not only the interest on the loan but also the other charges you must pay for. When deciding your options and comparing providers, this is something to keep an eye on.
Conveyancing
This refers to the legal process of buying and selling property. A solicitor or specialist-licensed conveyancer can help you with this.
Deeds
These are the official documents that prove ownership of a property.
Deposit
This refers to the amount of money you’ll need to pay yourself towards the cost of your new home. For first time buyers, if the value of the property is up to €220,000 you will need a 10 per cent deposit; anything over €220,000 will require a 20 per cent deposit on the portion above €220,000. For home movers and switchers, a minimum deposit of 20 per cent applies. For ‘buy to let’ a minimum deposit of 30 per cent applies. These limits may vary depending on circumstances. Negative equity mortgages and mortgages in arrears are excluded from the limits.
Equity
This is the difference between the amount on your mortgage you have left to pay off and the current value of your home.
Fixed Rate Mortgage
This refers to a mortgage where the interest rate stays the same for a certain period of time. This is a good choice if you don’t like surprises – you know exactly where you stand each month with your mortgage. A fixed rate mortgage can offer peace of mind, as there will be no increases for the particular period set.
Loan to Value (LTV)
LTV means Loan to Value. This is the size of your mortgage as a percentage of the value of your property. For instance, if you have a €240,000 mortgage and your home is worth €300,000, your LTV is 80%.
Standard Variable Rate (SVR)
This is the default mortgage interest rate that will be charged by your lender initially after your mortgage deal ends.
Valuation
This is when a valuation is required by Mortgage lenders in order to prove that your new property is worth the amount of money that you want to borrow. The bank usually sorts this one for you.
Variable Rate Mortgage
The rate of interest can move up or down if the Mortgage lender agrees to changes to their standard variable rate. This offers financial freedom to the loan applicant, and you can take advantage of rate reductions that may apply.
Knowing the terms used when buying property helps make the process much more straightforward. Ulster Bank understands that you want a mortgage you can live with. To give you a mortgage that suits you, they’ve developed a range of new mortgages. Take a look at the mortgage options or have their team call you to arrange an appointment.
