Ability To Pay
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| A way of finding out the creditworthy-ness
of a customer, by estimating how much will be left to make payments
on a loan or mortgage after other deductions have been
made from gross income. |
Acceleration Clause
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| Allows the lender to take the balance of
a loan if a borrower misses one or more payments. |
Acceptance
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| A positive answer to an offer or a counter-offer.
Acceptances may be, express, conditional, implied or qualified, depending
on the circumstances of the deal and whether there are any further
conditions or requirements. |
Accident
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| An unexpected happening, usually referring
to an injury or fatality, although in some accidents it is just property
that gets damaged. Although some accidents are easier to prevent than
others, the financial damage can be limited by taking out accident
and sickness insurance, and ensuring that your car, house and other valuable
property are properly covered. |
Accident Insurance
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| Insurance that protects if you suffer
certain injuries, such as loss of a limb or vision. |
Accident, Sickness And Unemployment Insurance
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| Insurance protection arranged by the mortgage
borrower to protect against inability to meet mortgage payments. Unemployment
cover is restricted to cover certain events only. Exclusions to this
insurance include dismissal due to professional misconduct or taking
voluntary redundancy. The accident and sickness cover does not cover
any act of self injury or any injury related to the use
of alcohol or drugs. |
Account
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| See, bank account, credit account, foreign
currency account, insurance account and trade account. |
Added To Loan
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| The extra costs associated with arranging
a mortgage that includes a high loan to value fees or arrangement
fees that can be added to the amount you borrow. Fees that may
be added vary by lender. |
Additional Principal Payment
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| An extra payment each month to help reduce
a debt |
Additional Security
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| When borrowing exceeds a certain loan
to value, lenders may require additional security. The simplest
form of additional security is a single mortgage loan-to-value; however
other security such as cash or shares may be accepted as security. |
Add-On Interest
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| Interest a mortgagee pays to the lender
for the duration of the loan. |
Adjustment Date
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| The date on which interest rates change
for variable rate mortgages. |
Administration Charge
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| A fee charged by banks or other financial
institutions to cover costs beyond day to day running of an account.
This typically involves banks sending letters to customers to tell
them they have gone overdrawn |
Administration Charge
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| Lenders can 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 returned,
even if the valuation has not taken place. See valuation fee. |
Advance
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| Amount of your mortgage/loan. See also cash
advance. |
Advice Centre
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| A centre which can offer advice on personal
issues, including financial problems such as debt, unemployment or
divorce. The most popular advice centres include: Citizens' Advice
Bureau, Student Advice centres, Job centres, and some council "one
stop shops". |
Affidavit
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| From the latin verb affidare, "I have pledged" A
legal statement made in writing and in the presence of a solicitor or
other legal professional. |
Affidavit Swear Fee
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| 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
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| This you receive when you have been accepted
for a mortgage or other financial product, but it will depend on issues
such as a valuation report and confirmation of employment. |
Annual
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| A payment or report which
is due once each year. |
Annual Bonus
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| A bonus paid every year on an endowment
policy which is dependent on the performance of the investment
fund being used to repay your mortgage. |
Annualised Percentage Rate (A.P.R)
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| This explains the true cost of borrowing and
a standard in order to provide a method of comparing costs of different loans.
Initially lenders were not obliged to quote an APR due to its inappropriateness
in comparing mortgage loans. |
Annuity Mortgage
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| Another term for a capital & interest
mortgage. |
Applicant
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| Anyone who applies for a mortgage,
or other financial product |
Applicant Type
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| A method of classifying applicants by status
or other market segment. E.g. first time buyer |
Application
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| The process of applying for credit,
or other products. The majority of credit applications need to be made
in writing, although with technology the internet is increasing in
popularity. Even internet based credit applications though will usually
require you to sign documents before the application is finalised. |
Application Fee
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| Any charges made to apply for a mortgage. |
Applied Or Nominal Interest Rate
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| Rate used to calculate interest |
APR
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| See annualized percentage rate |
Arrangement Fee
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| A fee charged by a lender for arranging the loan.
Normally payable upon completion but may sometimes be added to the loan. |
Arrears
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| A late payment, or a payment after
the event, for example most salaries are paid "monthly
in arrears" payment one month after commencement of work. |
Arrears Fee
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| A charge for any late payments. See late
payment fee |
Asking Price
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| When a house is put on the market, this is
its starting price for which the property owner is looking to sell
their property. It is rare for the asking price to get paid, except
in a rising property market. |
Assumption
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| When a buyer assumes the loan payments and
obligations of the seller. If the purchaser defaults on the loan both
the buyer and seller are responsible for the debt. |
ASU
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| Income protection policy to cover
for loss of earnings caused by accident, sickness, or unemployment. |
Atrium
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| The inner courtyard of a
home or other property that is open to the sky. |
Attic
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| A space in between the ceiling
and the roof of your house. It can often be converted into an extra
room, perhaps increasing the value of a property. |
Auction
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| The process whereby something is bought at
a price by bidding. If you bid for and win a home at an auction you
will be legally bound to buy the house. |
Auctioneer
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| A person who controls an auction. |
Audited Figures
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| Business accounts that have been ratified
by an accountant. Self employed people may need to provide 2 or possibly
3 years worth of figures checked by an auditor to be able to get a
mortgage. |
Australian Style Mortgage
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| A mortgage where the repayment period is
reduced due to interest being calculated daily. |
Average
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| The sum of any amount divided by the number
count. A statistical term often used to describe financial figures,
such as "average house prices", "average earnings". |
