Jargon Busting Section

Advice
A recommendation about the most suitable mortgage for you made by an authorised and regulated adviser.
Annual statement
A statement from your mortgage lender, sent every year, showing among other things what you've paid and what you still owe.
Approval in principle
A certificate which some lenders will give you that shows the amount they will probably be prepared to lend you. This is not a guarantee, but may be helpful when searching for new property.
APR
Annual Percentage Rate. This shows the overall cost of a loan, taking into account the term, interest rate and other costs.
Authorised firm
A firm that has permission from the FSA to carry out regulated activities.
Buy-to-let mortgage
A loan you take out to buy a property which you intend to rent to tenants.
Capital
The amount you borrow to help buy your home.
Capped mortgage
A mortgage that has a maximum limit on the interest rate you'll have to pay during a special promotional period.
Cashback mortgage
A mortgage that comes with a cash sum (often a percentage of the amount you're borrowing).
CCJ   
County Court Judgment this when a customer fails to pay for goods or services and an award against him will be made by the courts and may prevent you from obtaining credit in the future.
Credit score
A method that some lenders use to decide whether a customer will be eligible for a mortgage or loan with them.
CML
The Council of Mortgage Lenders is a governing body for the majority of lenders in the UK
Deposit
The amount of money that you initially put down to buy a home (not including the mortgage money you're borrowing).
Deeds
The legal document that confirms ownership of a property
Default
When a customer fails to keep up payments on an agreement for goods or services and a default notice is lodged on their credit file this in turn would make it more difficult to obtain credit in the future.
Discounted mortgage
This has a discounted variable rate of interest for a set period, after which the rate will increase to the lenders standard rate.
Early repayment charge
A charge you may have to pay if you break off a mortgage deal - by paying it back early and/or moving to another lender before the end of your tie-in.
Equity
Values remaining in property after any secured loans or Mortgages are paid off.
Fixed rate
An interest rate that is fixed (ie it doesn't move up or down) for a set period of time.
FSA
The Financial Services Authority - the UK's financial services regulator.
Income multiples
The factor by which your earnings are multiplied by lenders to find out how much you can borrow.
Interest
The charge made by lenders when you borrow their money.
Interest rate
The figure that determines how much interest you pay. Usually linked to the Bank of England's rates and can move up or down.
Interest-only mortgage
A mortgage where you only pay the interest charges on the loan each month. This means you are not reducing the loan amount (or capital) itself, and this will need to be repaid in some other way.
Loan-to-value
The percentage of money you want to borrow compared to the cost of the property.
Mortgage
A loan which is secured against your property.
Mortgage Broker/Advisor
A mortgage Broker/Advisor helps you to understand the various mortgage types and deals available to you. They may recommend a mortgage for you or they may provide you with information to enable you to make your own choice.
Register
A list of firms that are regulated by the FSA to carry out financial services in the UK. You can check online to see whether a firm is regulated by the FSA.
Re-mortgaging
The process of changing your mortgage for a different one, without moving home.
Repayment mortgage
A mortgage that pays off both the home loan and the interest at the same time. Once all the payments have been made, the mortgage will be fully repaid.
Stamp duty
A tax which home buyers must pay on properties costing above a government set figure.
Standard variable rate mortgage
A loan at the lender's normal mortgage rate - ie without any discounts or deals.
Secured
A mortgage is a secured loan on your home; this means that if you fail to repay it, your lender may be able to sell your home to get its money back.
Survey
A report on the condition of the property you are planning to buy. There are three types of survey, a basic survey, a homebuyers report and a structural survey.
Tracker mortgage
A mortgage with an interest rate that is usually linked to a particular rate that is set independently from the lender and moves up or down with it.
Term
The length of your mortgage.
Valuation
A brief inspection, for the benefit of your lender, of the home you hope to buy. This is to make sure they are not lending more than the property is worth and that the property is suitable security for the mortgage, but this will not tell you if it is a good or bad buy. For your own peace of mind, you may want your own survey.
Vendor
The seller of the property

Your home may be repossessed if you do not keep up repayments on your mortgage.