Mortgages, Brokers and Terminology

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I am sure we are all guilty of using terms, phrases and initials for various things in our working lives and Mortgage Brokers are no different.

I thought it would be a useful post to explain different terms and phrases, some of which you will begin to see more and more of due to recent European regulation changes.

  • AIP/DIP/MIP – Agreement in Principle/Decision in Principle/Mortgage in Principle.

What does it mean? They are all the same, in short it means the lender may have done a credit check and checked your initial information against their basic criteria – affordability etc. It is the first hurdle but there are a few more following this and it is no guarantee you have your mortgage.

  • KFI/KFI+/ESIS/Mortgage illustration. – Key Facts Illustration/European Standardised Information Sheet

What does it mean? It is a document that lays out the information in a way that allows you to compare like for like, ie the monthly repayments, the fees, the rates, any incentives, overpayment facilities etc etc. It has recently become a little more complex due to recent European changes, the plan is however over the next 2-3 years (by 2019) for all Mortgage lenders in the whole of Europe to use the same format. This will be phased in as the lenders have been given some breathing space, some lenders have implimented it already others have not.

  • KFD – Key Features Document

What does it mean? Very similar to the KFI/ESIS documents but instead of being for Mortgages, it is for insurance.

If you have any other phrases you are unsure of, please do get in touch we would be happy to explain and add it to our list.