About Loans
Skoot Ltd - Glossary of common terms
advance
Your advance is the amount of money you want to borrow. This is known as your loan advance.
agreement in principle (AIP)
This is an agreement from your loan provider to lend a certain amount of money. It’s dependent on the value of the following; your property, proof of your identity, income, existing credit commitments and credit repayment history.
This is an indicative decision only and is dependent on your ability to meet Skoot Money’s lending policy. Full details will be provided in your Loan Application Pack and your Customer Account Manager will make sure everything is made clear to you.
APR (Annual Percentage Rate)
This is the total cost of a loan, including the interest charges and product fees, shown as a percentage rate. The calculation assumes that you maintain the repayments for the full term. The APR is an industry standard calculation and enables direct comparison of loans from all lenders.
arrangement fee
Some loan providers charge an arrangement fee to cover costs such as, property valuations, surveys, legal costs, credit searches and administration. This can normally be paid upfront or added to your loan.
arrears
The term 'in arrears' is used to describe a loan or mortgage amount owed by the borrower if they have failed to keep up the monthly repayments.
balance outstanding
This is the amount of a loan owed at a particular time.
Bank of England base rate
The Bank of England sets an interest rate each month known as the 'Base Rate'. Financial institutions, such as banks, building societies and finance companies, use the Base Rate to set the interest rates they pay on deposits or charge on debts.
bridging loan / bridging finance
This is a temporary loan to help you buy a new property before you sell your existing one. Skoot Money does not recommend that you use a Homeowner Loan for short-term bridging finance.
charge
This means an interest in the ownership of a property. It’s usually a mortgage or a second loan, which is secured against the property.
completion (date of entry in Scotland)
The end date of a property purchase. Once the seller moves out, the buyer then moves in and the ownership is transferred.
consent to mortgage
This document must be signed by everyone who lives at the property if they’re 17 years or older. The reason for a signature(s) is so you acknowledge the existence of a Homeowner Loan and the security. The signature(s) also confirm you’re aware that if the loan defaults, the lender has the right to repossess the property.
conveyancer
A person (other than a solicitor) who may conduct the conveyancing.
conveyancing
This is the process of transferring property from one party to another, usually managed by a solicitor or a licensed conveyancer (see above).
county court judgement (CCJ)
This is a decision reached in the County Court, which may relate to the non-payment of debts. If you pay off the debt, the CCJ is satisfied and a note is put on your records to say this.
covenant
This is a condition that the new buyer must comply with, and is contained within the Title Deeds or lease. It usually applies to all future owners of the property. A ‘restrictive covenant’ prohibits the owner from doing something to the property.
credit reference agencies
These are organisations licensed under the Consumer Credit Act 1974 to hold information about people’s credit history. Most lenders refer to these agencies to help make a decision about your application.
credit scoring
The system many lenders use to help them decide whether they can lend money to you. They ask a series of questions about you and your finances and score your answers. Your score then results in you being accepted or declined for a loan.
credit search
A check the lender makes with a specialist company to find out whether you have any County Court Judgements, or a record of not paying loans, credit-card bills etc.
date of entry
This is the date a specific transaction happens with your account. For example, the day you choose for your direct debit or completion on a property.
debt consolidation
This is the process of combining your outstanding debts (e.g. credit cards, car loan, overdraft etc), into one loan.
deed of postponement
This is the legal process that gives your mortgage lender a prior claim on your property as security.
deeds
The legal documents that prove ownership of a property or piece of land.
direct debit
This is an instruction from a customer to their bank or building society to make regular payments directly from their account.
disbursements
These are all the various costs for carrying out the legal work in relation to buying or re-mortgaging your home.
discharge
The term for when you pay off a mortgage.
early repayment or settlement charge
If your loan or mortgage is repaid early, a charge is sometimes payable. The amount will depend on the size of the outstanding loan and its terms.
equity
If your house is worth more than the mortgage on it, the difference is known as the 'equity'. For example, if your outstanding mortgage is £100,000 and your home is worth £150,000, you have equity of £50,000.
equity release
Equity release allows home owners the opportunity to turn some of the value of their homes into cash (see ‘equity’ above). Using the equity, you could take a lump sum, regular extra income, or sometimes both.
Financial Services Authority (FSA)
This is the regulatory authority for the UK financial services industry. The FSA has taken over the regulation of mortgages and all lenders and mortgage intermediaries must be directly authorised and regulated by the FSA (or an appointed representative).
freehold
The legal title that gives you absolute ownership of the land your property is on.
further advance or further borrowing
This is when we replace your existing loan with a new larger loan. It’s taken after the existing loan has started and is secured against your property.
gazumping
This happens when a seller pulls out of a sale after accepting a higher offer.
gazundering
The tactic of a buyer offering less than the agreed price just before exchange of contracts.
homeowner
Skoot Money considers a homeowner to be someone who owns their home with a mortgage and lives at the property. This means they are an owner occupier.
homeowner loan
A Homeowner Loan is also known as a secured loan. To find out more, please visit our Loans section.
IFA
This is an Independent Financial Advisor.
joint loan agreement
A loan where there is more than one named individual responsible for the contract. To find out more about joint applications, please see our FAQ's.
land certificate
This is a Land Registry (see below) certificate that proves ownership of a property.
land registry
A government organisation that holds the records of all registered properties in England and Wales.
land registry fee
This is a fee paid to the Land Registry (see above) to register your details if you’ve bought a property or changed mortgage lenders.
loan to value (LTV)
This is the amount of a mortgage expressed as a percentage of the property value. For example, if your mortgage amount is £80,000 and your property is valued at £100,000, your loan to value (or LTV) is 80%. With Skoot Money, you can borrow up to the value of your property less the amount outstanding on your current mortgage.
negative equity
This happens when the value of the outstanding mortgage is more than the market value of the property e.g. you have a mortgage of £120,000 on a property worth £100,000.
ombudsman
This is an independent professional body, which helps to settle individual disputes between consumers and firms such as estate agents, solicitors and insurance companies.
planning permission
The permission granted by the local planning authority (usually the local council) for any new building or the change of use of a building if it meets the public's interest.
premium
The amount you pay to an insurer for an insurance policy.
remortgage
This is the process of moving your mortgage without moving home. You simply take a new mortgage to pay off your old mortgage.
secured loan
When you take a secured loan, it’s guaranteed by setting your property against it as security (this includes assets such as Title Deeds to your house, life policies etc). So if you don't repay your mortgage or other secured loans, the lender has the right to sell these assets.
settlement charge
If your loan or mortgage is repaid early, a charge is sometimes payable. The amount will depend on the size of the outstanding loan and its terms.
solicitor
A legal expert who handles all documentation for the sale and purchase of a property.
stamp duty
A tax you must pay on a property when you buy it. The duty is always paid at the point of completion.
subject to contract
This is a phrase to indicate that an agreement is not yet legally binding until the contract has been exchanged.
tenants
This is anyone living in a property on a non-ownership basis.
term
This is the time-scale over which the loan is to be repaid and will be part of the loan offer.
title
This is the record of ownership of a property and is contained in the title deeds.
total amount payable
This is the total cost of repaying a loan or mortgage.
transfer deeds
The Land Registry document that transfers legal ownership from seller to buyer.
transfer of equity
This happens when you add or remove a party to/from a mortgage or other secured loan.
under offer
A term that applies to a property where the seller has provisionally accepted the buyer's offer.
unsecured loan
This is a loan that doesn’t require any security (such as a charge over a house). Because the risk to the lender is higher for unsecured loans than for secured loans, the interest rate charged is often higher. Unsecured loans are also sometimes referred to as personal loans.
valuation
In most instances, this is the figure that a surveyor thinks a property is worth. This is done so that the property is worth the amount requested for a mortgage.
valuation fee
This is the charge for the valuation of a property.
variable interest rate
This is the rate of interest payment that fluctuates over time with general interest rates.
vendor
The seller of a property or piece of land.
If you have a question not mentioned here - please contact us