Glossary Of Terms

APR or Average Product Rate is an expression of the real interest rate over the life of the mortgage, and is affected by frequency of charging interest (less often in the year the better), if you opt for a Fixed Rate at the outset (it assumes you revert to Variable at term end) and any other costs involved in the mortgage (not life and fire insurance costs).

Annuity Mortgage is the normal mortgage type. Your repayment comprises Capital and Interest that alter proportionately over the life of the mortgage. By the end of the term your repayment has been calculated to exactly clear the mortgage on time.

AIP or Approval in Principle. Good news to get, but its saying in layman’s terms “all things being equal we should be in a position to make the funds available to you”. Seek qualifying conditions to move to Letter of Offer to be sure of your position.

Arrears describes the amounts owing by virtue of a repayment or repayments being missed, and that arrears amount may be charged additional interest.

BER or Building Energy Rating is a measure of the energy efficiency of a property, and is required to be disclosed by a seller or developer of a property.

Builders Contract is building a new home, or renovating an existing one, using a Qualifying Registered Builder who completes the property for a Contract Price.

Building Under Construction Policy: a requirement of a Self Build Mortgage that for at least 18 months the Applicants have cover in place to protect the property itself, and the site against Public Liability claims. Can be costly, build into projections.

Burden is something affecting title to a property. Most often it can affect the suitability of that property for a mortgage ie Right of Residence, Prior Charge, Judgement Mortgage etc.

Buy to Let in the context of a mortgage is an investment loan designed to be repaid from Rental Income supported by further monies as required from the Borrower.

Capital describes an amount borrowed.

Case by Case basis. Not all mortgage applicants fit “the boxes”, and Mortgage Firms use this expression to signify they may be open to an exception if there are perceived strengths in other aspects of a mortgage application. At Pat Fleming Mortgages, our relationship with Mortgage Firms is that we can gauge that openness prior to making an actual application directly with them.

Collateral aka Security, the surety a Mortgage Firm obtain for providing Mortgage Finance, a property, on which they place a charge for the duration of the term of the Mortgage.

Contract is the Legal Agreement signed in advance of the actual exchange of monies for a property, and is a formal arrangement difficult to back out from.

Conveyance describes the Legal Process of the actual exchange of a property, and is the final legal move to you owning your property.

Costings in relation to construction, verified list of acual cost of renovation or construction.

Credit History most often assessed by and perusal of Bank Statements, previous Mortgage Statements etc. How have financial affairs being managed in the past.

DD or Direct Debit, the sole preferred method of repayment of your Mortgage, direct payment from your bank account. You can request a date for the payment that suits you.

Declaration Form. Will appear in your Mortgage Application. Can cover a multitude of uses. It is your sign off that everything you have disclosed in your application is true, you have disclosed all information, you allow the Mortgage Firm make enquiries about you and authorise the Firm hold
your Data on file.

Deed the actual Legal Document that signifies exchange of a property.

Default, describes a borrower not meeting the terms of a mortgage, missing repayment or failing to negotiate with the Mortgage Firm on an ongoing basis.

Deposit an amount of money paid over to secure a property. Generally the first amount, 5% or a fixed even amount, is paid to an Auctioneer, and is non-binding. Shortly afterwards, however, you will be obliged to sign a Contract, a larger deposit is paid, and that is generally unrefundable. The research on the property needs to be done at this point as the stakes are high.

Dilosk aka ICS Mortgages, a specialist Residential Investment Property Mortgage Company, can facilitate Pension Fund borrowings allowing property be bought to let as part of a Pension. Principally residential property investors bank, but now also lender for main residences with range of competitive rates and terms particularly for Public Sector Employees. Available through Pat Fleming Mortgages as agents.

Direct Labour is building a new home, or renovating an existing one, utilising various tradesmen who are engaged for their expertise with overall supervision by an Architect or Engineer.

Discounted Variable Rate is a reduction in a banks variable rate offered as an incentive for a definitive period of time. See APR, best indicator of ongoing value of offer.

Drawdown is the point where the Mortgage Provider is happy to release the mortgage funds to your Solicitor.

Equity describes the difference between the value of the property and the amount of the mortgage, what the property is worth to you if sold.

Equity Release Mortgage describes an additional mortgage obtained on a property, topping up an existing mortgage, for Home Improvement usually. Normally obtained where a significant equity exists.

FTB is a First Time Buyer, never owned a property before, anywhere!

Finance Ireland relative newcomer in Mortgage Market having taken over the business of Pepper Residential Mortgages. Formerly a major Irish Leasing Company, has competitive Mortgage offering available through Pat Fleming Mortgages as Agents.

Fire Policy, or General Home Insurance, is required by a Mortgage Firm to be in place prior to a mortgage drawdown. The Mortgage Firm register an “Interest” in the policy meaning in the event of a policy claim, the proceeds of that claim go directly to the Mortgage Firm. 

Foreclosure, in the event of default of a mortgage, as a last resort the Mortgage Company move to seize a property so as it can be sold to discharge the debt.
Galway Property Mortgages the Registered Business Name of Pat Fleming, also trades as Pat Fleming Mortgages.

Gift Letter. If a gift forms part of the funding of a property in addition to the Mortgage, a Mortgage Firm will request this from the Donor – it will disclose relationship to Applicant, amount of gift, establish it is not to be repaid and that the Donor cannot claim any interest in the property later. The Donor will be urged to seek Independent Legal Advice.

Gross Income is the full pretax earning level of an applicant.

Haven Mortgages, a subsidiary of AIB Bank, available through Pat Fleming Mortgages as Agents.

HTB Scheme, available to First Time Buyers, Help to Buy a new built home by refunding Income Tax paid by the Applicants over the previous 4 years. Applicants can get 5% of the purchase price of the property refunded up to a maximum of €20,000.
ICS Mortgages see also Dilosk DAC, principally residential property investors bank, but now also lender for main residences with range of competitive rates and terms particularly for Public Sector Employees. Available through Pat Fleming Mortgages as agents.

Interest Rate the percentage of the mortgage amount paid back annually, can be Fixed for a period or Variable changing at will.

Intermediary or Broker, simply acts as a go-between linking a provider with a consumer. Must add value to the transaction.

KBC is a Belgian owned bank but operating in Ireland since 1978, and a well established Mortgage Firm here. Available through Pat Fleming Mortgages.

Letter of Offer is the ultimate confirmation you are approved, better than an Approval in Principle. No agreement should be made to purchase a property, even at auction, unless you have obtained this.

Life Assurance, required for a Mortgage, cheapest form is Mortgage Protection Assurance, can be avoided in some instances if over 50 by signing a Waiver. If suffering from an illness preventing Lifecover, discuss with your Lender, can still obtain a Mortgage in some instances.

LTV Loan to Value, the percentage portion of the value of a property, or purchase price, the proposed mortgage represents. Lower LTVs can in most instances enhance eligibility for a mortgage, and attract lower interest rates.

MARP Mortgage Arrears Resolution Process is a unit and process in Mortgage Firms charged with Customer Negotiation of Mortgages in difficulty.

MDIR Minimum Disposable Income Requirement, see NETS, an individual is limited to the amount they can be seen to repay to debt and Mortgage from their monthly Net Income. Also referred to as MSR% (Minimum Service Ratio).

Margin is the amount of the Interest Cost to the borrower that accrues to the Mortgage Firm. It is not necessarily their profit, as their costs have to come out of that figure. But it excludes their own. Cost of Capital on to which the Margin is added. It should reflect the risk in a proposition, but in the case of mortgages it is preset so all qualifying mortgages enjoy the same margin. See LTV for only way to reduce margin.

Money Laundering Requirements. Requires the Mortgage Company and Intermediary/ Broker obtain Photo ID and Proof of Address of all Applicants, but you may also be asked to explain larger contributions of money to the property purchase being made.

Mortgage is the legal name for the type of Security aka Collateral the Mortgage Company take in return for providing finance. For the duration of the outstanding debt to the Mortgage Firm, their name will be placed on the Deeds of the property preventing it be sold, transferred or otherwise changed without reference to them.

Mortgage Protection Policy is a Life Policy specifically designed to match a mortgage advance in amount and term, should pay mortgage in full in event of death.

Mortgagor, Mortgage Firm providing the mortgage.

Mortagee, person taking out Mortgage.

Mover is the type of mortgage where a property is sold and applicants are moving to a new property. Mostly trading up to a larger home, trading down generally removes need for mortgage.

Multiplier the factor Gross Incomes are multiplied by to give one measure of mortgage eligibility. Currently 3.5 is the recognised factor.

NDI Net Disposable Income, the amount of Net Income left after Mortgage Repayment proposed, or vice versa after all outgoings and available for mortgage repayment. Key measure in assessing mortgage eligibility.

Negative Equity, see Equity, describes where the mortgage amount is greater than the value of the
home, and is the value of the shortfall.

NETS Net Income Ratio. Describes the amount of Net Income made available for Mortgage Repayment, or overall Debt repayment. Generally in the 40% bracket, but changes with Income levels. It limits the amount that can be applied to debt out of net income. An individual with abnormally low upkeep spend and high level savings is still restricted to the amount of Net Incomethey can use for a mortgage repayment.

Next Time Buyer is a person who already owns a home, or has owned one before, and is now
purchasing a new home.

Notice of Assessment/Tax Balancing Statement evidential documents produced by self employed in support of a mortgage application disclosing Income as submitted to Revenue.

Offer Letter is the absolute contract offering you a Mortgage, subject to your Acceptance, and is far superior to having AIP above.

OSI Ordnance Survey Ireland where all site maps are obtained

Owner Occupier as distinct from a tenanted property, owned and lived in by applicant.

PC Sums or prime cost sum describes in a contract a builders estimate of items not yet decided on by the client ie tiling, fireplaces, kitchen units in making up a full cost estimate of the property. In reality these amounts will change later.

P60 is a tax form summarizing Gross Income and Tax Deducted foe PAYE workers over a 12 month Calender Year.

PDH abbreviation used to denote a Private Dwelling House.

PRA Proven Repayment Ability. Despite qualifying with an acceptable NDI some applicants can fail this test which measures the actual monthly net income realised as evidenced in bank account statements. A Mortgage Firm generally seeks 6 months bank statements to peruse, and if the surplus funds they need to prove eligibility is not evident in reality, an application can fail.

Pepper Commercial. Commercial Lending Bank to both Companies and Private individuals contact details through Pat Fleming Mortgages.

Pepper Mortgages, an Agency who manage challenged secured debt on behalf of alternate Mortgage Companies or Debt Holders, negotiate ongoing repayment or secure settlement.

Professional Indemnity Insurance, a prerequisite for a Supervising Architect or Engineer of a Self-Build property to be acceptable to a Mortgage Firm. Protects Mortgage Firm, but applicants also, against any defects in the property due to Professional malpractice or oversight.

Property Registration Authority. Combined the Land Registry and Registry of Deeds into one. This is where all ownership of property is recorded ultimately.

PTSB operating as a Mortgage Firm for many years, formerly Irish Permanent Building Society and Trustee Savings Bank. Available through Pat Fleming mortgages.

Portfolio, in relation to property, the number of properties owned by an individual is described as being their “Portfolio”.

Recommendation is added to each Mortgage Application by the lending official prior to submitting to a loan underwriter. It is vital the lending official is satisfied to strongly support an application. This summing up of an application is generally not shared with the applicants. At Pat Fleming Mortgages it is policy to share this statement of support with the applicant(s).

Repayment the amount paid by you regularly to part redeem your mortgage.

Repayment Capacity used to described the amount an individual has available after living expenses and debt repayment to meet a mortgage repayment.

Right First Time TM is a proven assessment pr ocess owned by Pat Fleming Mortgages designed to test mortgage eligibility pre-application and make recommendations that will improve applicant(s) profile(s). The aim of the process is in the name, and the object is to avoid applicants being declined a mortgage as this is a major setback to future eligibility. 

Salary Certificate is a document completed by your employer evidencing your Income, Supplementary Allowances and Status of your Employment.

Security aka Collateral, refers to the surety a lender obtains, in the case of a Mortgage Firm it is a property on which a charge is placed for the duration of the term of the Mortgage.

Searches carried out by a Solicitor, looks in to the Title of a property, and ensures there is nothing there preventing a purchaser from obtaining clear ownership of the property and making it available in support of a mortgage to a Mortgage Firm.

Self Build describes a mortgage application supporting the building of a property by the applicants either by Direct Labour or Builders Contract.

Split Rate is having a portion of your Mortgage on Variable Rate and a portion on Fixed Rate. Useful if you plan to make out of course lump sum repayments over the Term of a Fixed Rate.

Stamp Duty a Government Tax levied on the Purchase of a Property based on value.

Stressing. Any assessment that measures the “worst case” scenario as applied by the Mortgage Firm. Amounts of 2% or 3% are added to the current mortgage rate, salaries earned abroad can be discounted for Exchange Rate fluctuations, rental incomes discounted for unoccupancy.

Switcher: the process of moving from one Mortgage Firm to another to obtain a better deal. Little used facility when in fact it can make a significant monetary difference, and the process is very streamlined and supervised by the Director of Consumer Affairs. Can be arranged through Pat Fleming Mortgages.

Tax Clearance Certificate, available to Self Employed on ROS (Revenue Online Services) confirming Taxes are up to date.

Term the amount of time a Mortgage is scheduled to be in place. Not rigid, reductions in term can be effected by overpayment regularly.

Tiered Rates the process of offering varying rates depending on criteria, generally LTV. The more attractive a proposition as regards LTV the better the rate. It might not make sense to borrow at 71% LTV if a significantly better rate were available at 70%. Ask always where your application fits.

Title describes the nature of ownership of a property, sometimes Leasehold most often Freehold.

Tracker Rate, a mortgage rate based on the European Central Bank Rate plus a Margin. Unobtainable now. However, if you have a Tracker Rate, most banks have a facility for continuance of your rate with some conditions if you contemplate moving house.

Underwriter the person tasked within a Mortgage Firm to assess a Mortgage Application. Important an application is structured to meet their stringent criteria.

Valuation carried out by a Professional Valuer. Puts a monetary value on a property at a point in time.

Variable Rate is an Interest Rate on your Mortgage that is subject to change either at the discretion of the Mortgage Lender or more transparently by reference to a Funding Rate plus Margin e.g. a Tracker Rate was based on the ECB Rate plus a Margin.

Galway Property Mortgages is regulated by The Central Bank of Ireland. Any reference to eligibility in these definitions is subject to all normal criteria being assessed, and no assumption of qualifying for a mortgage or other reliance on the content should be assumed until a formal mortgage application is made.