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When starting a mortgage application, it’s helpful to know what all the key terms mean. Common terms include:
What is a mortgage deed?
A mortgage deed is a legally binding document allowing the lender to hold a secured interest in the property, until you pay the mortgage off.
You sign a mortgage deed when you become a new homeowner, just before the exchange of contracts.
What is a mortgage underwriter?
A mortgage underwriter works for the lender to assess mortgage applications. They follow a process to review the application and financial situation of the applicant. This includes making sure they meet all the lender’s financial and personal requirements.
They will use credit reference agencies, bank statements and your financial history to inform their decision. If the underwriter thinks there’s too much of a risk that the borrower won’t meet repayments, they may decline your application.
What is a mortgage survey?
Most lenders require a mortgage valuation survey before they accept an application. A surveyor will carry out a valuation to check the amount you’re applying for matches up with what the property is worth.
It is also known as a mortgage valuation or valuation survey. Some firms use automated valuations, so check you have the right level of survey booked beforehand.
This differs from a house survey, which is a more in-depth assessment of the property. Lenders don’t normally require these. They will cover the building and structural risks and a condition report.
What is a mortgage offer?
When you have gone through the full application process – and the lender has completed their checks – you may receive a mortgage offer. This confirms the lender will provide you with a mortgage for the property at the amount requested.
It differs from a mortgage Agreement in Principle, which you might receive earlier.
A mortgage Agreement in Principle is not a guarantee, just a guide to what you may be able to borrow before making your full application. Find out more with our mortgage Agreement in Principle guide.
What’s a confirmation of employment letter?
On top of proof of income, lenders will often ask for a confirmation of employment letter to help prove or verify other financial information and documents supplied. This letter contains details of your employment, including:
We have a range of mortgage calculators to help you:
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