APR (Annual Percentage Rate)
The Annual Percentage Rate is an interest calculation which all lenders have to show as well as their own published rate in advertising literature. The APR shows the true cost of the mortgage over its term including all applicable fees and interest.

Arrangement Fee
A fee you pay for arranging a mortgage on a particular mortgage product. These fees are also known as application fees and booking fees.



Buildings Insurance
Insurance cover which protects you against damage to your property and should cover the cost of rebuilding or repairing the structure of the property.

Buildings & Contents Insurance
This is combined insurance which may be cheaper than one policy for buildings and a separate one for contents.

Buy To Let Mortgage
A loan taken out to buy a property as an investment, for the sole purpose of letting. Rental income is received from tenants, which is used to repay the mortgage.

Capital & Interest
Your monthly payments are partly to pay the interest on the amount you borrowed and partly to repay the mortgage debt. This is also known as a repayment mortgage.

Completion
The act of completing your mortgage.

Contents Insurance
Insurance cover for your possessions. This may include cover against loss when items are taken outside the home.

Conveyancing
The legal process of buying and selling a property.

Credit Search
The check the lender makes with a Credit Reference Agency to assist with the decision as to whether or not to provide a mortgage. Information is received as to whether any County Court Judgments or record of unpaid loans, credit card bills have occurred.

Deposit
The amount of money which a buyer must contribute to the property's total purchase price. The minimum amount of deposit is usually 5% or more of the property's purchase price or valuation. However, many mortgage products require a larger deposit to be paid.

Disbursements
The fees your solicitor has to pay for example stamp duty, land registry fees, searches etc.



Early Repayment Charges
Should you pay off all or part of your mortgage (over and above the usual monthly repayments) during an initial period, then the Society may charge an additional fee or interest.  The mortgage product leaflet and the offer of advance will detail these.

Equity
The difference between the value of your property and the amount of any outstanding loans secured against it.

Exchange of Contracts
Once contracts have been exchanged between the buyer and seller showing the price and what fixtures and fittings will be sold. When contracts are exchanged the terms of the property purchased become legally binding for both parties.

Freehold
Where the buildings and land are owned by you. 

Income References
The lender confirms with your employer the amount you earn to assist with the decision making as to whether a mortgage is granted. Accountants are also requested to give confirmation of income for self-employed applicants.

Interest Only
A mortgage where the monthly payments are simply made up of interest. The capital borrowed is paid at the end of the mortgage term using the proceeds of a separate investment vehicle, for example an endowment or personal pension 

Leasehold
Where the property owned by one party is situated on land owned by another party to whom payments have to be made.

Loan To Value (LTV)
The ratio of the sum you wish to borrow against the value of the property.

Mortgage
A loan taking out and secured against a property.

Mortgagee
The lender or institution which provides the funds for the mortgage.

Mortgagor
The borrower taking out the mortgage.

Retention
If there are essential repairs required to be carried out on a property the lender may hold back some mortgage funds until the work has been completed. The retained funds will be released upon completion of the work.

Stamp Duty
A tax you pay on properties which cost over £125,000.

Vendor
The person selling the property.