Jargon Buster

APR (Annual Percentage Rate)	The annual interest rate of the loan when all costs (fees, HLC, etc) are taken into account as opposed to the mortgage interest rate, which only applies to the loan amount.
Arrangement Fee	A lender's fee for a particular mortgage product.
Basic Survey	As Mortgage Valuation, but with a more in-depth report on the condition of the property.
Booking Fee	See 'Arrangement Fee' as this is the exact same, but tends to be used when applying for a fixed rate mortgage.
Buildings Cover	Insurance to protect the building aspect of the property from flood, fire or accidental damage depending on the policy.
Capital & Interest	Loan repayment type. This is commonly referred to as "Repayment" and is when the monthly mortgage repayments are made up of interest payments and capital repayments, which over the term of the mortgage are designed to repay the loan amount in full at the end of term.
Contents Insurance	Insurance to protect the contents of the property from flood, theft, fire or accidental damage depending on the policy.
Coveyancer	Licensed person who carries out the legal requirements of a property purchase - just as a solicitor would do.
Critical Illness Cover	Policy which pays out a lump sum or monthly benefit if a predefined illness is contracted during the period of the policy.
Decreasing Term Assurance	Life assurance policy where the amount of cover reduces over the period of the policy. Normally used in conjunction with a Capital & Interest mortgage.
Endowment	A policy provided by a Life Assurance company where a portion of the premium is invested for growth and another portion provides life cover over a pre-defined period.
Exit Fee	Term used by lenders for the administration fees they charge when a mortgage is redeemed in full. These increased significantly over the past couple of years, but have been reined back by the regulator.
FSA (Financial Services Authority)	The regulator of banking, investment, pensions, most mortgages and insurance.
Full Structural Survey	A complete inspection of a property by a surveyor and should be considered on older or specialist properties.
Higher Lending Charge (HLC)	This is an insurance policy to protect the interests of the lender when the borrowing exceeds a given percentage of the value of the property and is paid for by the borrower for the lender's benefit.
Interest-Only	Loan repayment type. This is when the monthly mortgage repayments are made up of interest payments only with the capital remaining unpaid. E.g. on a £100,000 interest-only mortgage over 25 years, the £100,000 would remain outstanding and be liable for payment after 25 years.
ISA (Individual Savings Account)	Tax efficient savings & investment wrapper sometimes used to repay the capital element of a mortgage
Level Term Assurance	Life assurance policy where the amount of life cover remains the same through the term of the policy.
LIBOR (London Interbank Offer Rate)	The interest rate at which banks lend each other money on the money markets.
Mortgage Payment Protection Insurance (MPPI)	Insurance to cover the mortgage repayments in the event of illness, incapacity or redundancy. The benefits are paid after normally 30 days and for a period of 12 or 24 months. Some employment types may not be covered.
Mortgage Protection Cover	Another name for 'Decreasing Term Assurance'.
Mortgage Valuation	Valuation carried out by surveyor to give a value of the property and any obvious defects with the property. This is the minimum required by lenders.
Telegraphic Transfer	The system by which the money is transferred to your solicitor/conveyancer to complete the property purchase.
Waiver of Premium	Insurance policy attached to Life and Critical Illness policies that will pay your premiums after a specified period of illness or incapacity until the either the end of the term or you are fit to return to work.

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