Arranging a mortgage and moving home can be a confusing experience. You"ll need to get to grips with the latest mortgage deals & insurance products. The jargon that many lenders, solicitors and estate agents take for granted, may make you even more confused. Here is a guide to some of the jargon used.

Advance

The Mortgage loan

Appointed Representative

Is an adviser, company or organization who is appointed by a company or organization to provide advice on the products provided by that company or organization.

APR

Annual Percentage Rate. This is meant to be a way of comparing credit. It takes into account most of

Arrangement Fee

A fee you pay to the lender in return for a mortgage deal. This deal could be fixed, discounted or cashback. The fees are known as the: Application Fee / Booking Fee / Completion Fee.

ASU Insurance

This covers accident, sickness and unemployment. It provides a monthly payment if you cannot work for an extended period due to an accident, sickness or unemployment.

BBA

British Bankers Association. This is the trade organization of the banks.

BSA

Building Societies' Association. This is the trade organization of the building societies.

Buildings Insurance

This covers the cost of rebuilding or repairing the structure of the property. Lenders insist you have enough buildings insurance before they give you a mortgage. With leasehold properties, it is the freeholder's responsibility to arrange buildings insurance, although the freeholder will usually pass on the charges to the leaseholder.

Buildings and Contents Insurance

This is combined insurance, which may be cheaper than one policy for buildings and another policy for contents insurance.

Bridging Loan

A temporary loan which enables you to complete the purchase of a new home if you have to do this before completing the sale of your existing house.

Capital and Interest

Your monthly payments are partly to pay the interest on the amount you borrowed and partly to repay the outstanding mortgage. Also known as a repayment mortgage.

Capped Rate

An interest rate charged for a set period of months or years which can go up and down with the variable rate, but there is a maximum (capped) interest rate which cannot go above.

Cashback

A payment you receive when you take out a mortgage. It may be a fixed amount, or a percentage of the amount of the mortgage.

CAT Marks/Standards

Standing for charges, access and terms, CAT-marked mortgages must comply with benchmarks laid down by the Government. Different CAT marks apply for (discounted) variable rate and fixed or capped rate mortgages. The Government stresses that a CAT mark doesn't mean a mortgage deal is officially endorsed and for many people non-CAT-marked deals will be a better option.

CCJ

County Court Judgment. A decision reached in the County Court which can be for not paying debts. If you pay off the debt, the CCJ is satisfied and a note is put on your records to say this.

CML

Council of Mortgage Lenders. Building societies and most banks and other lenders are members of this trade organization.

Completion

When the sale and purchase of the property are finalized, and you become the owner of the house or flat.

Conclusion of Missives

The point at which buyer and seller are legally bound to the transaction.

Contents Insurance

Insurance cover for your possessions. This may include cover against loss or damage away from the home.

Contracts

The legal documents under which you and the person selling the property agree to buy and sell the property.

Conveyancing

The legal process involved in buying and selling property.

Credit Scoring

A lender's way of assessing whether you are a good risk to lend a mortgage to.

Credit Search

A check the lender makes with a specialist company to find out whether you have any County Court Judgments or a record of not paying loans, credit-card bills and so on.

Critical Illness

Insurance that generally pays out a lump sum if you are diagnosed with a life-threatening illness or disease.

Decreasing Term Assurance

Life assurance that pays out an amount if you die during an agreement period or the term of the policy. The amount of cover reduces each year. So, this makes it ideal to cover repayment mortgages where the amount you owe the lender reduces each year. Decreasing term assurance is usually cheaper than level term assurance.

Deposit

The amount of money you put towards buying a property.

Direct Lender

A lender that arranges mortgages over the phone, through the post, or even on the internet.

Disbursement

A solicitor's expenses - for example, for stamp duty, HM Land Registry fees, searches, faxes and so on.

Discount Term

The time that a discounted rate applies to a variable rate mortgage. This term may be for a guaranteed number of months or years, or it could be until a set date in the future.

Discounted Rate

A guaranteed reduction in the standard variable mortgage rate. This often lasts for an agreed period.

Early Repayment Charges

A fee charged by the lender if you pay off all or part of your mortgage before an agreed date or you move the loan to another lender. These charges usually apply on fixed, discounted, or cashback mortgages.

Endowment

A life assurance policy that is designed to produce a lump sum to pay off an interest-only mortgage. There are different types of endowments, for example, 'with-profits', 'unit-linked' and 'unitized with-profits'.

Equity

The amount of value in a property that isn't covered by a mortgage - simply take the amount of the mortgage from the valuation to work out the equity.

Estate Agency Fees

The amount the estate agent charges the person selling the property. This is usually worked out as a percentage of the sale price, and may be negotiable. On a 2% fee, the estate agent selling the property for £200,000, would receive £4,000.

Exchange of Contracts

The point where you and the person selling the property sign and swap identical contracts that show the price and what fixtures and fittings are being sold, as well as a date when everything will be finalized. When you exchange contracts the deal becomes legally binding, and if you or the seller pull out before completion, you or they will have to pay compensation to the other side.

Extra Cover or Accidental Cover

This insurance against damage to the structure of you property and its contents - for instance, putting your foot through the ceiling or spilling paint on the carpet.

Fixed Rate

The interest charged on the mortgage is for a set amount for an agreed period of months or years.

Fixtures

Any item that is attached to a property, and so is legally part of the property.

Flexible Mortgage

A type of mortgage where you can make extra payments and even underpayments without paying a charge or penalty.

FPC

Financial Planning Certificate. These are professional qualifications for financial advisors. There are FPC Levels I, II, III and advanced level AFPC.

Freehold

This is when you own the property and the land it is on.

Freeholder

Someone who owns the freehold of the property.

Gazumping

This is when the person selling the property accepts an offer from a potential buyer, and then accepts a new, higher offer from another buyer before exchange of contracts.

Gazundering

This is when the person selling the property accepts an offer, and then the buyer puts in a new, lower offer just before exchange of contracts.

Ground Rent

A fee that a leaseholder has to pay the freeholder every year.

Guaranteed Death Benefit

On certain policies, there is guarantee that the company will pay out a certain amount when you die.

High Lending Charge

This is insurance that covers the lender in case you property is repossessed and the lender cannot get back its money. (The lender may add the HLC, which usually applies on high LTV mortgages, to the mortgage). This is also known as MIG (Mortgage Indemnity Guarantee).

HM Land Registry

The official organization that keeps records of properties in England and Wales. Transfer of ownership has to be registered with the HM Land Registry.

Homebuyer's Report

This is when a professional surveyor checks the structural state of a property. This is more detailed than a valuation but less detailed than the structural survey. The report is optional and you pay the bill, but the report should pick up possible problems and may give you the chance to negotiate a lower price. You have more grounds to sue or get compensation from a surveyor for a poor report than you would from a simple valuation.

IFAs

Independent Financial Advisors. These advisers can give you information on and recommend investment products (endowments, pensions, PEPs) from the whole range of life assurance and investment companies.

Income Multipliers or Multiples

The size of mortgage that lenders will offer will often be worked out by multiplying your income each year by a set figure. If you are the only person taking out the mortgage, the usual maximum income multiple is three times your yearly income. So someone earning £15,000 could borrow three times this amount, or £45,000. If you are taking out the mortgage with someone else, the multipliers might be three times the main income plus one times the second income. Or it could be two and a half times the two incomes added together. Lenders may consider including all or part of any regular bonuses or commission you receive as your income.

Income Protection Insurance

This covers accident, sickness and unemployment. It provides a monthly payment if you cannot work for an extended period due to an accident, sickness or unemployment.

Income References

This is confirmation from your employer that you earn the amount you claim in your mortgage application. Accountants may also give confirmation of income if you are self-employed.

Interest-only

Your monthly payments to your lender are simply made up of interest. You do not pay off any of the mortgage during the term of the mortgage. You pay off the mortgage finally using the proceeds of a separate investment plan for example, an endowment, personal pension or PEP and so on.

IPT

Insurance Premium Tax. A tax on all UK general insurance. This is currently charged at 4% of the premium when you buy it from an insurance company or an insurance broker (but the Government can change this rate).

ISA

Individual Savings Account. This is a tax efficient way to own shares, with trusts and life assurance, as well as savings. Depending on the lender, you may use an ISA to repay an interest-only mortgage.

Leasehold

This is when you own the property for a set number of years, after which it goes back to the freeholder. Most flats in England are leasehold, and although most lenders will lend on leasehold properties, they will demand that there is a number of years left on the lease before making a loan (this could be 60 years, but will depend on the lender).

Leaseholder

Someone who owns a leasehold property.

Lessee

A person to whom a lease is granted.

Lessor

Someone who grants a lease.

Level Term Assurance

Life assurance which pays out a lump sum amount if you die during the term. The amount of cover stays the same throughout the term, which makes the cover suitable for interest-only loans because the amount you owe on the mortgage stays the same until the end of the mortgage.

Licensed Conveyancer

An alternative to solicitors, these people specialize in the legal side of buying and selling property.

Loyalty Bonus

These are special schemes if you already have a mortgage, that may provide reduced interest rates or fees, and even services like removals.

LTV

Loan to value. This is the size of the mortgage as a percentage of the value of the property or the price you are paying for the property. A £45,000 mortgage on a house valued at £50,000 would mean an LTV of 90%.

Mortgage

A loan to buy a home where you put the property as security against you paying back the loan.

Mortgagee

The company or organization which lends you the money under a mortgage.

Mortgagor

The person taking out the mortgage.

MRP

Mortgage Repayment Protection. This insurance you take through the lender when you take out a loan. This will pay an agreed monthly payment if you cannot work because of an accident, sickness or unemployment. This amount should cover your mortgage repayments.

Multiple Agency

A number of estate agents agree to try to sell the property.

Mutuals

Organizations owned by and for the benefit of their members (savers and borrowers), with no outside shareholders. Building societies are mutuals, and so are some insurance and investment companies.

Negative Equity

This is where the money you owe on a mortgage is greater than the value of the property. For example, if you had a £60,000 mortgage on a property valued at £50,000, you would have £10,000 negative equity.

New for old

This is insurance cover which will pay the full cost of replacing damaged or lost property with a similar, new item.

No-claims Bonus

This is similar to motor insurance. You will be given a discount on buildings and contents insurance if you haven't made a claim for a number of years.

Non-Status

This means the lender does not need employment or income references from you. This type of loan is often offered to self-employed people.

On Risk

This is when your insurance cover begins. This may be before you have paid a premium.

Percentage Advance

The size of the mortgage worked out as a percentage of the price you are paying for the property or valuation. (If your property was valued at £80,000, a £60,000 mortgage would be a 75% advance).

Personal Pension

This is a structured personal savings and investment plan to provide for your financial needs after you retire. You can use some or all of the TAX FREE CASH Lump Sum from a personal pension to pay off an interest-only mortgage. You will need to arrange life assurance separately.

PHI

Permanent health insurance. This pays a regular monthly amount until you retire or return to work if you cannot work because of illness or an accident.

Policy Excess

The amount you will have to pay when you make a claim. For example, this may be the first £50 of a £500 claim for damage caused by a storm.

Policy Schedule

This gives policy details of how much cover you have (the sum insured), the discount you qualify for (if any), and the premiums you have to pay. With some policies you may get a new schedule when you renew or whenever you want to change your policy.

Possession

The lenders' term for repossessing your property.

Private Medical Insurance

This simply pays the cost for private medical or hospital treatment.

Purchaser

The buyer of the property.

Rebuilding Cost

This is the recommended amount from your property valuation that you should take out buildings insurance cover for. This may be higher or lower than the market value of your property.

Remittance Fee

A charge made by the lender for sending the mortgage funds to your solicitor when the purchase is just about to be completed.

Remortgage

A new mortgage although you are not moving home.

Removal Expense

The cost of hiring a removal firm. This may depend on the total amount and size of your possessions, the distance travelled, the number of stairs and so on.

Repayment

Your monthly payments are partly to pay the interest on the amount you borrowed and partly to repay the outstanding mortgage. Also known as a capital and interest mortgage.

Replacement Value

This is the cost of buying the same or similar items as new if you have to replace them in the event of a claim.

Sealing Fee

A charge made by lenders when you repay the mortgage.

Searches

Checks carried out during the conveyancing. These checks are made with local authorities and other official organizations to check planning proposals and other matters that may affect the value of the property, and if it can be sold in the future.

Self-certified

You confirm how much you earn, and the lender does not need any references.

Settlement

In Scotland, this is the same as completion.

Sole Agent

A single estate agent agrees to sell the property.

Solicitor

The person who deals with the conveyancing.

Stamp Duty

A tax you pay on properties which cost over £120,000. This is charged as follows;

• Property value 120,001 -250k stamp duty = 1%
• Property value 250k- 500k stamp duty = 3%
• Property value 500k+ stamp duty = 4%
So a property costing £67,500 would have stamp duty of £675.

Structural Survey

This is the most wide-ranging check of the outside and inside of a property. This is carried out by a professional surveyor, and it should pick up all but the most hidden faults. The structural survey is optional and you must pay the bill, but it provides the greatest protection for the potential buyer in terms of the information it provides. It also gives you cover against negligence by the surveyor.

Sum Assured

How much the life assurance or investment company guarantees to pay you, if you have an endowment policy and you die. This figure may be less than the mortgage amount unless the policy is specifically designed to match the mortgage amount.

SVR

Standard variable rate. The interest rate the lender charges goes up and down, with your interest payments changing accordingly.

Tie-in Period

As a condition of a special mortgage deal (for example discount or fixed rate), you may have to agree to stay with the lender for a period of months or years after the deal has ended. If you move your mortgage elsewhere during this period, you may have to pay an early repayment charge.

Term

The period of years over which you take the mortgage and when you have to repay it. Most new mortgages are taken on a 25 year term.

Third Party Buildings Insurance

A charge a lender may make if you decide to take buildings insurance from someone other than the lender. A typical charge is around £35.

Title Deeds

Documents to show proof of who owns the freehold and leasehold property.

Total Amount Payable (TAP)

The total cost of repaying a mortgage over the loan period, including the initial amount borrowed and interest.

Transfer Deed

A document that, once you sign it, actually transfers the ownership of the property to you.

Unit Trust

A popular type of stock market-linked investment that you may use to repay an interest-only mortgage.

Unit-linked Endowment

Your monthly premiums are used to buy units in a fund or funds run by professional managers. Like unit trusts, the price of these units can go up and down, so the value of the endowment can consistantly change.

Unitised With-profits Endowments

A mixture of the unit-linked and with-profits endowments. Like the unit-linked endowment your monthly premiums are used to buy units in a fund, or funds. Unlike the unit-linked endowment, the value of the units cannot fall, once an increase has been made.

Valuation

A simple check of the property in order to find out how much it is worth and whether it is suitable to lend a mortgage on. This is carried out by a professional surveyor for the lender. You usually pay the bill and will get a copy of the report.

Variable Rate

The interest rate the lender charges goes up and down, with your interest payments changing accordingly.

Vendor

The person selling the property.

With-Profits Endowment

Your monthly premiums are pooled together and invested for you by a life insurance company. The policy will have a basic sum assured which bonuses are added to, to build up a cash sum. This should be enough at the end of the term to repay the mortgage.