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Approval in principle
A certificate which some lenders will give you that shows the amount they will probably be prepared to lend you. This is not a guarantee, but can be helpful when making offers through estate agents.
APR
Annual Percentage Rate. This shows the overall cost of a loan, taking into account the term, interest rate and other costs.
Arrangement fee
This Is normally charged by the lenders for arranging a mortgage loan. It may be paid separately or added to the loan.
ASU
Accident, Sickness and Unemployment. This Is an Insurance policy designed to provide a regular Income for a specified period, should the borrower become
unemployed or be unable to work due to an accident or sickness resulting in a loss of earnings.
Bank of England base rate
This is the benchmark lending rate regulated by the Bank of England. If this is
altered in an attempt to control the overall economy, then the lenders will normally follow Its movement and alter their own Standard Variable Rate.
Capital and interest
Monthly repayments to a lender are made up of Interest and capital which reduces the mortgage debt over time (also known as a repayment mortgage).
Capped rate
Some lenders will, for a guaranteed period, ensure that your rate does not exceed a fixed upper limit, even if interest rates rise beyond that limit.
Cash-back
A type of mortgage where you will receive a cash lump sum at the commencement of your mortgage. The amount will vary depending on the scheme offered.
CCJ
County Court Judgement. A decision made in the County Court, usually for the nonpayment of a debt which Is registered on your credit File. Once the debt Is paid
("satisfied"), and a satisfaction certificate obtained, It Is also noted on your credit
file.
Completion
The day that money changes hands and you become the new owner and can move In to your property.
Contracts
The legal documents under which the buyer and seller of the property agree the
terms.
Conveyancing
The process of transferring ownership of the property. 
Credit search
The search your lender will carry out to determine your credit payment history.
Credit scoring
A process used by some, but not all, lenders to determine whether you are a good credit risk.
Critical Illness cover
An insurance policy, often combined with life insurance, which will pay out a lump sum following confirmed diagnosis of a critical illness as specified under the policy. The number of critical illness definitions varies depending upon the insurer.
Deposit
The amount of money you put towards the purchase of the property.
Disbursements
Costs which you will have to pay for things such as land registry, search fees etc. which are In addition to the fee payable to your solicitor.
Discount Rate
For an agreed limited fixed period, the lender will apply a discount off their standard variable rate. Generally, the shorter the discount period, the larger the discount.
Early repayment charge
A charge you may have to pay if you break off a mortgage deal - by paying it back early and/or moving to another lender.
Endowment
A savings plan with built-In life assurance which on maturity can help repay an "Interest-only" mortgage.
Exchange of contracts
The date at which both parties confirm the purchase/sale of the property through
solicitors. The purchase Is then legally binding. The buyer is responsible for the new property's buildings Insurance. All protection policies should be started at this point.
Extended tie-ins
This is where the early repayment charge applies even after the scheme date has finished. It means, in effect, that the lender requires the borrower to keep the mortgage with them after the scheme has ended, for a set period of time.
Fixed rate
The Interest rate Is set for an agreed period of time.
Flexible mortgages
A mortgage type that will allow flexibility of repayments. Options may
Include the ability to overpay, underpay or take payment holidays. Where the lender calculates interest an a daily basis any overpayments have an Immediate effect on
the outstanding mortgage balance.
FSA
The Financial Services Authority - the UK's financial watchdog.
Gazumping
This Is where the seller accepts an offer and agrees the sale only to accept a higher offer from another party before exchange of contracts has taken place.
Homebuyer's report
A Homebuyers Report, or a homebuyers survey, Is a surveyors assessment of the state of repair and condition of the property. The report will summarise the findings and make recommendations for further Investigations or remedial work If required. Any issues or concerns from the report can be discussed directly with the surveyor.
Higher Lending Charge
This insurance covers the lender if the property Is repossessed and the subsequent sale proceeds do not repay the outstanding mortgage debt and costs in full. The Higher Lending Charge protects the lender, not the purchaser who would still be responsible for the shortfall. When charged, this fee can be added to the loan amount.
Income multiples
The factor by which your earnings are multiplied to find out how much you can borrow,
Interest
The charge made by lenders when you borrow their money.
Interest rate
The figure that determines how much interest you pay. Usually linked to the Bank of England's rates and can move up or down.
Interest-only mortgage
A mortgage where you only pay the interest charges of the loan each month. This means you are not reducing the loan amount (or capital) itself, and this will need to be repaid in some other way.
Keyfacts documents
Standard documents that all authorised lenders and brokers must give you to explain their services and details about the mortgage you're interested in.
Income reference
The lender, will sometimes, request written confirmation of Income from your employer.
ISA
Individual Savings Account. A tax efficient savings plan which can be used to help repay an "Interest-only" mortgage. Tax assumptions are those currently applicable
and are subject to statutory change.
Leasehold
A form of land tenure where a person has rights over a piece of land for a specific
period. Most residential leases have long terms and are usually set initially at 99 years or 999 years.
Licenced conveyancer
An alternative to using a solicitor. They specialise In property ownership
transfer.
Life assurance
A policy taken out by most borrowers to help repay the outstanding mortgage debt
In the event of death.
LTV
Loan To Value. This refers to the size of the mortgage In relation to the value of the property. For Instance a mortgage of £75,000 on a property of £100,000 value is said to be 75% LTV.
Mortgage broker
A mortgage broker helps you understand the various mortgage types and deals available to them. A mortgage broker may recommend a mortgage for you or they may provide you with information to enable you to make your own choice.
Negative equity
Where the property has a value which Is lower than all the loans secured against It.
Non status
A mortgage arranged under Non Status terms where evidence of Income Is not
necessarily a requirement.
Offset mortgages
A relatively new mortgage type where you may be able to link your current, savings or deposit accounts to the mortgage, so that the positive account balances are
offset against the mortgage resulting in a reduced interest payment.
PEP
Personal Equity Plan. A tax efficient savings plan which can be used to help repay an "Interest-only" mortgage. Tax assumptions are those currently applicable and are subject to statutory change. PEPS are no longer available.
Personal pension
This is a structured savings and Investment plan designed to provide you with an
Income on retirement. As you can take some of the plan as cash it could be used to help repay an interest-only mortgage.
Remortgage
A new mortgage with a different tender even though you are not moving home. It can be of the same size, bigger or smaller.
Repayment mortgage
See Capital and Interest mortgages.
Sealing fee
A fee paid to your lender upon closure of your mortgage account. This fee typically covers the release of deeds and administration to close the account.
Searches
These are checks carried out during the Conveyancing process to determine any
planning proposals or other matters which might affect the purchase or future saleability of the property.
Secured
A mortgage is a secured loan on your home; this means that if you fail to repay it, your lender may be able to sell your home to get its money back
Self certification
A mortgage intended for borrowers who are unable to prove their income by normal means such as payslips and audited accounts. The borrower certifies their own income and must be able to afford the repayments.
Stamp duty
A tax which home buyers must pay on properties above a government set figure.
Standard variable rate
The Interest rate applied to the mortgage account when no other overriding scheme
such as a fixed rate is In force. It fluctuates and follows the Bank of England base rate.
Structural survey
This is based on a detailed Inspection of the property and reports on the general structural condition. It Is typically for older or unusual properties. This is the most detailed, and most expensive, of the property reports available. Also known as a Full Building Survey.
Term
The period of years over which you take the mortgage.
Title deeds
Documents that show proof of ownership.
Tracker mortgage
The lender agrees a rate linked to the Bank of England base rate in the form of
either a loading or discount for a set period. The Bank of England review the base rate every month, although the reviews do not necessarily result in a change of
rate.
Transfer deed
The document that transfers ownership
Valuation Report
A brief inspection of the property for the benefit of the lender. This is to make sure
This is to make sure the value of the property is accurate and that it is suitable security to lend against. Most lenders will not show this report to the purchaser. See our Valuation Promise page
Vendor
The seller.
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