Mortgage terms
Additional Expenditure
Expenditure to cover basic quality of living costs (items that are difficult to reduce) such as insurance premiums, educational fees, pensions and other ongoing payments.
Annual Accounts
An annual report on an organisation's activities during the last financial year, including a report from the Trustees/Directors and showing income & expenditure in the period.
Arrangement Fee
An administration charge made by the Bank for arranging credit. Part is normally payable upon application and the remainder is payable when the Borrower accepts an offer of mortgage.
Articles of Association
The internal rule book that every incorporated organisation must have and work by. It forms a part of the constitution of an organisation.
Assets
Anything which is owned by a person or organisation. This can be property, vehicles, equipment, money held in cash or in a Bank account, etc.
Bank of England Base Rate
The official bank rate (also called the Bank of England base rate) is the interest rate that the Bank of England charges Banks for secured overnight lending.
Basic Essential Expenditure
Expenditure for an individual's day-to-day needs which would include items such as food, utilities and council tax.
Buildings Insurance
This covers the cost of damage to the structure & fittings of your property.
Buy To Let
Buying a property to let to tenants rather than to live in.
Cash Reserves
Money set aside by an individual or a company for use in an emergency.
Charitable Trust Deed
The constitution for a Charitable Trust which defines how the Trust should operate.
Charities
Non-profit organisations that have exclusively charitable purposes and exist for public benefit.
Charities Act 2011 Section 124
The requirement to obtain independent financial advice which advises on whether the proposed loan is necessary, whether the terms are reasonable and whether the Charity has the ability to repay.
Charity Commission, The
The independent regulator for charities in England and Wales.
Charity Registered Name
The name under which the Charity is registered with The Charity Commission.
Charity Registered Number
The registration number provided by The Charity Commission once registered.
Church/Charity Building Repairs & Maintenance
Work required on the commercial property owned or being purchased by a Church/Charity Organisation to remedy a problem or replace worn out elements.
Church/Charity Building Extension or Renovation Project
Project to modify the commercial property owned or being purchased by a Church/Charity Organisation.
Church House
Residential property owned by a Church Organisation often used to house Church Minister or other staff employed by the Church.
Church Office
Commercial Property used by a Church Organisation as its central office of administration.
Church Plant
New location of an existing church ministry designed to grow the ministry in another locality.
Church Premises
Commercial property owned by a Church Organisation for use as their place of worship.
Church Workers
Employees of the Church Organisation, often living in tied-housing.
Committed Expenditure
An individual's credit agreements and other contractual commitments.
Community Centres
Commercial Properties used to provide facilities for community activities.
Companies House
Companies House is the United Kingdom's registrar of companies.
Company Number
The number provided by Companies House once a company is registered with Companies House.
Consumer Buy-to-Let Mortgage
There are some situations where borrowers do not seem to be acting in a business capacity. Examples of this may be where the property has been inherited or where a borrower has previously lived in a property, but is unable to sell it so resorts to a buy to let arrangement.In these cases, the borrower is a landlord as a result of circumstance rather than through their own active business decision.
Constitution
A written set of rules by which an organisation is governed. The type of document used will vary depending on the type of organisation.
Contractual Monthly Payments
The minimum amount which the Borrower must pay to the Lender under the terms of the mortgage.
Covenants
Part of a formal written agreement in which it is stated what must or must not be done, or in which someone promises to do or not do something.
Deposit
The Borrower's contribution towards the purchase or project.
Directors
The group of people chosen or appointed to manage a company or other incorporated organisation.
Discretionary Expenditure
Expenditure which can be more flexible such as charitable giving, entertainment, holidays and subscriptions.
Drawdown
When the mortgage funds are physically released by the Bank.
Early Repayment Charge
A charge made by the mortgage lender if the borrower terminates a mortgage within a set period of time following initial drawdown or following agreement of amended terms.
Enhanced Housing Benefit Mortgage
A mortgage provided to an Organisation or Individuals for the purchase of a property which is to be used to house persons with care needs qualifying for higher levels of Housing Benefit.
ESIS
ESIS stands for 'European Standardised Information Sheet'. Some lenders may refer to this as 'the illustration'. This document is similar to the previously used Key Facts Illustration (KFI) document. The ESIS contains details about the mortgage and terms being offered and is standardised to make comparisons between the lenders easier.
Facility Offer Letter
The formal offer of a mortgage from the lender to borrower.
Fact Find
A Fact Find is a detailed questionnaire that looks at your circumstances and your personal preferences to enable a recommendation to be made for advised mortgages.
First Legal Mortgage
A legal charge used to secure the mortgage. A lender with a first legal charge over a property has a first call on any funds available from the sale of the property. This usually gives powers of sale to the Lender if the Borrower defaults in making the contractual monthly payments.
Gift Aid
A scheme enabling registered charities to reclaim tax on a donation made by a UK taxpayer.
Governing Instrument
A governing instrument is the formal document which sets up a charity and is often known as a constitution.
Housing Co-Operatives
An organisation offering homes to people in housing need at affordable rents. In most cases, anyone taking a tenancy of such accommodation also has to be a member of the co-operative.
Independent Advice in compliance with Section 124 of the Charities Act 2011
Written advice (usually in the form of a letter or report) which advises on whether the proposed loan is necessary, whether the terms are reasonable and whether the Charity has the ability to afford the monthly repayments.
Independent Surveyor
An individual or firm appointed by the Lender to confirm the value of a property for mortgage purposes.
Legal Charge
The means by which lenders enforce their rights to a property; it is registered at HM Land Registry in all cases and if the Borrower is an incorporated body, also registered at Companies House.
Liabilities
The financial obligations of a person or organisation (eg. money owed to Lenders, Suppliers, Employees, etc.).
Life Assurance
A form of insurance providing for the payment of a specified sum to a named beneficiary on the death of the policyholder.
Loan to Value
The ratio between the sum of money lent on a mortgage agreement and the value of the security property as confirmed by the Lender.
Management Accounts
Set of summarised accounting data (balance sheet, cash flow, income & expenditure statement) prepared and presented on a regular basis (monthly / fortnightly / weekly) to enable an organisation's management to make informed decisions.
Manse
A home provided by a Church Organisation for its Leader/Pastor/Minister to live in while employed by the church.
Memorandum of Association
A document that regulates a company's external activities, drawn up on the formation of an incorporated organisation. As the company's charter it (together with the company's articles of association) forms the company's constitution.
Minister Accommodation
A home provided by a Church Organisation for its Leader/Pastor/Minister to live in while employed by the church.
Minister's House
A home provided by a Church Organisation for its Leader/Pastor/Minister to live in while employed by the church.
Mortgage Term
Period over which the mortgage agreement is in force and the time period over which the mortgage should be fully repaid.
Personal Mortgage with Consent-to-Let
A personal mortgage for Borrowers who may wish to let to tenants initially or in the future but with the option to live in the property at any time.
Place of Worship
Premises used by a Church Organisation in which its congregation meet regularly.
Planning Permission
Formal permission that must be obtained from a local authority before development or a change of use of land or buildings.
Pledges
Unlike a donation which is an outright gift, a pledge is a promise to donate later (either as a one-off amount or a series of regular payments).
Property Reinstatement Valuation
Reinstatement refers not to the market value of the property, but what it would cost to rebuild using like materials and methods of construction.
Property Valuation
An expert's assessment, appraisal or opinion as to the market value of the property.
Rectory
A home provided by a Church Organisation for its Leader/Pastor/Minister to live in while employed by the church.
Registered Office Address
All UK companies require a registered office address, which is the official address for all correspondence from Companies House and HMRC.
Security
An asset pledged as collateral for a loan which then becomes a secured debt owed to the creditor who gives the loan.
Sending Agency
The Missionary Organisation or Charity who support, employ and/or train missionaries for their work in the UK and overseas.
Social Action & Social Return Projects
Projects designed to make a difference within the community and improve the lives of people in need, often meeting accommodation needs through housing.
Social Enterprise Organisation
Organisations making resources, activities and venues available in their community which would not otherwise exist. This type of organisation seeks to maximise social impact rather than maximising profits.
Staged Drawdown
When mortgage funds are physically paid out in stages rather than in one amount, usually against works completed on a property (eg. the construction of a new building or the refurbishment/extension of an existing building).
Supported Housing Mortgage
A mortgage provided to an Organisation or Individuals for the purchase of a property which is to be used to house persons with care/supervision needs, usually qualifying for higher levels of Housing Benefit to cover the cost of running the house.
Supported Living Mortgage
A mortgage provided to an Organisation or Individuals for the purchase of a property which is to be used to house persons with care/supervision needs, usually qualifying for higher levels of Housing Benefit to cover the cost of running the house.
Tenure
The status of the property (usually freehold or leasehold in England & Wales).
Trustees
Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. Charity trustees are responsible for the general control and management of the administration of a charity.
Valuation Fee
Fee paid to surveyor/valuer for the carrying out of a property valuation.
Vicarage
A home provided by a Church Organisation for its Leader/Pastor/Minister to live in while employed by the church.
