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Jargon Buster

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Term Meaning
Accident, Sickness, Unemployment (ASU)

This is a protection policy designed to provide a regular income to pay your mortgage should you become unemployed or be unable to work due to accident or sickness.

Affordability

An applicant’s ability to repay the mortgage/remortgage. Income and affordability calculations are used by mortgage lenders to access affordability of the loan.

Agreement in Principle (AIP)

A lender agrees to advance moneys conditional upon the verification of the borrower’s details. This is obtained before mortgage underwriting commences and is sometimes referred to a Decision in Principle (DIP).

Annual Percentage Rate (APR)

The overall cost of a loan taking into account the term, interest rate and other costs.

Arrangement Fees

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.