USEFUL INFO

GLOSSARY

Confused by property speak? You will encounter plenty of jargon and technical terms when looking for a property or а mortgage. Get ahead with our A to Z guide to property jargon.
Click on the letter below to search for the word you're looking for.

Ability To Pay
A way of working out how creditworthy a borrower is, by estimating how much they will have left to make payments on a mortgage after other deductions have been made from gross income.

Acceleration Clause
Allows the lender to collect the balance of a loan if a borrower misses one or more payments.

Acceptance
A positive response to an offer. Acceptances may be 'conditional', 'express', 'implied' or 'qualified', depending on the circumstances of the deal and whether there are any further mitigations, conditions or requirements.

Accident Insurance
Insurance that covers you if you suffer certain injuries, such as loss of a limb or vision.

Accident, Sickness & Unemployment Insurance (ASU)
Insurance which pays all or a percentage of your monthly mortgage payment for a specified period you are unable to work due to an accident, sickness or redundancy. This type of cover does not apply to voluntary redundancy or dismissal due to misconduct, or if your injuries are self-inflicted, any act of self-injury or any injury related to the use of alcohol or drugs. Also known as Payment Protection Insurance, Accident, Sickness and Redundancy Insurance (ASR) or Repayment Protection (MRP) or Mortgage Payment Protection Insurance (MPPI).

Accidental Damage Cover
Extra insurance on your buildings and/or contents insurance policy to cover you for accidental damage to the structure of your property and/or its contents.

Actuary
A professional that deals with calculations related to pensions, insurance and investments. In relation to your mortgage, an actuary will calculate the amounts payable for life assurance and other insurance policies you may need.

Added to Loan
There are a number of costs related to arranging your mortgage, for instance administration fees or indemnity fees. When these are added to the amount that you borrow it is known as ‘added to loan’.

Additional Principal Payment
An extra payment each month to help reduce a debt.

Additional security fee
An up-front, one off fee paid to the lender to protect them against the borrower defaulting on the loan. Usually, charged on mortgages over 75% of the house value. Also known as MIG, Indemnity Guarantee premium and Mortgage Indemnity Premium.

Adjustment Date
On a variable rate mortgage, this is the date on which the interest rate changes.

Administration Charge
Some lenders will reserve a proportion of the fee charged for the valuation to cover their own costs. If an application does not proceed, this part of the valuation fee may not be refunded, even if the valuation has not taken place. see Valuation Fee.

Administration Fee
A fee charged to cover the costs for processing the mortgage documentation, which is usually non refundable. Also known as an Application Fee.

Advance
The amount of your mortgage/loan the lender will advance. See also Cash Advance.

Adverse Credit
The term applied to a borrower or application with a poor credit history owing to late mortgage repayments, County Court Judgements (CCJs) or bankruptcy.

Affidavit Swear Fee
A fee charged when a mortgage lender is required to swear an affidavit. This is a written legal statement to a solicitor in connection with mortgage arrears.

Agreement In Principle
A lender agrees to lend mortgage monies or other financial product, but it will depend on issues such as a valuation report and confirmation of employment. An agreement in principal is therefore obtained before formal underwriting commences.

Agricultural
This is a planning condition which permits the erection of a residential dwelling providing it is occupied by a person employed or associated with working on the land. Properties subjected to such a covenant are effectively "blighted" by this stipulation and values are relatively low because they cannot be sold to anyone who fails to meet the conditions imposed, unless the planning authorities agree to lift the covenant.

Agricultural Restriction
A covenant restricting the use of a property to agriculture.

Amortisation
The reduction in the amount of your mortgage during its term as you make regular payments to cover the principal and interest.

Amortisation Term
The amount of time, in months, required to pay off your mortgage loan.

Annual Bonus
A bonus paid annually on an endowment mortgage which is dependent on the performance of the investment fund being used to repay your mortgage.

Annual Percentage Rate (APR)
An interest rate quoted by lenders to compare the true cost of different mortgages. It is a legal requirement that a lender is always provided to quote the true APR when advertising a loan or borrowing rate.APR takes into account all fees and charges applied to the mortgage as well as the payments over the life of the loan. The APR will be clearly shown on the Key Facts Illustration (KFI) which you will receive before you apply for the mortgage.

Annualised Payment Scheme
Under some variable rate mortgages, to make it easier for the borrower to budget when repayments will vary with any rate change, the lender may fix the mortgage payment for 12 months. At the end of the year, the borrower's payments will be reviewed to see if they have under or over-paid, and a new mortgage payment is set for the next 12 months. known as a ‘budget plan’.

Annuity Mortgage
Another term for a capital & interest repayment mortgage.

Applicant(s)
The individual or individuals or party who apply for something and whose name(s) will appear on the documents.

Application
The process of applying for mortgage, credit, or other products.

Application Fee
Any charges made for an application.

Applied Interest Rate
Rate used to calculate interest due. known as a ‘Nominal Interest Rate.

Appraisal
Carried out by a potential selling agent or a surveyor and, in their opinion, is the current marketing price of the property.

Appraised Value
The value of a property, as estimated by a surveyor.

Appreciation
The increase in the value of a property as a result of changes in market conditions. (The opposite of depreciation)

APR
See Annual Percentage Rate.

Arbitration
Refers to the involvement of an independent third party to resolve a dispute between two other parties (rather than resort to legal action).

Arrangement Fee
A fee charged by a lender to cover the costs of administering and reserving the funds for certain types of mortgage. Payable upon completion or added to the loan amount.

Arrears
A late payment, or a payment after the event, behind schedule, for example most salaries are paid "monthly in arrears" - i.e. the first payment is one month after commencement of work.

Arrears Fee
Charges for any late payments. see Late Payment Fee.

Asking Price
The initial starting price for which the property owner is looking to sell their property.

Asset
Any form of property owned by a person, including currency, stocks, and enforceable claims against others.

Assignment
The transfer of an asset, ownership of an insurance policy or lease or a mortgage, from one owner to another.

ASU
See Accident, Sickness & Unemployment.

Auction The sale of a property to the highest bidder. If you bid for and win a home at an auction you will be legally bound to buy the house.

Audited Figures
These are a set of business accounts that have been ratified by an accountant. Self employed people may need to provide 3 years worth of figures checked by an auditor to be able to get a mortgage.