Mortgage glossary - M

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Mortgage terms defined on this page:

Mortgage

In legal terms, a mortgage is a deed that pledges freehold or leasehold property as security for a loan. If the borrower does not maintain repayments, the lender has the right to resell the property.
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Mortgage Indemnity Guarantee (MIG)

See Higher Lending Charge.
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Mortgage Guarantee Premium

See Higher Lending Charge.
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Mortgage Offer

This is the document issued by a mortgage lender to a prospective borrower, after their mortgage application has been approved. It will set out the conditions of the mortgage. Study it carefully and make sure your solicitor sees it. The mortgage offer is normally valid for three to six months, but the lender may withdraw your funds at their own discretion – for instance, this may happen if you’re made redundant.
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Mortgage Protection Policy

This is a particular type of life insurance policy that relates to your mortgage. The sum payable on your death decreases as time goes on, as it should only cover the outstanding mortgage amount. Some lenders may insist that you take out a mortgage protection policy as a condition of lending you the money.

Compare mortgage protection cover.

Mortgage Term

This is the number of years over which the mortgage is arranged. 25 years is standard, but available mortgage terms will differ from lender to lender. The average length of time that people keep one mortgage before moving house is around seven years.
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Mortgage Valuation

This is a basic survey that lenders require before approving a mortgage. The borrower normally receives a copy of the mortgage valuation, but should ideally obtain a full structural survey before committing to buying the house.
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Mutual Membership Terms

Sometimes taking out a mortgage enables the borrower to become a mutual member of the lending organisation. This may include voting rights or entitlement to windfall benefits.
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THINK CAREFULLY BEFORE SECURING ANY DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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