| Accident, sickness and unemployment insurance |
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| The policy pays a percentage of the usual monthly mortgage payment including any insurance (occasionally an element of extra cover is allowed for household bills) if the borrower cannot work because of accident/sickness or unemployment/redundancy. Payments are made for limited periods of time - 6, 12 or 24 months or until the borrower returns to work. N.B. The following would preclude the payment of benefit: voluntary redundancy, summary dismissal for misconduct (the sack), self injury and injury arising from the misuse of alcohol or drugs. |
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| Added to loan |
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| This phrase relates to the costs borrowers face when arranging a mortgage. Often these costs are added to the mortgage amount being borrowed hence the term. The costs may include items such as mortgage indemnity fees and/or arrangement fees and/or administration fees as examples. |
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| Additional security fee |
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| This is required when the mortgage exceeds a certain percentage of the value of the property (usually 75%). The form of additional security used is normally a Mortgage Indemnity Guarantee. Occasionally the lender may require a parent to be a guarantor or for other security such as shares or insurance policies to be pledged. |
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| Administration fee |
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| Some lenders charge this fee to cover their costs of administration and sourcing funds. This fee is not refundable if the mortgage application does not proceed. The administration fee may form part of the valuation fee and this part will not be refunded by the lender if the valuation does not proceed. |
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| Adverse credit |
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| This is a term used to describe credit problems the borrower may have suffered in the past. Such problems will encompass County Court Judgements and arrears on loans. |
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| Annual percentage rate (APR) |
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| This is a legal definition which is used to show what the cost of borrowing actually is. As it is a standard definition it enables a potential borrower to compare the costs of various types of mortgage. Every mortgage quotation must show an APR figure. |
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| Annuity mortgage |
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| A term used in other countries to describe a Capital and Interest repayment mortgage. |
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| Applicant |
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| Someone who applies for a mortgage. |
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| APR |
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| see annual percentage rate. |
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| Arrangement fee |
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| Whilst some lenders charge an administration fee, others may charge arrangement fee. This fee is charged to cover administration and primarily reserving the funds for fixed rate and/or discounted rate mortgages. It may be paid separately, added to the mortgage or, in rarer cases, deducted from the mortgage loan the lender is prepared to advance. |
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| Arrears |
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| When mortgage payments have not been paid on time and/or are not made at the correct level. Borrowers with a history of mortgage arrears will find it harder to effect a further mortgage with their current lender or a new lender in the future. However, there are some lenders who will consider lending to credit impaired individuals. |
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| AER - Annual Equivalent Rate |
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This illustrates what the interest rate would be if the interest was paid into the account and compounded each year. As every advert for savings products will contain an AER the consumer will be able to compare more easily the expected return from differing products. |
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| Advisory Funds |
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Funds placed with a bank or financial institution which may be invested at the bank or institution's discretion on the client's behalf. |
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| Amortisation |
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The settlement of a debt through the periodic repayment of principal and interest payments. |
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| ATM - Automated Teller Machines |
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Commonly referred to as cash dispensers or hole in the wall machines. Enables the user to access their account for withdrawals (typically up to ?250), get a balance, order statements or cheque books and sometimes pay bills or pay money in, 24 hours a day. There may be a charge if you use an ATM not supported by your own bank or user group. |
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