Glossary of Terms

We have gathered together on this page, a collection of terms most used in the Mortgage, Financial and Property Services Industries.

If you are searching for the meanings of Mortgage, Financial or Property terms, please click on the initial letter below. A list of terms commencing with that letter will be presented and, hopefully, you will find what you want.

If you cannot find explanations for the terms you require or you believe our description to be inaccurate, please submit your request for an addition or correction. If you have a suggested correction, please make it polite.

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A

Advance
The Mortgage Loan
Adverse Credit
This is the term used if the borrower has suffered a poor credit history. This could include previous mortgage or loan arrears, Defaults, CCJs or Bankruptcy
Advice Fee
A fee charged by an intermediary or advisor for locating the most appropriate mortgage for the borrower. (see also Broker's Fee).
Adviser or Advisor
The individual qualified to provide advice on the product or products needed. To advise on certain products, known as regulated products, advisers need to be authorised by the Financial Services Authority. It is normal for persons who have been authorised to provide advise also to have been authorised to 'Arrange'.
Affordability
More and more lenders are moving away from the idea that loan sizes should be calculated as income multiples. Instead, they base their lending decisions on a variety of factors including the amount of disposable income.
Annual Interest or Annual Rest
Interest is calculated on the balance outstanding on a specific date each year. This may be on the anniversary of the commencement date of the mortgage or the lender’s annual accounting date. Payments are accrued to the account throughout the year and any adjustments to interest due are then calculated on the new balance. If the loan is being repaid on a Capital and Interest basis, this is not usually as good as Daily or Monthly interest.
Applied or Nominal Rate
The rate used to calculate the interest due.
APR
Annual Percentage Rate. This is designed to be a way of comparing the cost of credit. It takes into account most of the upfront and ongoing costs involved with taking out a mortgage. Different Lenders work it out in different ways so you can't always rely on it.
Arrangement Fee
This is a fee you pay to your Lender in return for providing you with a mortgage. Usually paid on completion or with application , these fees usually apply when you take out a fixed rate, discount or cashback mortgage.
Arranger
The individual or organisation qualified to place business with a lender or insurance provider. In the majority of cases, this is likely also to have been the advisor, however, a number of organisations exist solely to place business on behalf of advisors and customers. To arrange certain products, known as regulated products, arrangers need to be authorised by the Financial Services Authority.
Arrears
Mortgage payments which have not been paid as requested and have become overdue.
ASU
Accident, Sickness and Unemployment insurance (See also MPPI). This insurance is designed to cover the borrowers mortgage payments in case of accident, sickness or involuntary unemployment.
Activities of Daily Living (ADL)
Criteria used for defining when a person may claim under certain insurance policies eg, long–term care. They include mobility, dressing, eating, continence, toileting and washing and bathing.