Glossary
Additional Security Fee
An up-front fee paid to the lender to protect them against the borrower defaulting on the loan. Usually charged on mortgages over 75% of the house value. Also known as MIG, indemnity guarantee premium and mortgage indemnity premium.
Actuary
A professional that deals with calculations related to pensions, insurance and investments. In relation to your mortgage, an actuary will calculate the amounts payable for life assurance and other insurance policies you may need.
Agreement in Principle
A lender agrees to lend mortgage monies conditional upon the verification of a borrower’s details. An agreement in principal is therefore obtained before formal underwriting commences.
Annual Percentage Rate (APR)
The APR is a compound interest rate figure used to compare different mortgages. Defined by law, it includes repayments on the loan plus any mortgage related fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing over the entire term and should appear on all mortgage illustrations.
Appraised Value
The value of a property, as estimated by a surveyor.
Appreciation
The increase in the value of a property as a result of changes in market conditions.
Arrangement Fee
This is a charge levied by the lender to cover the costs of administering and reserving the funds for certain types of mortgage. May be paid separately or added to the loan amount.
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