To help yacht crew understand some of the more common terms used when buying a property and applying for a mortgage, the CrewFO mortgage experts have compiled the following list!

Our mortgage experts will always discuss your personal circumstances and specific requirements with you in more detail. They will try, using plain language rather than industry jargon, but there are certain terms and phrases connected to mortgages that are fairly universal.

Here’s The Jargon!

As if buying your first property is not daunting enough! Cutting through some of the jargon used when applying for your first mortgage can take some doing.

  • Residential Mortgage – The type of mortgage required when buying a property where the purpose will be to live in the property yourself when not at sea
  • Buy To Let Mortgage – This is the type of mortgage required on a property where the intention is to rent the property to somebody else rather than live in it yourself
  • Buy To Let Rental Assessment – This is the assessment calculation the mortgage lenders perform to test whether the rental income from a property is sufficient to generate the mortgage amount required
  • Foreign Currency Mortgage – This is a special type of mortgage. It’s required when you are paid in a currency other than pounds sterling. Unfortunately, this type of mortgage is not provided by many mortgage lenders, which can make securing a mortgage as a seafarer more difficult
  • Capital and Interest Payment – Your monthly repayment covers the interest and reduces the total balance outstanding
  • Interest Only Payment – Your monthly repayment only covers the interest so the balances does not reduce
  • Fixed Rate mortgage – A mortgage where the interest rate stays the same for a specific period (e.g. two or five years) even if the base rate or lender variable rate changes in the meantime
  • AIP : Agreement In Principle – Also known as a mortgage in principle or decision in principle. It provides an indication of how much you may be able to borrow and that a lender is prepared to offer you a mortgage
  • Conveyancing – Is the legal process of buying and selling property. This is done by a solicitor or licensed conveyancer
  • Mortgage Offer – This is your guarantee of the mortgage. Once the mortgage is approved you will get a formal offer setting out the terms and conditions from the lender
  • ERC : Early Repayment Charge – Some mortgages, in particular fixed rate mortgage, charge a fee. That is, if you pay the full balance early. This can vary and will be detailed in the mortgage offer or terms and conditions
  • Stamp Duty – This is a tax you may have to pay when you buy a property. The rates of stamp duty vary depending on the purchase price and your status (I.e. First Time Buyer). There may also be additional stamp duty charges if you own more than one property at a time

Need More Assistance?

Many yacht crew engage the services of the mortgage broker who’s worked with CrewFO and its members for many years. They fully understand the challenges faced by yacht crew when it comes to buying property and raising a mortgage. Their success rate is very high, and their advice and guidance can help when thinking about buying property.

Get in touch with Crew FO for expert guidance. Click here for more information.

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