Posted: 21 January 2015 by Higgins Homes
A Advance money transferred from a lender to a buyer secured on the property being purchased as part of the mortgage debt. APR the Annual Percentage Rate the total cost of a loan, including interest charges and fees. Auction where a property is sold to a buyer who bids the highest.
B Base Rate the interest rate set by the Bank of England. Bridging Loan finance that is advanced to help a buyer purchase a new property before the old one has been sold. Building Survey a report on the construction of a property, including any defects, usually carried out by a chartered surveyor (also called a Structural Survey).
C Capital the amount of a mortgage that is borrowed (not the interest). Charge security taken by a lender over a property when granting a mortgage. Conveyancing the legal work involved in the buying and selling of a property.
D Deed the legal document that proves ownership of a property (also known as Title Deed). Deposit the money paid to the seller by the buyer when contracts are exchanged to secure the property. Disbursements the third party costs of buying and selling a property, including stamp duty.
E Easement a right that is granted over a property to someone other than the property owner, such as a right of way. Endowment mortgage where mortgage payments are made into a life assurance policy that is then used to clear the mortgage debt at the end of the term. Exchange the exchange of contracts at which point intention to transfer ownership is indicated and both parties are legally bound.
F Fixed Mortgage Rate where the interest rate is fixed for a specific period (i.e. it won't move) rather than being variable. Fixtures & Fittings items that should be included in a property sale that are not part of the structure of the property itself. Freehold the most absolute form of property ownership without a time limit.
G Gazumping where an offer has been agreed but the seller then accepts a higher offer from someone else. Ground Rent the amount paid by a leaseholder to a freeholder to occupy the property.
H Homebuyer's Report the basic surveyor's report on the condition, value and defects a buyer should be aware of. Home Information Pack provided by the seller before marketing a property and containing information about the property being sold (compulsory).
I Interest Only Mortgage a type of mortgage where the monthly payments only cover the interest being charged on the capital of the loan. The borrower should save/invest the rest to pay off the capital at the end of the term.
J Joint Tenants where two or more people hold a property equally. If one dies then their share of the property passes to the other.
L Land Registry the government department that deals with property buying and selling in England and Wales. Fees are paid to the Land Registry to register a property and searches are carried out against its databases. Leasehold a form of property ownership whereby the right to occupy the property is in the form of a lease agreement for a specific period of time. Requires annual payment of rent to the freeholder. This is not a tenancy agreement. Local Authority Search a search carried out with the local council looking for any future development issues potentially affecting the property and its local area.
M Mortgage a long-term loan that is secured on a property to fund the purchase of that property. Mortgage Indemnity Guarantee a fee that some lenders charge to protect themselves against the borrower defaulting on the mortgage.
N Negative Equity a situation where the mortgage balance on a property is less than the property is now worth. NHBC (National House Building Council) Scheme a guarantee against structural defects that comes with some new build homes.
O Offer the amount put forward by a buyer as the figure at which they would be willing to purchase the property. Not legally binding. Open Market Value the amount that a property would likely be sold for if it were on the market.
P Preliminary Enquiries questions put to the seller that must be answered before contracts are exchanged.
R Redemption the point at which the mortgage is fully repaid. Repayment Mortgage where the monthly mortgage repayments are a combination of interest and capital.
S Searches part of the process of purchasing a property to ensure there are no hidden issues or defects. Searches are normally made with the Land Registry and the Local Authority Stamp Duty officially called Stamp Duty Land Tax. This is paid to the government by the buyer when the purchase is made. Rates vary from 2% to 12%. Standard Variable Rate (SVR) Mortgage a mortgage which has an interest rate that can change according to the lender. The changes are usually influenced by market conditions.
T Tenants in Common shared home ownership where the shares are not necessarily equal. If one 'tenant' dies then their share of the property passes according to their will and not automatically to the other tenant. Title the legal right to the ownership of a property.
U Under Offer the period of time between the seller accepting an offer and exchange of contracts.