Ability To Pay
A method of establishing borrower's credit worthiness and ability to make mortgage payments by analysing income and expenditure.

Acceleration Clause
A request necessitating immediate repayment of any outstanding balance (usually on loan or mortgage) upon failure to keep up repayments.

Acceptance
An agreement that binds you to the terms of the offer.

Accident Insurance
A cover that guarantees a certain payment if, as a result of an accident, one has suffered death or other injury defined by the policy.

Accident, Sickness & Unemployment Insurance (ASU)
A cover protecting your full or partial monthly mortgage payments for a certain period as a result of loss of earnings through redundancy, long-term illness or accident.

Accidental Damage Cover
Additional cover for your building or contents in case of accidental damage of the same.

Actuary
A person qualified to undertake investments, pensions, insurance calculations.

Added to Loan
Extra costs in connection with arrangement, administration, insurance, etc that are usually added to the mortgage loan.

Additional Principal Payment
An agreed regular payment (usually monthly) towards the outstanding debt.

Additional security fee
A single payment to the lender protecting them against the borrower's inability to keep up with repayments.

Adjustment Date
The date when the interest rate changes on the variable rate mortgage.

Administration Charge
A percentage of the valuation fee retained by the lender in order to cover their own overheads.

Administration Fee
A mostly non-refundable payment to the lender for dealing with the mortgage application.

Advance
The actual sum transferred to the solicitors dealing with your mortgage.

Adverse Credit
A term describing a credit applicant who has a history of late mortgage/credit payments, CCJs (County Court Judgements) or bankruptcy.

Affidavit Swear Fee
A payment to cover the costs in drafting an affidavit (legal statement) when so required by the lender.

Agreement In Principle
A preliminary acceptance by the lender to offer their product subject to further information provided by the applicant and those acting on his behalf.

Amortisation
The process of regular repayments on your mortgage leading to reduction in the loan amount.

Amortisation Term
The period of time (usually in months) needed to complete payments on the mortgage.

Annual Bonus
An annual premium added to the endowment policy that is to be used to pay off the mortgage.

Annual Percentage Rate (APR)
A lenders rate of interest comparing the actual cost of mortgage. By law, APR must be quoted by lender when advertising their products.

Annualised Payment Scheme
Similar to budget plans offered by some utility companies. A scheme offered by some lenders on their variable rate mortgages, whereby a mortgage payment is fixed for 12 months. On completion of the fixed period, the total annual amount paid is reviewed to ascertain whether the account is over- or under- paid in order to re-adjust the next year's payments.

Annuity Mortgage
The same type of mortgage as repayment mortgage where both interest on the loan balance and part of capital is repaid at agreed intervals.

Applicant(s)
A person/s or party who decides to make an application for goods and/or services.

Application
The actual process of making an application, in this instance, for loan, credit and/or other.

Application Fee
A set amount of money that could be charged for processing one's application form.

Applied Interest Rate
A type of rate, often referred to as Nominal Interest Rate, which is used to work out due interest.

Appraisal
A process of estimating current value (market) of the said property undertaken by an estate agent or a surveyor.

Appraised Value
An estimate of what the property in question is worth in the current market by an estate agent or surveyor.

Appreciation
An increase of what the property is worth following the rise of the property prices as opposed to depreciation.

APR
Abbreviation for Annual Percentage Rate.

Arbitration
A process of resolving disputes arising between to parties as alternative to legal action, conducted by the independent party.

Arrangement Fee
A sum of money payable to the lender either on completion of one's mortgage. Alternatively, this could be added to the loan. It is paid to cover lenders costs associated with administration of the lending process.

Arrears
A payment received after the date due or after the services have been provided. Most salaries are paid in arrears, for example, as first payment is usually received one month after starting employment.

Arrears Fee
A type of fine due for a late payment, see also Late Payment Fee.

Asking Price
The ideal price, the seller is hoping to achieve through the sale of his property.

Asset
Any item, in this instance property, currency, shares, that represent some value that belongs to an individual.

Assignment
A process of transferring the legal right to own and/or use an asset, such as property, lease, mortgage or insurance policy to new legal owner.

ASU
Same as Accident, Sickness and Unemployment Insurance.

Auction
The process of selling one's property through offering the same for the highest (winning) bidder.

Audited Figures
A set of documents such as statements of business account approved by the accountant. A self employed person applying for mortgage, may be required to provide statements of business accounts for the last three years.

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