A document from a mortgage lender confirming that you will be able to borrow a certain amount. You can use this to prove to a seller that you can afford to buy their property. This document is also often referred to as a Decision in Principle (DIP) and Mortgage in Principle (MIP) which in a nutshell are all the same document just different terminology used.

Annual percentage rate: the overall cost of a mortgage, including the interest and fees. It assumes you will have the mortgage for the whole term, so may not be a useful way to compare deals.

If you go into arrears, it means you have 'defaulted' at least once on your mortgage repayments, ie you have missed a month's payment. Contact your lender as soon as possible if you think you may go into arrears.

A rate of interest set by the Bank of England, which tracker mortgages and standard variable rate mortgages usually follow.

Insurance that covers you for damage to the structure of your home. A lender will require you to have this in place when you take out a mortgage.

A buy-to-let property is bought with the sole intention of letting it to tenants. Most mortgage lenders offer special buy-to-let mortgage deals for this purpose.

The amount of money you borrow from the mortgage lender in order to buy a property.

With this type of additional feature on a mortgage, the lender gives you a certain amount of cash on completion.

County Court Judgement. These are made against you for non-payment of debt, and could make it harder for you to get a mortgage.

The legal process you must go through when you buy or sell property. This can be done by a solicitor or licensed conveyancer.

This is the amount you are required to put down yourself towards the cost of the property. The minimum deposit you will usually need is 5%, but the cheaper deals are available the larger your deposit becomes.

Penalty fee you have to pay if you want to leave your mortgage during a specified period, usually the period of the initial deal.

The amount of the property that you own outright, for example your deposit plus the capital you've paid off on your mortgage.

An equity release scheme allows older homeowners to release the cash tied up in their property. There are two types: lifetime mortgages and home-reversion schemes.

The mortgage interest rate stays the same for the initial period of the deal, which can be anything from 2 to 10 years. This means you can be sure of exactly what you will be paying on your mortgage each month, as your rate won't go up - or down - with the Bank of England base rate.

A flexible mortgage deal allows you to overpay, underpay or even take a payment holiday from your mortgage. This can help you pay off your mortgage early and save money on interest, but flexible mortgages are usually more expensive than conventional ones.

With freehold this means you own the building as well as the land it stands on, which is different to leasehold where you only own the building itself and not the land.

When an offer has been accepted on a property but a different buyer then makes a higher offer, which the seller accepts. Most reputable estate agents will discourage this to protect their buyers.

A third party who agrees to meet the monthly mortgage repayments if you are unable to. This is most common with first-time buyers, and the guarantor is usually their parent or guardian.

The government has launched a number of different Help to Buy schemes, including equity loans, mortgage guarantees, ISA’s and specific schemes for Scotland and Wales. They all aim to make home-buying easier.

A tax-free savings account, into which the government pays first-time buyers a cash bonus towards the purchase of a property. For every £200 saved, the government will deposit an additional £50, up to a maximum of £3,000.

You only pay the interest on your mortgage each month, without repaying any of the capital loan itself. The idea is that you build up enough money to be able to pay off the mortgage at the end of the term in other ways - for example through investing in stocks and shares, pension endowment or the sale of a property.

The official body responsible for maintaining details of property ownership, your solicitor/conveyancer will register your property ownership as part of the legal process.

You own the building but not the land it stands on, and only for a certain period (anything up to 999 years). You may find it hard to get a mortgage if there are fewer than 70 years left on the lease of the property you want to buy.

The size of your mortgage as a percentage of the property’s value. The larger your deposit, the lower your loan-to-value becomes, making it easier to be approved as well as obtaining better interest rates.

The amount you pay your mortgage lender each month. If you're on a repayment mortgage, the payment will cover a percentage of your mortgage plus interest.

A formal contract between lender and borrower, outlining the legal obligations of the borrower and the rights the lender has if the borrower fails to make a repayment.

The amount of time you are taking the mortgage out for, this can be anything from 1-40 years depending on the lender and your circumstances. On a repayment mortgage, the longer your term the cheaper your monthly payments become because you are spreading the cost out over a longer period.

When the value of your home falls to a level that is below the amount remaining on your mortgage, meaning the debt secured on the property exceeds the assets value.

An offset mortgage links your mortgage with your savings and, sometimes, your current account. Your credit balances are offset against your mortgage debt so you only pay interest on the difference, while also paying off the capital.

A portable mortgage allows you to transfer your borrowing from one property to another if you move, usually without incurring the early repayment charges you would face by moving to another lender for a new mortgage.

This is the value of your home for insurance purposes only as it is the estimated cost of rebuilding your home if it is destroyed, it is not linked to the market value of the property as these are two different figures.

When you change your mortgage without moving house. You can do this to save money, to change to a different type of mortgage or to release equity from your home. You should not sit on your lenders standard variable rate for any reason at all unless there is a specific reason for doing so as you will almost certainly be paying more per month than you should be which is why a remortgage is so important.

You pay off the mortgage interest and part of the capital of your loan each month. Unless you miss any repayments, you are guaranteed to have paid off the mortgage by the end of the term.

Required by some lenders if you take out an interest-only mortgage, this is the means by which you're intending to pay off your mortgage at the end of the term - for example, another property, or a stocks and shares portfolio.

Originally intended to enable tenants of council houses to buy the homes they lived in, this is now being opened up to housing association tenants too. If offered to you then you will likely receive a discount on the purchase price of the property subject to how long you have lived there as a tenant.

The fee paid to a managing agent for the ongoing maintenance of a leasehold property. This fee will vary between properties with some more expensive than others.

You buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share, which is owned by the local housing association.

Stamp duty land tax (SDLT) is payable when you buy a property for more than £125,000 (or £40,000 if it's a buy-to-let property or second home). First Time Buyers can benefit from stamp duty relief as one of many incentives on offer.

The default mortgage interest rate that your lender will charge after your initial mortgage deal period ends. This could be higher or lower than your original rate but almost certainly higher than what would be available if you were to remortgage which is why it is important to review.

A sub-prime mortgage is geared towards people who have had credit problems, offering more lenient/flexible lending criteria but typically coming with a higher interest rate as a result.

This is the period during which you are 'locked in' to your mortgage deal. You'll have to pay an early repayment charge if you leave your mortgage during this period.

The interest rate on your mortgage tracks the Bank of England base rate at a set margin above or below it meaning it can fluctuate at any point, outside of your control.

Lenders always carry out a basic mortgage valuation to check whether the property is worth the amount you're paying for it. You can choose to have a more in depth survey done too, to check for structural problems or give you more of an idea on the overall property condition. The two most common types of Survey would be a Homebuyers Report or a Structural Engineers Report.

The interest rate on your mortgage can go up or down according to your lender’s standard variable rate. This is the interest rate you typically revert to at the end of your fixed rate period and is often very uncompetitive.