| APR
(Annual Percentage Rate) |
The
annual interest rate of the loan when all costs (fees, HLC, etc) are
taken into account as opposed to the mortgage interest rate, which
only applies to the loan amount. |
| Arrangement
Fee |
A
lender's fee for a particular mortgage product. |
| Basic
Survey |
As
Mortgage Valuation, but with a more in-depth report on the condition
of the property. |
| Booking
Fee |
See
'Arrangement Fee' as this is the exact same, but tends to be used
when applying for a fixed rate mortgage. |
| Buildings
Cover |
Insurance
to protect the building aspect of the property from flood, fire or
accidental damage depending on the policy. |
| Capital
& Interest |
Loan
repayment type. This is commonly referred to as "Repayment" and is
when the monthly mortgage repayments are made up of interest payments
and capital repayments, which over the term of the mortgage are designed
to repay the loan amount in full at the end of term. |
| Contents
Insurance |
Insurance
to protect the contents of the property from flood, theft, fire or
accidental damage depending on the policy. |
| Coveyancer |
Licensed
person who carries out the legal requirements of a property purchase
- just as a solicitor would do. |
| Critical
Illness Cover |
Policy
which pays out a lump sum or monthly benefit if a predefined illness
is contracted during the period of the policy. |
| Decreasing
Term Assurance |
Life
assurance policy where the amount of cover reduces over the period
of the policy. Normally used in conjunction with a Capital & Interest
mortgage. |
| Endowment |
A
policy provided by a Life Assurance company where a portion of the
premium is invested for growth and another portion provides life cover
over a pre-defined period. |
| Exit
Fee |
Term
used by lenders for the administration fees they charge when a mortgage
is redeemed in full. These increased significantly over the past couple
of years, but have been reined back by the regulator. |
| FSA
(Financial Services Authority) |
The
regulator of banking, investment, pensions, most mortgages and insurance. |
| Full
Structural Survey |
A
complete inspection of a property by a surveyor and should be considered
on older or specialist properties. |
| Higher
Lending Charge (HLC) |
This
is an insurance policy to protect the interests of the lender when
the borrowing exceeds a given percentage of the value of the property
and is paid for by the borrower for the lender's benefit. |
| Interest-Only |
Loan
repayment type. This is when the monthly mortgage repayments are made
up of interest payments only with the capital remaining unpaid. E.g.
on a £100,000 interest-only mortgage over 25 years, the £100,000 would
remain outstanding and be liable for payment after 25 years. |
| ISA
(Individual Savings Account) |
Tax
efficient savings & investment wrapper sometimes used to repay the
capital element of a mortgage |
| Level
Term Assurance |
Life
assurance policy where the amount of life cover remains the same through
the term of the policy. |
| LIBOR
(London Interbank Offer Rate) |
The
interest rate at which banks lend each other money on the money markets. |
| Mortgage
Payment Protection Insurance (MPPI) |
Insurance
to cover the mortgage repayments in the event of illness, incapacity
or redundancy. The benefits are paid after normally 30 days and for
a period of 12 or 24 months. Some employment types may not be covered. |
| Mortgage
Protection Cover |
Another
name for 'Decreasing Term Assurance'. |
| Mortgage
Valuation |
Valuation
carried out by surveyor to give a value of the property and any obvious
defects with the property. This is the minimum required by lenders. |
| Telegraphic
Transfer |
The
system by which the money is transferred to your solicitor/conveyancer
to complete the property purchase. |
| Waiver
of Premium |
Insurance
policy attached to Life and Critical Illness policies that will pay
your premiums after a specified period of illness or incapacity until
the either the end of the term or you are fit to return to work. |
