Jargon explained

ASU This policy is sometimes called MPPI (mortgage payment protection insurance). ASU is an insurance cover that will pay your monthly mortgage repayments for a time if you were unable to work because of illness, accident or redundancy. Please note that this type of cover does not apply to voluntary redundancy or dismissal due to misconduct, or if your injuries are self-inflicted. 
Actuary An actuary is a  professional that deals with calculations related to pensions, insurance and investments. With regards to a mortgage an actuary will work out the amount payable for life assurance and other insurance policies you may need in connection with your mortgage.
Adjustment On a variable rate mortgage, this is the date on which the interest rate changes which may effect your monthly repayment
Administration / Application Fee This is a charge by the Mortgage Lender to cover costs of processing your mortgage application. The admin fee is also sometimes known as an Application fee. Some mortgages have an Arrangement Fee that is payable on the product you’ve chosen to the lender for arranging the mortgage. The fee can be added to the amount you want to borrow, although if it is added you will pay interest on this additional amount throughout the life of your mortgage and may pay more than the original amount over the mortgage. Details of any fees are always included in a mortgage illustration (KFI). 
Agreement in Principle An agreement in principle is not a formal offer but includes a credit check with a credit reference agency and an assessment of your ability to repay the mortgage requested. Once you have been given an agreement in principle there are still checks which need to be done to validate the information you have given.  On satisfactory completion of all checks and a survey of the property , the lender will then make you a formal offer of loan. The agreement in principle gives an indication to you of the likely outcome of a loan application. 
Adverse Credit This term applies to a borrower or application that has past problems with credit, this includes late mortgage or credit payments, bankruptcy or County Court Judgement (CCJ).  Allow lenders are always cautious about people with past credit problems, there are still many mortgages lenders willing offer mortgages to people with adverse credit.
Arbitration This is the involvement of an independent third party to resolve a dispute between two other parties (rather than resort to legal action).
Amortisation The reduction in the amount of your mortgage during its term as you make regular payments to cover the principal and interest. As such this means you have increasing equity in your property as you reduce the debt secured against it.
Amortisation Term The amount of time to pay off your mortgage loan. Also known as the Mortgage Term
APR Annual percentage rate of the total charge for credit. This is a  standard way  of working out the true interest rate or the true cost of borrowing. By law, the APR has to be shown by all lenders alongside their quoted interest rates for each mortgage term. This is so borrowers can compare between different lenders and their products. A lender's APR also includes not just the interest rate, but also takes into account any additional charges you will have to pay, so is the best way to compare different mortgages and is also considered as a "rate of charge". The is designed to show the true, total cost of borrowing. The calculation assumes that you maintain the mortgage for the full term. 
Applicant The person (s) applying for a mortgage.
Asset  Any form of property owned by a person, this can include cash & currency, stocks and shares and houses
Appreciation This is the increase in the value of a property as a result of changes in market conditions. It is the opposite of Depreciation
Appraised Value The value of a property, as estimated by a surveyor. Before a lender will grant a mortgage on a property, they will require a surveyor to calculate an appraised value.
Arrears If you miss mortgage payments, you will get into arrears. If this happens, the lender may want to ultimately repossess your home so that they can sell it and use the proceeds to repay the mortgage.  Arrears can be calculated in months (i.e. 3 months in arrears) or in pounds (i.e. £2000 in arrears)
Bridging Loan / Finance Bridging finance is often used to help people buy a new home before they have sold their current home. It is often used by people who don’t want to loose out on their "dream home" or to help speed up the purchase process. Bridging finance can be expensive but id often only used for a very short period of time.
Buy to Let This is a special type of mortgage used to buy a property which will then be let out to a third party. This mortgage is used often by property investors who want to buy a property with the long term view of generating income from the rent and also the capital growth.
Bank of England Base Rate (BBR) This is the interest rate set by the Bank of England which is often reported in the news and  which is used by mortgage lenders to set their standard variable rate (SVR). The Bank of England set a rate each month known as the 'Base Rate' is generally viewed as the rate at which all the mortgage lenders can borrow money.  Banks and Building Societies use the Base Rate to set the interest rates they pay on deposits, or charge on debts. The Bank of England Base Rate is officially called the Bank of England repo rate.
Base Rate Tracker If you have a base rate tracker mortgage, the rate of interest you are charged will be set at a fixed percentage above or below the bank of England Base Rate and will follow its rise and fall. By tracking the Bank of England base rate, the repayments on this type of mortgage will rise and fall in line with the base rate and can fluctuate. 
Broker A mortgage broker is a Mortgage  intermediary who advises and recommends you a mortgage. Depending on the level of service they provide, they may charge a fee for their work.
Buildings insurance This is often a requirement by all mortgage lenders as part of the conditions for a mortgage. It should cover the full cost of rebuilding your property from scratch. It can also included accidental damage as well.  Things that are covered under buildings insurance include flood, fire or storm damage.
Building Society The historical mortgage lender and used to be the most popular place to arrange a mortgage. building societies are mutual organisation whose purpose or principal purpose is to provide mortgages and savings accounts to their members (customers).  As a mutual organisation they have no shareholders and do not work in the same way as a bank.
Capped Rate Mortgage A mortgage where a maximum rate of interest is set at the start of the mortgage - a cap. During the capped rate period the interest rate can fall below the capped rate but will never rise above it.  Therefore you can potentially benefit in lower payments if rates fall, however you know what the maximum you will have to be pay as this will be capped. A cap and collar mortgage sets a minimum as well as a maximum rate for this period.
Capital Repayment / Capital & Interest There are 2 ways of repaying a mortgage - capital & interest repayment or interest only. With a capital and interest repayment mortgage, the capital and interest are both paid off during the term of the mortgage. At the end of the term the mortgage will have been repaid in full and the balance reduces over the term. 
Cashback With a cash back mortgage, you get a percentage of the loan back on completion. - say 5% - as a lump sum to spend how you wish. typically this money is used to help with moving costs and purchase of items for the new home. Its is often popular with first time buyers who may need to buy furniture etc. Other mortgages such as fixed or discounted can also offer a cashback.
Charge A charge on a property is an interest held by a mortgage lender of secured lender on your property. By having a charge on the property their interest in the property is noted 
CAT Mortgage (Charges Access Terms) This mortgage complies with specific guidelines laid down by the government which aims to make it easy for borrowers to understand charges associated with taking a mortgage. CAT is short for Charges, Access and Terms. 
Contents insurance Insurance against accidental damage or theft of all moveable contents, including furniture. This protects your property in the event of burglary or fire damage to your items. Typical items covered include furniture, appliances and personal items. You can get different levels of cover depending on how much you can pay per month for the premium.
Completion This is when your mortgage becomes active and you "Complete" the purchase/remortgage of your home. The completion date is the date on which your solicitor forwards the money from your lender to the solicitor of the seller. It is the date that you become the legal owner of your new property.
County Court Judgment (CCJ) This is a ruling by a county court for any bad debts you may have. a CCJ can affect your ability to get a mortgage and effect the costs of getting a mortgage. a CCJ will be evident on any credit checks carried out against  you.
Conveyancing This is what a solicitor does during the house buying process.  It is the legal transfer of the deeds and rights for a property and is usually managed by a solicitor or a licensed conveyance. It includes negotiating and agreeing the contract for buying and selling your home.
Credit Scoring Lenders often use a system called credit scoring to help them decide whether to lend to you. They may use either Experian or Equifax who hold data about your past credit records. They ask questions about you and your finances and score your answers. Your score will determine what lenders will or will not offer you a mortgage
Current Account Mortgage A current account (or One mortgage is a mortgage that combines a mortgage with a current account. This also a type of Off Set mortgage in that the money in the current account off sets against the balance outstanding on your mortgage. The aim is to reduce the interest payments. There are calculators which can help illustrate the savings of using a current account mortgage
Daily interest This is the most popular way of calculating interest owed on a mortgage and benefits the borrower because any payments made make an instant different to the interest charged.  If you have a mortgage which calculates interest monthly or annually you will pay more interest over the term of your mortgage than you would with daily interest. 
Debt Consolidation By consolidating your debts, you are bringing them all together into one payment and one debt. For example, people often remortgage and raise money against there house to pay off loans and credit cards. You should think very carefully before doing this and should speak with your financial advisers about the long term effects of doing this.
Decreasing Term Assurance A life assurance policy is designed to repay your mortgage if you die during the mortgage term so your family can continue to live in the home and will not be effected by the loss of income. The amount repaid on this policy reduces over time as  the level of cover decreases. It decreases as your mortgage balance decreases. Your mortgage balance will decrease over the term as you continue to make the monthly repayments. Mortgage life assurance is designed specifically to protect a repayment (capital and interest) mortgage. The plan has no cash-in value at any time.
Deeds Legal documents that show who owns a property or piece of land. The legal owner of a property will have "the deeds" to it.
Deposit A deposit is either savings or inheritance money used as a down-payment (deposit) on a house. Many lenders prefer lenders with a deposit and as such will often offer better deals. People with a small or no deposit can still get a mortgage but they are restricted in which lender will grant them a mortgage and will not always be able to get the most competitive rates.
Direct Debit A Direct Debit is an instruction from a customer to their bank or building society to make regular payments direct from their account. This is a popular way to repay your mortgage each month and ensures you will not miss any payments.
Disbursements Your solicitor will charge you for disbursements which are the various costs for carrying out the legal work in relation to buying or remortgaging your home.
Discount Rate A discounted rate is "discounted" from the lenders Standard Variable Rate for an agreed period from the start of the mortgage. The discount offered helps to reduce monthly mortgage repayments often for the first two or three years of the loan period. If you have a discounted rate mortgage, for a fixed period of time you will be charged an interest rate that is lower than your lender's standard variable rate (SVR) but which will rise or fall in line with it. Therefore your monthly repayment can go up and down (is variable) however it will be cheaper than the lenders SVR.
Early Repayment Charge Almost all mortgages now have some form of early repayment charge. It is used to cover costs in the event of a loan being repaid before the due date. Typically an early repayment charge will remain enforce during a special rate period (i.e. fixed, discounted, tracker rate period). The charge can be levied on the customer in the event the amount of the loan is repaid in full or in part.
Equity This is the amount your house is worth on the open market, minus your outstanding mortgage. For example, a house valued at £100,000 with a mortgage of £55,000 = £45,000 equity.  If the value of your home is less than your mortgage, you will have negative equity  which can happen if you borrow a large amount against your house and then in turn your house value drops.
Equity Release A way of releasing the equity in your home into cash. This done by borrowing a higher amount of the value of your property
Exchange of Contracts At this point, the house buying process becomes a legally binding agreement. Although the buyer can still pull out of the purchase at this point, the seller will have legs ground to sue for breech of contract. The buyer usually pays a deposit at this point and the date of completion is agreed. This is the stage in England and Wales at which buyer and seller have legally committed themselves to the purchase deal.
First Time Buyer A customer who is taking out a mortgage for the first time and buying their first home.
Fixed Rate A mortgage rate where the interest rate is agreed at the outset and will not change during the term of the fixed rate. This is where the most competitive mortgage deals and fixed rates deals are changing all the time. This is popular with first time buyers and people who want to budget their monthly payments and know exactly what they will be paying for a set period.  A fixed rate means that no matter what happens to interest rates, your mortgage interest rate stays the same until an agreed date. When the fixed rate ends, your mortgage will change to a different interest rate and this typically be your lenders Standard Variable Rate which means your payments will usually be higher and they can also fluctuate as well. 
Flexible Mortgage If you have a flexible mortgage you will have additional features on top of a standard mortgage. Therefore you will be able to make overpayments or underpayments and also take payment holidays. Typically flexible mortgages are also Off Set mortgages or Current Account mortgages which provide more flexibility and the ability to repay the mortgage quicker.
Freehold This is the legal title that gives you absolute ownership of the land your property is on and is the highest form of ownership in England and Wales.
Financial Services Authority (FSA) The regulatory authority for the UK financial services industry. The FSA has taken over the regulation of mortgages and all lenders and mortgage intermediaries must be authorised and regulated by the FSA.
Further Advance This secured loan to release equity in your house for any purpose. A situation whereby the lender makes available another loan and under which both loans are included within first charge on the property therefore there is no need for a second charge. 
Full structural Survey A full structural survey is the highest form of survey in terms of completeness when assessing a property. A surveyor will  look at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden. This is the most expensive type of survey however does carry a degree of claim over the person or company carrying out the survey .
Guarantor A guarantor is someone who guarantees to pay your mortgage if you can't or won't for any reason. This is typically a parent or relative and may be required by a lender for a first time buyer or someone with poor credit. 
Gazundering A tactic whereby the buyer offers less than the agreed price just before exchange of contracts which can cause distribution to all parties within a house selling chain. As such the seller may accept the lower offer. This act is not illegal but not common practice.
Gazumping When a seller pulls out of a sale after accepting a higher offer. If the seller receives a higher offer for a property they are within there rights to sell it to the higher bidder. This can happen after one potential buyer has paid for a surveyor already. It is not illegal to do this however it is not common practice.
Higher Lending Charge A Higher Lending Charge is charged by a lender who is lending a high proportion of the value of a property. This is charged as the mortgage is deemed to be a higher risk. This charge may either be added to the loan or deducted from the advance on completion. 
Home Buyers Report This is an intermediate-level survey which fits in-between a basic valuation and a full buildings survey. The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but it does not involve in-depth investigation or the testing of water, drainage or heating systems like a full building survey would offer.
Initial Disclosure Document (IDD) This is sometimes referred to as Terms of Business and details the level of service you will get from a mortgage adviser or lender. It should include information about the scope and nature of the services offered and also any charges.
Interest Charges The charges that banks make on a mortgage and is calculated as a percentage of the loan annually.  The higher the interest rate the mort you have to pay in interest alone.
Income Multiplier The formula used by lenders to calculate how much a prospective borrower can borrow. Depending on the lender will determine how much you can borrow. Income multipliers are now used in conjunction with affordability calculators as well to determine how much a lender will offer.
Interest Only With an interest only mortgage the balance of the mortgage stays the same throughout the mortgage term and you simply pay the interest charged on the loan. Therefore at the end of the mortgage the original balance will still be outstanding. Typically you will also invest money into a repayment vehicle as well such as an endowment or an ISA or unit trust etc. At the end of the term, the proceeds from the investment vehicle should be able to repay the mortgage balance. with an interest only mortgage, the monthly repayments are lower than that of a capital and interest mortgage.
Independent financial adviser (IFA) IFAs offer impartial advice on all aspects of your personal finances and help you find the right products or services (such as mortgages, insurance, savings plans and pensions). The page on getting advice has more on how to find an IFA and how they can help you.
Independent savings account (ISA) A tax efficient savings plan. You may pay into an ISA and you will not have to pay tax on the interest you acquire. There are limits to how much you can pay into an ISA each year. There are two main types of ISA, cash or equities. Both are suitable methods to repay an interest only mortgage
Investment Vehicle An investment vehicle runs along side an interest only mortgage to repay the mortgage at the end of the term. There are many types, the most well known being an ISA or endowment.
Inter-generation Mortgage This is a new kind of Mortgage whereby the debt is passed onto child and therefore does not need to be repaid when you die. Instead, the property and the loan are left to your heirs (for example, your children), who can choose to continue making the mortgage payments, or can sell the home to pay off the debt. 
Interest As well as paying back the capital you borrow, you will also have to pay interest on the loan. Interest is the main charge which a lender will impose on a mortgage during the term and the higher the interest rate, means the higher the bank is charging you for having the loan.
Joint Mortgage A joint mortgage is a mortgage in the name of two people. Both incomes are assessed and typically you jointly borrow more money as the lenders deems you less of a risk. Both people are jointly and severally liable for the mortgage.
Joint Tenants People who have a joint mortgage a typically joint tenants. As such when one dies, the property passes automatically to the other. The alternative is Tenancy in Common.
Key Facts Illustration (FFI) This illustration spells out in plain English all the details about a new mortgage. It helps you compare the costs and features of different mortgages from one or more lenders. All advisers will issue you with a KFI which should be in a standard format.
Land registry  A government organisation that holds records of all registered properties in England and Wales. Your details will be registered with them when you buy a property.
Leasehold A system used mainly in England where you would own the property for a set period before handing back ownership to the freeholder. Typically leases are held for may years. Essentially you own the property but not the land it sits on. A leasehold property will typically have an annual ground rent.
Letting Many people will let out a property either as an investment or if they plan to leave their property empty for some time (i.e. overseas travel)
Landlords Reference A reference given by a previous landlord, typically this is need by a first time buyer or by someone who has been in rented accommodation.
Level Term Assurance A life assurance policy which will repay your mortgage if you die during the term. The amount of cover remains constant during the mortgage term as with an interest only mortgage the balance does not decrease but remains outstanding. As such this policy is used in conjunction with an interest only mortgage.
Lifetime Mortgage A type of equity release product for the over 60s, which allows you to release money by borrowing against the value of your home assuming it has suitable equity in it. There are no monthly repayments to pay and the interest is rolled up. Therefore when the owner goes into a care home or dies the loan and the whole amount is repaid, usually from the sale of the house. 
Loan to Value (LTV) Loan to Value (LTV) refers to the amount of the mortgage compared to the value of the house. If your home is valued at £100,000 and you wish to borrow £60,000 as a mortgage, then your LTV equals %60. 
Local Authority Search A search of the local area to highlight anything that may impact on the property or surrounding area, e.g. planned road building, planning permissions. This done typically by a solicitor as part of their work.
Mortgage The legal process of securing a loan against a property.
Mortgage rescue scheme If you are having problems paying your mortgage, your lender may offer you a mortgage rescue scheme to help. Essentially the lender will buy the home back from you and allow you to remain in the house and pay rent as a tenant. Many private companies now offer this service.
Mortgage Term The length of time over which the mortgage is to be repaid. Typically this is 25 years, however now you can get longer term mortgages to help with affordability.
Mortgagor The borrower 
Mortgagee The Lender
Negative Equity Where your mortgage is more than your house is worth. I.e.. you have a mortgage of £100,000 and your property is only worth £90,000. This can occur if your house suddenly falls in value of if you borrow more than the property is worth.
NHBC National House Building Council. A warranty providing cover against major structural defects for 10 years.
Ombudsman A service which helps borrowers with advice and can also help provide compensation if a borrower feels they have been mistreated by a lender or adviser. They operate a compensation scheme which is funded by all lenders.
Payment Break / Holiday An option with flexible mortgages to take a break from your monthly repayment.
Pension Plan Mortgage A type of interest only mortgage where the loan is designed to be repaid by a lump sum from a pension plan when you retire. Currently the pension fund on retirement must by four times the size of the mortgage value to be able to do this and therefore large contributions to a pension plan will be needed during the mortgage. There is an element of risk to this process.
private Sale This is a house sale without the use of an estate agent.
Portable  A portable mortgage can be kept and when moving home. Once the lender agrees to this, the mortgage is simply removed from one property and placed on the other house.
Re-mortgaging More common than every now-a-days as people search for better deals. You simply change who you have your mortgage with. Usually there are costs to doing this however they are offset against the benefits of a lower rate. This done often to raise additional funds.
Retention A lender may impose a retention if they consider a property to need urgent repairs. The retention is when the lender holds back some of the funds for the mortgage until the work is done, at which point the funds are then released.
Right-to-Buy Mortgages This is a government scheme to allow council tenants the right to buy their home which they have been renting. Discounts are available dependant on the length on time you have been a tenant.
Repossession If you do not keep up the repayments on the mortgage, the lender may repossess your home and sell it to repay the mortgage.
Sealing Fee A charge made for the administration work involved in closing your mortgage account. This is paid at the end of the mortgage term.
Self Certification A mortgage which does not require evidence of a persons income, they can "self certify" there income. This is useful for people who have difficulty proving their income. It must be noted that claiming to earn more money than you actually do is an offence and is classed as mortgage fraud.
Stamp Duty A charge by the government on house purchases over £125,000. You currently have to pay Stamp Duty Land Tax if you are moving home and your new home costs more than £125,000. 
Standard variable rate (SVR) This is the basic rate of interest charged by your lender. All lenders have a SVR which will fluctuate with the Bank of England Base Rate. typically all special rate deals that end, will fall onto the SVR. 
Surveyor Building expert who surveys the property and calculates its market value
Tenants People living in a property who are paying rent and therefore do not own the property
Tracker Mortgage A Tracker mortgage follows movements in the base rate set by the Bank of England. Typically it will track for 2,3 or 5 years either a above or below the Base Rate. The repayments therefore can fluctuate from month to month however you will instantly benefit it rates start to fall. 
Transfer  of Equity Adding or removing a party to / from a mortgage.
Under Offer A term applied during the house purchase process for which the seller has provisionally accepted the buyer's offer. At this stage it is not legally binding
Valuation An independent assessment of the value of a property carried out by an approved surveyor.  A valuation isn't the same as a survey. A lender will always require a valuation but a more detailed survey may also be required if the valuer recommends it. 
vendor The seller of a property or piece of land.
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