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Property advice | Mortgage guide | Mortgage glossary

Mortgage guide: Mortgage glossary

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accident, sickness and unemployment insurance (ASU)
- Insurance cover arranged by the borrower to protect against inability to meet mortgage payments.

This cover should be more accurately described as accident, sickness and redundancy insurance as unemployment cover is generally seriously restricted to cover only events that are entirely beyond the control of the insured person. Typical exclusions include dismissal following professional misconduct and any act of voluntary redundancy. The accident and sickness cover will also be subject to major restrictions such as any act of self-injury or any injury related to the use of alcohol or drugs.

- a chartered or certified accountant.

accountant's letter
- a letter of income confirmation provided by an accountant (normally chartered or certified).

Some lenders may accept an accountant's letter in lieu of audited accounts. Such confirmation is more likely to be accepted if the loan-to-value ratio is below a certain level and it is normally used only for the self employed or controlling directors.

added to loan
- a reference to the additional costs associated with arranging a mortgage such as Higher Lending Charge or arrangement fees, which can be incorporated into the amount you borrow.

Fees that may be added vary by lender. Care should be exercised when the sum of the loan and any costs added to the loan may cause the total advance to exceed a given loan-to-value . In certain cases additional conditions may apply.

additional security
- When lending exceeds a certain loan-to-value lenders may require additional security.

The simplest form of additional security is a Higher Lending Charge. Alternatively lenders may accept other security such as cash or shares being deposited with them or a charge over another property.

administration charge
- see also valuation fee. Some lenders will reserve a proportion of the fee charged for the valuation to cover their own costs. This element of the valuation fee may not be refunded should an application not proceed even if the valuation has not taken place.

agricultural tie
- restriction placed on certain rural properties which requires that the land adjoining a residence be actively used for farming.

annual percentage rate (APR)
- a definition intended to identify the true cost of borrowing and to provide the consumer with a method of comparing the true costs of different types of loan.

Mortgage loans were originally excluded from a requirement to quote an APR and was designed more to reflect the cost of different types of hire-purchase contracts which, at the time the legislation was drafted, were frequently quoted on flat and fixed basis giving headline rates which were often half the APR. It is a legal requirement that a true APR figure be provided with any loan illustration.

annunity mortgage
- alternative term for a capital & interest repayment mortgage.

- anyone applying for a mortgage.

applicant type
- will indicate whether the applicant is a first time buyer or self-employed, for example.

arrangement fee
- fee charged by a lender for setting up the loan. Normally payable upon completion but may sometimes be added to the loan.

- mortgage payments that have not been made by the due date in accordance with the mortgage deed.

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