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Accident,
sickness and unemployment insurance (ASU) Insurance cover arranged by the borrower to protect against inability to meet mortgage payments. This cover could be described as accident, sickness and redundancy insurance as unemployment cover is generally seriously restricted to cover only events that are entirely beyond the control of the insured person. Typical exclusions include dismissal following professional misconduct and any act of voluntary redundancy. This cover will also be subject to major restrictions such as any act of self-injury or any injury related to the use of alcohol or drugs. Accountant A certified or chartered accountant. Accountant’s letter A letter, provided by an accountant, to confirm income. Some lenders may accept an accountant's letter in lieu of audited accounts. Such confirmation is more likely to be accepted if the loan-to-value (LTV) is low and it is normally used only for the self employed or controlling directors. Added to loan A reference to the additional costs associated with arranging a mortgage such as High loan to value fee or arrangement fees, which can be included into the amount you borrow. Fees that may be added vary by lender. Care should be exercised when the sum of the loan and any costs added to the loan may cause the total advance to exceed a given loan to value (LTV). In certain cases additional conditions may well apply. Additional security If lending exceeds a certain loan-to-value (LTV) most lenders may require extra security. The simplest form of additional security is a single mortgage loan-to-value. Alternatively lenders may accept other security such as cash or shares being deposited with them or a charge over another property. Administration charge Also see valuation fee. Some lenders will reserve a proportion of the fee to cover their own costs. This amount of the valuation fee may not be refunded, even if an application does not proceed and the valuation has not taken place. Agricultural tie A restriction placed on a rural property, which requires that the land adjoining a residence be actively used for farming. Not all lenders will accept this. Annualised percentage rate (APR) A definition used to identify the true cost of borrowing over the term of the loan and is used to provide the consumer with a method of comparing the true costs of different types of loan. Mortgage loans were originally excluded from a requirement to quote an APR, possibly because it is a highly inappropriate way of comparing mortgage loans. APR was designed to reflect the cost of different types of hire-purchase contracts over the entire loan term that, at the time the legislation was drafted, were normally quoted on flat and fixed basis. This gave headline rates that were often half the APR. It is a legal requirement that a true APR figure be provided with any loan illustration. Annuity mortgage Another term for a capital & interest repayment mortgage. Applicant A person(s) applying for a mortgage. Applicant type Used to determine if an applicant is a first time buyer or self-employed, for example. Arrangement fee A fee charged by a lender for arranging a loan. Normally payable upon completion but may sometimes be added to the loan and detailed on the offer letter. Arrears Mortgage payments that have not been made by the due date in accordance with the mortgage deed i.e. late or missed payments. |
