Glossary - A
- Ability To Pay
- 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
- Allows the lender to take the balance of a loan if a borrower misses one or more payments.
- Acceptance
- 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
- 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
- Insurance that protects if you suffer certain injuries, such as loss of a limb or vision.
- Accident, Sickness And Unemployment Insurance
- 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
- See, bank account, credit account, foreign currency account, insurance account and trade account.
- Added To Loan
- 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
- An extra payment each month to help reduce a debt Additional Security top 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
- Interest a mortgagee pays to the lender for the duration of the loan. Adjustment Date top The date on which interest rates change for variable rate mortgages.
- Administration Charge
- 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
- 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
- Amount of your mortgage/loan. See also cash advance.
- Advice Centre
- 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
- 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
- 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 top 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
- A payment or report which is due once each year.
- Annual Bonus
- 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)
- 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 top Another term for a capital & interest mortgage.
- Applicant
- Anyone who applies for a mortgage, or other financial product
- Applicant Type
- A method of classifying applicants by status or other market segment. E.g. first time buyer Application top 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
- Any charges made to apply for a mortgage.
- Applied Or Nominal Interest Rate
- Rate used to calculate interest APR top See annualized percentage rate
- Arrangement Fee
- A fee charged by a lender for arranging the loan. Normally payable upon completion but may sometimes be added to the loan. Arrears top 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
- A charge for any late payments. See late payment fee Asking Price top 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
- 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
- Income protection policy to cover for loss of earnings caused by accident, sickness, or unemployment. Atrium top The inner courtyard of a home or other property that is open to the sky.
- Auction
- 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
- A person who controls an auction.
- Audited Figures
- 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
- A mortgage where the repayment period is reduced due to interest being calculated daily.
- Average
- 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".
The Mortgage Shop is a trading style of Mortgage Shop No1 Limited which is an appointed representative of Personal Touch Financial Services Limited which is authorised and regulated by the Financial Services Authority. The Mortgage Shop is entered on the FSA register (http://fsa.gov.uk) under reference 425677. Buy to let mortgages may not be regulated by the FSA & personal loans are not regulated by the FSA. The guidance and/or advice within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
There will be a fee for mortgage advice of £299. Telephone calls may be recorded for training purposes.
