1 STOP FINANCIAL SERVICES

Glossary

A

Adverse Credit: This is the term used for people who have a poor credit history. This could include previous mortgage or loan arrears, CCJ's or bankruptcy.
AER: This stands for Annual Equivalent Rate. This rate is generally quoted on interest paid on savings and investments. Interest paid monthly, quarterly or half-yearly represents a higher true rate than the same stated interest rate paid annually. Thus, the AER allows you to compare interest rates across accounts and reflects not just the amount of interest but also how often it is paid. It shows what your interest return would be if the interest was compounded and paid annually instead of monthly (or any other period).
Affinity / Donation Cards: These are issued by credit card companies and operate as standard credit cards but a percentage of purchases made via card usage is donated to a charitable beneficiary by the issuer. A donation may also made to the beneficiary on issue or first use of the card.
Allocation Rate: This is the percentage of a payment that is invested once charges have been deducted.
Annual Management Charge: This charge is deducted from an investment each year and is usually worked as a percentage of your investment.
Annuity: An annuity provides a guaranteed income for life in return for a lump sum invested. There are two types of annuities; Compulsory purchase and Purchased life. Compulsory purchase annuities are bought with a payment from an employer's pension scheme or personal pension fund. Part of the fund may be paid out as tax-free cash, the remainder must be used to buy an annuity.
APR: This stands for Annual Percentage Rate. Any firm that lends money is required by law to quote the APR. Introductory rates do not include arrangement fees you may be charged and also don’t reflect any higher rate of interest that your borrowings will ultimately revert to. The APR takes into account the interest on a loan plus and additional charges making it easier for you to compare products. In general, the lower the APR the better the deal.
Arrangement Fee: This is a fee for a Lender for providing you with a mortgage or loan. They are usually paid on completion and tend to apply when you take out a fixed rate, discount or cash back mortgage.
ASU: This stands for Accident, Sickness and Unemployment insurance. This insurance covers mortgage repayments in case of accident, sickness or involuntary unemployment.
AVC: This stands for Additional Voluntary Contributions. As a member of an Occupational Pensions Scheme these are payments made above the normal level of contribution to gain additional pension benefits.

B

Balance Transfer: Balance transfer rates are applied to existing card debt that is being moved from one issuer to another or a consolidation of other debts. These rates tend to be lower than standard rates and apply to the debt transferred or consolidated for a specified term or until it is repaid in full.
Bank of England: The Bank of England is the central bank of the UK
Bankers Draft: A bankers draft is a secure way of receiving money where you fear acheque may bounce. The draft is a cheque which is drawn directly on the bank or building society against funds in a bank account. There is usually a fee for obtaining a bankers draft.
Base Rate: Base rate is the interest rate set by the Bank of England which determines borrowing and savings rates.
BBA: This stands for British Bankers' Association who are the trade association for British banks.
Bid price: This is the price at which you sell shares back to a company.
APR: This stands for Annual Percentage Rate. Any firm that lends money is required by law to quote the APR. Introductory rates do not include arrangement fees you may be charged and also don’t reflect any higher rate of interest that your borrowings will ultimately revert to. The APR takes into account the interest on a loan plus and additional charges making it easier for you to compare products. In general, the lower the APR the better the deal.
Bond: These are issued by companies in order to raise finance and pay interest to the holder.
Bridging Loan: This is a short term loan that 'bridges' the time period between two property transactions. It is used to cover shortfalls between buying one property and selling another. Major banks and building societies can offer bridging finance.
BSA: This stands for Building Societies' Association which is the trade association for British building societies.
Building Society: A building society is a mutual organisation owned by its members - its savers and borrowers - and not by shareholders.
Buildings & Contents Insurance: This is a combined insurance policy that covers the cost of rebuilding or repairing a property and replacing damaged or stolen contents.
Business Current Accounts: Business current accounts are available to non-personal customers, for example clubs, charities, and companies. Availability may be restricted by customer type, minimum balance requirements or business turnover.
Buy-to-Let Mortgage: Buy-to-let mortgages are provided for property purchases or remortgages for investment in the private rental sector. Assessment of borrower affordability can be based on projected rental income and/or earnings, dependent on the lender's individual policy.

C

Capital: If this refers to borrowing this is the amount owing not taking interest into account. When investing, this is the original investment amount.
Capital & Interest mortgage: This is also known as a repayment mortgage. With a repayment mortgage, the money you pay each month covers both the interest and capital of the loan. This means that at the end of the term you don't need any extra money to pay off the loan.
Capped Rate Mortgage: A capped rate mortgage has a maximum interest rate for a given term. The interest rate you pay cannot go higher than the agreed capped rate, thus you know the maximum amount your monthly repayments could rise to. However, if the basic interest rate falls below the capped rate, repayments will also reduce.
Cash Back Mortgage: This gives you a cash rebate on completion of the purchase. The sum is either a percentage of the advance or a fixed sum. This cash back could help you to cover some of the expenses of setting up home but this bonus is often subject to higher repayment rates and may include penalties for repaying the loan early.
Cash Card: These are plastic cards used for withdrawing cash from Automatic Teller Machines (ATMs) - also known as ‘hole in the wall’ machines.
CCA: This stands for the Consumer Credit Act. This legislation sets the rules for the way in which UK banks and lenders may lend money.
CGT: This stands for Capital Gains Tax. This is a tax on the increase in the value of an asset since it was purchased. Everyone is allowed to make a certain level of profit each year before capital gains tax is charged. The amount of the allowance is ?9,200 for the 2007/2008 tax year. This amount is reviewed annually in the Budget.
CHAPS: This stands for the Clearing House Automatic Payment System. It is the electronic transfer of payment between two accounts.
Cheque: A written order directing a bank to pay money
Child Trust Fund: The Child Trust Fund became effective on 6 April 2005, for children born on or after 1 September 2002. Children in receipt of Child Benefit will receive a sum of ?250 in the form of a voucher to be used to open either a cash or equity based account on behalf of the child. Families in receipt of full Child Tax Credit or certain benefits when Child Benefit was first paid will receive a further ?250. If an account is not opened within a year, the Inland Revenue will open a Stakeholder account on behalf of the child. Parents, grandparents and friends will be allowed to make additional deposits up to a maximum of ?1,200 each year. At age 7 the Government will make a further payment to the account, currently proposed at a minimum of ?250, at age 16 the child can begin to make decisions about how the money is managed, and at age 18 the account matures and the child receives the proceeds. No withdrawals are permitted during the 18 year term.
Commercial Mortgage: Commercial Mortgages are used to purchase a business property or going concern, for the expansion of existing business premises or for property development. Commercial property includes shops, public houses and farms.
Commission: This is an amount paid to a provider or intermediary for placing business.
Company Pensions: A pension scheme set up by an employer to provide retirement benefits to employees.
Completion: Once the purchase of a property is complete and you are the new owner.
Compulsory Purchase Annuity: Compulsory purchase annuities are bought with a payment from an employer's pension scheme or personal pension fund. Part of the fund may be paid out as tax-free cash, the remainder must be used to buy an annuity. The income payments (usually monthly) from this type of annuity are taxed as earned income and are usually paid to the recipient net of basic rate tax. Higher rate taxpayers may be liable for additional tax which at present has to be collected separately.
Consolidated Loan: This is a loan taken out to consolidate debts.
Conveyancing: The legal process involved in buying and selling a property.
Corporation Tax: This tax is payable by companies on their profits.
Cover Note: This is a temporary certificate that shows an insurance policy is in place.
Credit Card: Credit cards are a form of borrowing used to purchase goods and services, to obtain cash advances and for consolidating debt.
Credit Rating: This is a scoring system that lenders issue people with to determine how credit worthy they are.
Credit Search: This is a check a lender may take out to determine whether a person has any County Court Judgments or a record of not repaying debts.
Critical Illness Cover: This insurance pays out if the holder is diagnosed with an illness covered by the policy.
Current Account: These accounts offer the facility of a chequebook / cash card and do not require any notice to be given to withdraw funds. The accounts vary in the facilities offered such as cheque guarantee cards, debit cards and overdrafts etc
Current Account & Offset Mortgage: A current account mortgage allows you to operate your mortgage borrowing through a current account. This method enables you to save interest as your normal cash-flow will alter the outstanding debt. You will be required to pay your salary into the account. An offset mortgage allows you to keep your balances e.g. mortgage, savings, current account etc in separate accounts but all balances are offset against each other thus allowing the possibility of reducing the interest paid and could result in the mortgage being repaid early.

D

Death Benefit: A sum paid when the insured life dies.
Death in Service Benefit: A sum paid by an employer to beneficiaries if the insured person dies whilst still under their employment.
Debit Card: A debit card allows you to make purchases and withdraw cash by using funds from your bank account. These funds are automatically withdrawn from the connected account. They act as an alternative to cash and cheques.
Decreasing Term Assurance: Decreasing Term Assurance indicates that the sum assured decreases over the term of the policy. This is commonly used to protect a capital & interest repayment mortgage, where the outstanding balance reduces during the life of the borrowing.
Deed: This is a legal document that shows who legally owns a property.
Direct Debit: This allows an organisation to take money directly for a persons bank account.
Discounted Mortgage: A discounted mortgage offers you reduced repayments for a given term. The lender gives a discount off a variable rate. For example, the variable rate may be 6% with a discount of 1% making your initial interest repayment rate 5%.
Dividend: Money paid to shareholders.

E

Early Repayment Charge: If you repay (redeem) your mortgage at any time prior to the end of the mortgage term you may have to pay certain fees or an interest penalty (redemption penalty). If the mortgage is repayed in the early years there may be a heftier penalty, a product penalty. An extended redemption tie-in means that this penalty will continue to be payable beyond the initial term of the mortgage.
Endowment: An endowment policy is a savings policy which provides life assurance cover for a policyholder. The policy exists for an agreed term, the minimum term usually being 10 years. A cash sum is paid out at the end of the policy term (on maturity), or in the event of the earlier death of a policyholder, either a predetermined sum (in the event of death) or an agreed capital sum on maturity.
Equities: Stocks and Shares.
Equity Release: This is the process in which a new larger mortgage or an existing mortgage is increased to release some extra funds.
Estate: This is the money, property, belongings and debts belonging to a person when they die.
Euro: The basic monetary unit of most members of the European Union (introduced in 1999).

F

Final Salary Scheme: This is a pension scheme where the amount of benefit is based on final salary.
Financial Ombudsman Service: The professional body that handles complaints about financial firms.
Fixed Rate Account: These accounts offer a fixed rate of interest over a defined period. This means that the interest paid on the account will not be affected by changes in interest rates for a specified term.
Fixed Rate Bonds: Fixed rate bonds are savings products where you deposit a lump sum for a specific period. In return you get a fixed rate of interest.
Fixed Rate Mortgage: If you choose a fixed rate mortgage your monthly repayments will not change for the period of the fixed rate, regardless of the interest rate in the market place. This may be important to you if you have a limited budget as you are protected from rising interest rates. However, if the variable rate falls below the fixed rate level, your repayments will not fall. Usually these are 2, 3, 5 or 10 year terms but recently some companies have introduced 25 year term fixed deals.
Flexible Mortgage: The main feature of a flexible mortgage is the facility to make extra payments when you have extra money. You may also be able to reduce monthly repayments or even take repayment holidays, although you will normally have to build up a reserve through making overpayments before this arrangement is allowed. Such mortgages are usually offered on a daily interest basis. Flexible mortgages usually provide a loan drawdown facility that allows you to borrow extra funds at a set predetermined rate.
Freehold: Freehold means that you own both the building and the land it is on.
FSA: This stands for 'Financial Services Authority' who regulate the UK financial services industry.
FTSE 100: Shares are traded on the London Stock Exchange in the UK. The 100 companies that have the largest value on the stock market are included in the FTSE 100.
Further Advance: This is the process of borrowing additional money against a property.

G

Gazumping: Gazumping means the seller of an asset , such as a house, accepts a higher purchase offer, when they have already accepted another lower offer from another potential buyer.
GIB: This stands for Guaranteed Income Bond. It is a short-term life assurance contract guaranteeing a fixed income over a fixed term. The original investment is guaranteed to be repaid in full at the end of the term.
Gilts: Gilts (also known as Government Stocks) are loans made to the Government in order to fund its spending. They pay interest over a set term.
Gross Interest: This is interest earned by deposits at banks and financial institutions, or on gilts etc. before the deduction of tax.
Guarantor: This person repays and debt incurred if you are unable to do this yourself.

H

Health Insurance: This insurance protects you in the case of sickness or injury.
High Lending Charge: This is a fee that is used to buy insurance to protect the mortgage lender if you borrow more than a given amount. Many mortgage lenders will lend you up to, say, 90% of the value of a property without this fee. But, if you want to borrow more, the lender usually requires you to pay for insurance to ensure that it will recover all its money, even if the property had to be sold for less than the amount of the mortgage.
Hire Purchase: This means you hire a product you are buying and pay for it and interest over a fixed term.

I

IFA: This stands for 'Independent Financial Adviser'. These are people who are trained and authorised to give advice on financial products.
IHT: This stands for Inheritance Tax. A charge to IHT occurs when someone dies or when assets are transferred to a company or discretionary trust.
Income Multiple: This is a calculation used by mortgage lenders to determine how much they will lend you. This is typically three times your income, or two and a half times joint income. However, many lenders now base this on your ability to make repayments, taking into account your income and outgoings.
Income Tax: Income tax is payable on any income, whether it comes from working or an investment.
Index-linked: The changes in line with inflation.
Inflation: Inflation is a general rise in prices across the economy.
Inland Revenue: The Government body who control taxation :. The Tax Man
Insurance: An insurance policy provides compensation following a loss.
Interest Free Credit: When you pay for something in installments over a certain period free of any interest charges.
Interest Only Mortgage: With an interest-only mortgage your monthly mortgage payments only pay the interest element of the loan and don't pay off any of the capital. To repay the capital most borrowers take out some kind of savings plan to ensure that at some time in the future they will have enough money to pay off their mortgage, such as an ISA pension or an endowment.
Investment Club: Investment Clubs allow people to pool together and invest in the stock market.
Investment Trust: An investment trust is a company in which shares can be bought, and which must be quoted on a Stock Exchange, usually the London. It is a 'pooled' investment, with many investors owning shares in the same trust. The investment trust makes its profits by investing in the shares of other companies rather than by manufacturing a product that it then sells.
ISA: This stands for Individual Savings Account. The Individual Savings Account was introduced on 6th April 1999. Individuals who are both resident and ordinarily resident in the UK for tax purposes and are aged 18 and over (16 for mini cash ISAs) are eligible to subscribe to an account. The scheme will run initially for ten years but will be reviewed after seven years to decide on any changes which may be required at the end of the scheme. Returns from ISA savings are free of income tax and capital gains tax.

L

Land Registration: The register of who owns plots of land which also details any legal charges on it.
Leasehold: Leasehold means that someone else owns the land the building is on and so you are only buying the right to live in the property for a certain length of time.
Level Term Assurance: Term Assurance is a life insurance policy which covers the life of a person in monetary terms in return for a payment, usually monthly, and known as a premium. Term assurance is the cheapest and simplest form of life cover, providing life assurance for a fixed term only. The sum assured is payable only if the life assured dies within that term. There is no investment value to the policy at any time. In the case of Level Term Assurance the sum assured does not change during the term of the policy.
LIBOR: LIBOR stands for the London Interbank Offered Rate and is the rate of interest at which banks borrow funds from other banks, in marketable size, in the London interbank market.
LTV: This stands for Loan to Value which is ratio between size of loan and value of property. So, for example if you require a ?90,000 mortgage on a property valued at ?100,000 the loan-to-value you require is 90%.

M

Maxi ISA: This is a tax-free savings vehicle in which you can invest up to £7,000 each year. You can invest either the full amount in stocks and shares or up to ?3,000 in cash savings and up to ?4,000 in life insurance investments.
Mini Cash ISA: The Individual Savings Account (ISA) was introduced on 6th April 1999. Individuals who are both resident and ordinarily resident in the UK for tax purposes and aged 16 and over are eligible to open an account. Returns from an ISA are free of income tax and capital gains tax. The maximum investment permitted per tax year is ?3,000. ISAs can be instant access accounts (those which do not require any notice to be given to withdraw funds) or notice accounts (those where notice must be given to withdraw funds without penalty).
Monthly Income Accounts: These accounts pay monthly interest.
Mortgage: This is a loan used to buy a property. The property is used as security against paying back the loan.
Mortgage Payment Protection: If you cannot work or are made redundant this policy will pay your mortgage for you.
Mutual: A mutual organisation is owned by its members and not by shareholders.

N

National Insurance: A form of tax on salary which funds state benefits.
National Savings & Investments: The government savings scheme.
Negative Equity: You are considered to be in negative equity if the money you owe on your mortgage is greater than the value of your property.
Net Interest: Interest earned once basic level tax has been deducted.
Notice Accounts: These accounts require notice to be given to withdraw funds to avoid any penalty, such as loss of interest.

O

OEIC: This stands for Open Ended Investment Company. These are a type of unit trust that have converted into a company.
Offset Mortgage: An offset mortgage allows you to keep your balances e.g. mortgage, savings, current account etc in separate accounts but all balances are offset against each other thus allowing the possibility of reducing the interest paid and could result in the mortgage being repaid early.
Offshore Accounts: Many banks provide offshore accounts based in the Channel Islands and the Isle of Man. Interest is paid into the account gross but has to be declared as income.
Overdraft: Banks will often allow you to overdraw your current account. If you have arranged for an overdraft facility on your account you will be charged an authorised overdraft rate - the rate of interest that you will pay on your overdrawn balance if you remain within your authorised limit. If you have not arranged an overdraft facility or exceed your authorised limit you will be charged interest at the unauthorised overdraft rate.
Overpayment: This is when monthly repayments to a mortgage are increased, meaning that the mortgage is repaid before the end of the mortgage term.

P

Packaged Account: An account that charges a monthly fee but often offers benefits such as free travel insurance and reduced overdraft rates.
Payment Holiday: A period during which you make no payments on borrowings. This is usually only available on a flexible lending.
Pension: Money you get at retirement either from a personal plan or the government.
PEP: This stands for Personal Equity Plan. These are a tax efficient savings plans that invest in unit trusts or investment trusts. ISAs replaced PEPs on 6th April 1999 and new PEPs ceased on that date.
Personal Loan: A loan taken out by an individual over a fixed term.
Personal Pension: A personal pension is a tax-efficient savings plan that enables you to save for retirement. The contributions attract tax relief and they can be made in various ways, either regularly, by lump sum or by a combination of both. On retirement, up to 25% of the fund value can be taken as a tax-free cash lump sum. The remainder of the fund must be used to buy an annuity.
Portability: A mortgage which can be transferred between properties when you move house.
Premium: The amount paid for insurance cover.
Purchased Life Annuity: Purchased life annuities are purchased by private investors and payments comprise part taxed interest and part untaxed return of capital.

R

Redemption: If you repay (redeem) your mortgage at any time prior to the end of the mortgage term you may have to pay certain fees or an interest penalty (redemption penalty). If the mortgage is repayed in the early years there may be a heftier penalty, a product penalty. An extended redemption tie-in means that this penalty will continue to be payable beyond the initial term of the mortgage.
Regular Savings Accounts: A number of banks and buildings societies offer regular savings accounts. These require a deposit to be paid into the account each month. These accounts often give a higher rate of interest than a normal savings account. However, they usually come with a restriction on the number of withdrawals (and missed deposits), which if exceeded can mean a dramatic drop in the rate of interest paid.
Remortgage: Switching a mortgage to a new lender.
Repayment Mortgage: With a repayment mortgage, the money you pay each month covers both the interest and capital of the loan. This means that at the end of the term you don't need any extra money to pay off the loan.
Repossession: This is the legal process by which a borrower who has defaulted on mortgage repayments has the property taken away from them. This usually involves a forced sale of the property at public auction.
RPI: This stands for Retail Prices Index.RPI is an average measure of change in the prices of goods and services bought by the majority of households in the UK. It is compiled and published monthly.

S

Sealing Fee: The charge made by lenders when a mortgage is repaid.
Secured Loan: A secured personal loan is one in which some of your property (home, stocks and shares, etc) is held, by the lender, as security for the amount you have borrowed. Secured loans usually offer lower interest rates than unsecured ones.
Self Certified: Normally when applying for a mortgage you will be asked to provide pay slips or company accounts to prove your income. If it is difficult or inconvenient to provide this documentation, you can choose to self-certify your income. This involves signing a declaration which states your income sources and amounts. Lenders will usually charge you higher rates than average and offer you a more limited range of mortgages if you choose to self-certify your income.
Share: This is a legal document that states the holder is part owner of the company in which the share is held.
SIPP: This stands for Self Invested Personal Pension. These are personal pensions plans in which the person whose plan it is makes their own investment decisions.
Stakeholder Pension: These are low cost pensions that have to adhere to government rules on charges, access and terms.
Stamp Duty: This is a tax that's is payable by the purchaser on the purchase of a property. The amount paid depends on how much the property is purchased for. For properties with a purchase price of up to £125,000, no stamp duty is charged. For properties between £125,001 and £250,000, 1% stamp duty is payable on the purchase price. For properties between £250,001 and £500,000 it is 3% and for properties over £500,000 it is 4%. Some property areas are exempt from stamp duty but only up to the value of £150,000.
Standing Order: An authorised payment that instructs the regular payment of funds.
Store Card: Store cards are a form of credit card but are issued by or for a particular retailer and can only be used in that retailer's store's) / chain (unless it is endorsed by a credit card company).
Sum Insured: The amount covered by an insurance policy.
Surveyor: A surveyor is a person who is qualified to carry out valuations and surveys of properties.
SVR: This stands for Standard Variable Rate. This is the standard interest rate charged by lenders. The rate goes up and down (is variable) and your repayments will be adjusted accordingly.

T

Term Assurance: Term Assurance is a life insurance policy which covers the life of a person in monetary terms in return for a payment, usually monthly, and known as a premium. Term assurance is the cheapest and simplest form of life cover, providing life assurance for a fixed term only. The sum assured is payable only if the life assured dies within that term. There is no investment value to the policy at any time.
Tessa Only ISAs: Tax-Exempt Special Savings Accounts, or TESSAs, were five-year savings accounts which enabled you to receive interest gross - without the deduction of any tax. The TESSA was replaced by the ISA on 6 April 1999. However TESSAs in existence at that date were allowed to continue to run to maturity under normal TESSA rules. The last TESSAs, therefore, matured on 5 April 2004. Maturing TESSA (Tax Exempt Special Savings Account) capital could be deposited into a TESSA Only ISA until 5 October 2004 without affecting the amount that can be invested into the cash component of an ISA. The only opening of these now is by transferring between TESSA only ISAs.
Tie-in: As a condition of a certain mortgage deals you may have to agree to stay with the lender for a certain period of time. If you move your mortgage elsewhere during this period, you may have to pay penalty fee known as an early redemption charge.
Title Deed: States the owner of a property and details about the property and the land upon which it is built.
Tracker Mortgage: These mortgages track the changes in base rate and so the interest rate you pay changes in line with this.
True Cost: True cost shows the total cost of the mortgage over a period of time. This allows you to compare the overall cost of mortgages including repayments and any up-front fees. Any cash back at the beginning of the mortgage term is deducted from the true cost. Redemption penalties and start-up costs are included in this figure.

U

Underwriting: Where a company looks at known facts such as age and health in order to assess the likelihood of you making a claim on an insurance policy.
Unit Linked Pension: Such pension contributions are used to buy units in a pooled fund or funds. Unit-linked pensions are invested in a variety of funds. The funds are grouped together in sectors, representing the style, area and risk level in which the relevant pension fund has chosen to invest. As the value of the units may fall and rise during the period of investment, care is taken to 'spread' the investment in a variety of ways to obtain the best return commensurate with prudent investing.
Unit Trusts: A unit trust is a portfolio of investments that spread market risks. It allows an investor to reduce their risk exposure by pooling their investment. When investing in a unit trust, cash buys units. Each unit trust has thousands of people holding units in the fund. A unit trust is an open-ended investment, as the number of units in each trust will vary depending on supply. As more investors join, more units are created. Unit trusts cover a variety of funds.
Unitised With Profits Pension: With these pension schemes payments are used to buy units in an insurance company's with profits fund. The value of these increases annually depending on the investment performance and profits of the insurance company.
Unsecured Personal Loan: A personal loan available from a bank, building society or other financial institution without security. They are usually covered by the terms of the Consumer Credit Act. A lump sum will be loaned in return for you agreeing to make regular repayments usually by direct debit. Personal loans are available from ?500 up to ?25K (security will usually be needed for loans of large amounts) and are repayable over a period of time, usually between 6 months and 10 years.
Unitised With Profits Pension: With these pension schemes payments are used to buy units in an insurance company's with profits fund. The value of these increases annually depending on the investment performance and profits of the insurance company.

V

Valuation: A check of a property in order to find out how much it is worth and whether it is suitable to lend a mortgage on.
Valuation Fee: A fee payable to the lender to check what a property is worth and if it is suitable to lend a mortgage on.
Variable Rate Mortgage: A variable rate mortgage is one in which the amount you repay increases or decreases in line with any interest rate changes. This means that you cannot predict the monthly cost of the borrowing, which could cause financial concerns within the mortgage period.
VAT: This stands for Value Added Tax which is charged on most things that a person buys.

W

Will: A legal document that states where a person wants their assets to go when they die.
With Profits Bond: With Profits Bonds are single premium Whole of Life policies offered by many insurance companies and usually require lump sum investments. The amount of life cover is normally only minimal, and most With Profits Bonds are taken for investment growth and not life cover alone. The investment buys units in the insurer's With Profits fund. This fund invests in a wide range of underlying assets such as shares, fixed interest securities and property. Each year bonuses are added to the sum assured either by an increase in the price of units or by allocation of extra units.

Y

Yield: This is the annual return you get from holding a stock, share or unit trust. It is expressed as a percentage of its price.