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Glossary of Mortgage Terms

Additional Security Fee

An Additional Security Fee (Mortgage Indemnity Guarantee policy) is the fee taken to get an insurance policy that will cover your lender so that if you default on payments, he will not suffer any loss. You have to pay the Additional Security Fee and the premium along with your mortgage advance. Although you are paying the premium, remember that this policy is for the protection of your lender and not for you.

Administration Fee

The administration fee is the amount charged by your lender to start working on the documentation part of your mortgage application. It includes the home valuation fee as well. The administration fee will not be refunded even if your valuation is not done or if your application has been rejected. 

Adverse Credit

Adverse credit occurs when you have a history of bad credit, bankruptcy, CCJ’s, or loan arrears. Adverse credit can also be called as bad credit, poor credit, or it can be said that you have a low credit score.

Agricultural Restriction

An agricultural restriction is a rule which will restrict you from holding a property if your occupation is in any way related to agriculture.

Annual Percentage Rate

The Annual Percentage Rate is the rate at which you borrow money from lender. It includes all the initial fees and ongoing costs that you will pay throughout the mortgage term. As the name suggests, annual percentage rate, or APR, is the cost of a mortgage quoted in a yearly rate. The annual percentage rate is a good way to compare the offers from different lenders based on the annual cost of each loan.

Apportionment

Apportionment, or sharing out, is a facility that allows you to divide the responsibility for utilities, property taxes, etc. with the buyer or the seller of the property when you are either selling or buying the property.

Arrears

Arrears happen when you default on your mortgage payment or any other type of debt payment. If you have arrears on the record of your current mortgage, you will face problems when you want to look at remortgaging or getting a new mortgage.

Arrangement Fee

An arrangement fee is the amount you have to pay your lender to access particular mortgage deals.