When a mortgage is redeemed/ paid off early there may be interest penalties as part of a special scheme or regardless. These can be quite hefty but will normally reduce the longer the mortgage runs for.

Offered by some banks and building societies these require a regular amount to be saved each month. In return a higher rate of interest is paid but there will normally be restrictions on withdrawals and penalties for missed payments ie loss of interest.

This involves arranging a new mortgage with a new lender but on an existing property ie not as part of a house sale and purchase. Remortgages are normally done to obtain a better deal and/ or to raise additional funds.

With a repayment mortgage monthly payments cover both interest and the loan itself. At the end of the mortgage term the original loan will have been repaid.

When a borrower is seriously behind with his mortgage payments the lender may seek court approval to repossess the property and then force a sale on it often at below market value.

The Retail Prices Index is an average measure of how the prices of a basket of goods and services bought by most consumers in the UK is changing. It is calculated monthly and gives us the headline inflation figure quoted by the media.

When a mortgage is paid off, the lender will make a charge for sealing the legal deed.

A secured loan is a loan upon which security has been taken by the lender. The loan is used for consumer purchases or to repay other debt and will be secured on the borrower’s property or some other asset. Secured loans charge lower interest rates than unsecured ones as the security can be sold by the lender to recover debt in the event of default by the borrower.

Most mortgage applications require proof of income such as pay-slips or company accounts. For some people though this can be difficult and they may choose to self-certify ie signing a declaration to confirm their income.

For lenders this will involve extra risk as the income certified may not be true or accurate. To cover this extra risk the lender will charge a higher interest rate and may exclude certain mortgage deals on offer to their normal customers.

A share represents legal ownership of part of a company. The shares may be traded on the Stock Market or only be available for private sale.

For people who prefer to make their own pension investment decisions rather than paying a pensions provider, SIPPs are available.

To make pensions more accessible and attractive to most people and thereby encourage them to save for retirement, Stakeholder Pensions were introduced as low cost alternatives to those that were being provided by insurers. They are still provided by the insurance companies but must adhere to government rules on charges, access and terms.

When purchasing a property a tax is payable called Stamp Duty. The amount depends on the purchase price of the property. Currently, no stamp duty is payable for properties with a purchase price less than £125,000 rising to 4% for properties over £500,000.

An instruction given to a bank by one of its customers to make regular payments to a specific company or other recipient.

These are a specific type of credit card but can only be used in the retailer’s chain of stores.

This is the amount covered by an insurance policy and is payable when a defined event eg death, takes place.

A person qualified to carry out valuations and surveys on properties.

This is the normal interest rate charged by lenders as opposed to those that form part of special schemes such as fixed rates. The SVR rate is flexible and will go up and down in line with general interest rates. As a result monthly mortgage payments will change in the same direction.

Term Assurance is a life insurance policy which pays out on the death of a person. A regular or annual premium is payable. Term assurance provides cheap and straightforward life cover for a fixed term. The sum assured is payable only if the person dies within that term. There is no investment value to the policy at any time.

 With Level Term Assurance the sum assured remains constant during the term of the policy. Decreasing Term Assurance has a sum assured that reduces on a steady basis.  It is often used to provide life cover on loans and mortgages that are being repaid on a capital repayment basis.

Tax-Exempt Special Savings Accounts, or TESSAs, were tax free 5 year savings accounts which enabled you to receive interest gross - without the deduction of any tax. The TESSA was replaced by the ISA in 1999. However TESSAs in existence at that date were allowed to continue to run to maturity under normal TESSA rules. The last TESSAs matured in 2004. The capital from a maturing TESSA  could be deposited into a TESSA Only ISA until October 2004 without affecting the amount that can be invested into the cash component of an ISA.

New Tessa Only ISAs are now only opened when transferring between TESSA only ISAs.

Some mortgages may require the borrower to stay with the lender for a certain length of time. Moving to another lender prior to this would involve an early redemption charge.

The title deed to a property is the official document providing proof of ownership and confirming the boundaries to the land on which a property is built. All title deed records are held with the Land Registry.

A tracker mortgage follows changes in the base rate of interest which is set by the Bank of England. As this official moves up and down so the tracker rate will follow suit affecting the level of monthly mortgage payments.

This shows the total cost of a loan or mortgage over the term. Just comparing interest rates may not be sufficient as many loans and mortgages will include other charges and extras such as arrangement fees, cashbacks and redemption penatlies. The true cost of borrowing enables proper comparisons to be made between different schemes.

This is an assessment of an applicants likelihood to make a claim on a policy based on facts such as age, health, lifestyle and current life expectancy figures. The term is also used by lenders when assessing loan applications.

Pension contributions in this type of scheme buy units in a pooled fund or funds. Unit-linked pensions invest in a variety of funds to reflect the investment strategy of the pension fund. The value of the underlying shares and other assets may fluctuate, therefore, the unit value may rise or fall as well.

By spreading the investments the aim is to minimize the effect of a significant fall in one area and thus achieve good returns without unnecessary risk.

A unit trust operates in the same way as a unit linked pension except the investment is not intended to provide an income in retirement. It is a portfolio of investments spread market risks. Each unit trust will have thousands of people holding units in the fund.

A unit trust is open-ended investment. There is no limit to the number of units, more are created if demand increases.

Contributions into this type of scheme are used to buy units in an insurance company's with profits fund. The value of this fund increases annually in line with the investment performance and profits of the insurance company.

See personal loan

When applying for a mortgage,  a surveyor will asses the condition of the property and its current value. The lender will use this assessment to determine whether the property represents good security for the proposed loan.

A fee payable to the lender to check whether the property is good security for the loan being applied for.

With variable rate mortgages the interest rate is variable following changes in interest rates across the economy. Monthly mortgage payments will therefore go up and down and will only be steady for short periods.

VAT is a tax imposed by the government on most consumer spending. The standard rate of VAT is 17.5%.

This is a legal document detailing how somebody wishes their assets to be divided up upon their death. A will must be properly drawn up otherwise it may be invalid or contestable by people unhappy with its contents.  If a person dies without leaving a valid will theLlaws of Intestacy will apply. These dictate how a person’s assets are to be divided up and may conflict with any wishes expressed in an invalid/ unclear will.

With Profits Bonds are lump sum investments which include a small amount of life cover on a whole of life basis ie the life cover has no end date other than death.

The investment buys units in the insurance company’s With Profits Fund which invests in a wide range of shares, government securities and property. Bonuses are added each year.