| A |
| Term: |
Additional Security Fee |
| Explanation: |
An up-front, one-off fee paid to the lender to protect them against the borrower defaulting on the loan. Usually charged on mortgages over 75% of the house value. Also known as MIG, Indemnity Guarantee Premium and Mortgage Indemnity Premium. |
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| Term: |
Agents |
| Explanation: |
(See Estate Agents) |
|
| Term: |
APR |
| Explanation: |
Annual Percentage Rate. The true cost of a loan |
|
| Term: |
Auctions |
| Explanation: |
Property sale. If you win the bid, you are legally bound to buy the house.
n.b. Have a survey carried out before the auction. |
| B |
| Term: |
Bailiff |
| Explanation: |
Official who repossess your possessions or house if you cannot keep up on your mortgage repayments. |
|
| Term: |
Banks |
| Explanation: |
A place to go for Mortgages & Loans. |
|
| Term: |
Bridging Loan |
| Explanation: |
Usually a short term (and very expensive) loan to finance a second purchase before selling. |
|
| Term: |
Broker (mortgage) |
| Explanation: |
An intermediary who will give advice and offer a range of mortgages. Independant Financial Advisors are probably the best people to speak to pertaining the financial matters |
|
| Term: |
Building Society |
| Explanation: |
Another place to go for Mortgages & Loans. |
|
| Term: |
Buildings Insurance |
| Explanation: |
Insurance to cover the structural aspect of your home. |
| C |
| Term: |
Capital |
| Explanation: |
Monies invested into your home besides that of the mortgage – usually cash. |
|
| Term: |
Chain |
| Explanation: |
Where the vendor’s sale is dependent upon their purchase and so on or where the proposed purchase is dependent upon the sale of another property. The chain could quite easily collapse if one party fails to sell. |
|
| Term: |
Charge |
| Explanation: |
The term used for security that the lender has when granting a mortgage. |
|
| Term: |
Completion |
| Explanation: |
The point at which ownership legally passes to the buyer. In other words the day you can usually move into your new home. |
|
| Term: |
Contract Race |
| Explanation: |
When two or more separate parties have agreed to buy the same house and the solicitors issue legal papers to all parties. First one to exchange contracts gets the house. Not the ideal situation but occasionally necessary. |
|
| Term: |
Contracts |
| Explanation: |
The legal agreement needed to transfer the ownership of property. |
|
| Term: |
Conveyancing |
| Explanation: |
The term used for the legal work usually carried out by a qualified solicitor when buying and selling a house. |
| D |
| Term: |
Disbursements |
| Explanation: |
Expenses (land registry, local authority search, etc) paid by the solicitor on behalf of the purchaser. |
| E |
| Term: |
Endowment Mortgage |
| Explanation: |
A type of mortgage where regular payments are made into an ‘endowment (life assurance) policy’ which matures towards the end of the term of the mortgage. The amount paid in to the policy should be enough to pay off the whole of the mortgage at the end of the term. An endowment policy is usually transferable. |
|
| Term: |
Exchange of Contracts |
| Explanation: |
The point at which buyer and seller are legally bound to the sale and purchase of the property and a non-returnable deposit is paid to the vendor via the solicitors. This amountis negotiated atthe timebut is usuallt 10% of the purchase price. It can be any percentage as long as both parties agree. |
| F |
| Term: |
Failed Valuation Survey |
| Explanation: |
When the lender turns down your mortgage application after reading the surveyor's valuation report. This could be for a number of reasons including a low valuation or potential structural problems. |
|
| Term: |
Freehold |
| Explanation: |
Absolute ownership of property and land in perpetuity. |
| G |
| Term: |
Gazumping |
| Explanation: |
A word you will find in dictionary, unfortunately!. Where the seller of a property goes back on his agreement with a prospective buyer by raising the previously agreed price usually as a result of there being another interested buyer. |
|
| Term: |
Gazundering |
| Explanation: |
Now, you won’t find this word in the dictionary. When the buyer tries to renegotiate the purchase price (usually downwards!) just before exchange of contracts. Sometimes it works, more often it doesn’t and the vendor may refuse to deal with the buyer as a point of principle. |
| J |
| Term: |
Joint Agents |
| Explanation: |
When the vendor instructs two independent Estate Agents to sell their home. |
|
| Term: |
Joint Sole / Selling Agent |
| Explanation: |
When the vendor instructs two agents to act jointly to sell their home. |
| L |
| Term: |
Land Registry |
| Explanation: |
Where the documents to determin ownership and title are kept. Now available online at http://www.landregisteronline.gov.uk |
|
| Term: |
Lease |
| Explanation: |
A contract granting use or possession of property for a specified period in exchange for rent. This can also mean the term or duration of use or possession granted by such a contract. |
|
| Term: |
Leasehold |
| Explanation: |
Designated property held under a lease for a term of years. |
|
| Term: |
Lender's (mortgage) Arrangement Fees |
| Explanation: |
The administrative charge made by the lender to the buyer for arranging a loan. |
|
| Term: |
Lender's (mortgage) Legal Fees |
| Explanation: |
The fees incurred by the lender when arranging a mortgage. These costs are usually the responsibility of the buyer. |
|
| Term: |
Lender's (mortgage) Valuation |
| Explanation: |
A valuation of the proposed property carried out by a qualified valuer (usually RICS – Royal Institute of Chartered Surveyors) for the lender before agreeing to give out a mortgage. This is only a valuation survey. A separate full structural survey is recommended to ensure the structure is safe and sound. |
|
| Term: |
Life Assurance |
| Explanation: |
An insurance policy, which pays out a fixed lump sum in the event of death of the insured. The lenders normally ask for a life assurance policy to be attached to the mortgage as a precaution. |
|
| Term: |
Loan-to-Value |
| Explanation: |
A percentage expressing size of mortgage against the value of a house. For example, House Value=£100,000, Mortgage Size=£90,000. Loan-to-Value=90%. |
|
| Term: |
Local Authority Search |
| Explanation: |
A search carried out by the Solicitorto find out if there are any Local Authority Notices, with respect to the building itself (e.g. has it been condemned, planning permissions, building notices, etc..), and the surrounding area (e.g. have plans gone through to build a motorway next to the house?). |
| N |
| Term: |
Negative Equity |
| Explanation: |
When the value of your home is less than the mortgage you have on it. |
| O |
| Term: |
Over Valuing |
| Explanation: |
We wont name the culprits but it is true to say that agents compete to get an instruction. The agent may flatter you with cheaper fees but the biggest 'carrot' is their valuation of your home. There are dozens of examples but the worst was one where the agent valued the house at £2.95m and it sold for £1.45m. |
| P |
| Term: |
Pension Mortgage |
| Explanation: |
Monthly repayments made up of a) Interest on loan and b) contribution to a personal pension scheme. The loan on the house is paid off in one lump sum at the end of the loan period (in theory!). |
|
| Term: |
Public Liability Insurance |
| Explanation: |
Insurance, which covers injury or death to anyone on or around your property. Hmm. |
| R |
| Term: |
Redemption |
| Explanation: |
When a mortgage or loan is fully repaid. |
|
| Term: |
Relocation Agents |
| Explanation: |
Specialists in property search. They will charge you a fee for this service, which includes all the legwork involved. |
|
| Term: |
Repayment Mortgage |
| Explanation: |
A basic mortgage of capital and interest on the loan are paid off in monthly instalments. |
|
| Term: |
Repossession |
| Explanation: |
When the mortgage lender takes away your home because you have fallen too far behind on your mortgage repayments. |
| S |
| Term: |
Sole Agent |
| Explanation: |
When a seller chooses only one Estate Agent to sell their home. |
|
| Term: |
Sole Selling Agent |
| Explanation: |
When the vendor instructs one agent to act to sell their home and the agent receives their fee irrespective of whether or not they introduced the buyer during the term of their appointment. In other words, if you find the buyer privately, you still have to pay the agents fees. |
|
| Term: |
Solicitor |
| Explanation: |
A qualified Legal Professional who acts on behalf of the buyer or seller in the purchase or sale of your home. The solicitor will check the legal position of the house, carry out all the usual legal checks and oversee the exchange of contracts and completion between the two parties. |
|
| Term: |
Stamp Duty |
| Explanation: |
A government tax based on the purchase price of the property. (see my information page for the amounts involved). More tax! |
|
| Term: |
Structural Survey |
| Explanation: |
A thorough investigation of the property carried out by a qualified surveyor (RICS) for the purpose of checking the structural integrity of the property, wiring, plumbing, damp, etc. |
| T |
| Term: |
Title Deeds |
| Explanation: |
The document, which shows the ownership of a property. |
| V |
| Term: |
Valuation Survey |
| Explanation: |
A survey carried out by the lender for the purpose of the loan against the property. Often the lender will arrange the survey and bill the buyer. |
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