Jargon Buster
For help with understanding any key words and phrases used within our website, please use the jargon buster provided below.
A
Arrangement Fees
A fee charged by the mortgage lender to arrange a loan.
Amenities
A feature that increases attractiveness or value, especially a property or a geographic location such as restaurants, cafes, shops and transport facilities.
B
Basic Variable Mortgage Rate
Mortgage lender's standard rate of interest which may be increased or decreased periodically by the lender depending on prevailing economic conditions.
Bridging Loan
A temporary loan providing financial cover which allows a purchaser to complete on the purchase of a new property before selling the previous property.
Building Survey (formerly full structural survey)
A full inspection of the property to be purchased, conducted by a chartered surveyor, who then writes a detailed report including any property defects. This type of survey is usually recommended for older properties and those which have been poorly maintained. Also for properties which have been extensively altered or extended.
Buildings Insurance
Insurance required by mortgage lenders to cover damage to your home (eg. In the event of a fire).
Buy To Let Mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out.
C
Chain
The situation that occurs when a buyer is reliant upon completion of the sale of his existing property, in order to complete on the purchase of his new property.
Completion
The point at which all transactions concerning the property’s sale are concluded and legal transfer of ownership passes to the buyer.
Contents Insurance
Insurance to cover any loss or damage to your possessions within the property.
Contract
A legal agreement between the seller and buyer of a property which binds both parties to complete the transaction
Conveyancer
A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.
Conveyancing
Traditional term for the legal work involved in the purchase and sale of a property.
D
Deeds
Legal title documents which prove legal ownership of a property. The deeds will be held by the mortgage lender.
Deposit
A sum of money (usually 10%) paid by the buyer on exchange of contracts.
Detached
Term used to describe a property that stands alone and is separated from all others.
Development
A newly built residence or an older property which has been refurbished and modernised.
Disbursements
Fees paid by the buyer's solicitor on the buyer’s behalf such as stamp duty, land registry and search fees.
Draft Contract
Preliminary, unconfirmed version of the contract issued by the seller’s conveyancer to the buyer’s conveyancer.
E
Endowment Mortgage
Interest-only repayments combined with monthly premiums into an endowment policy designed to pay off the loan at the end of the term.
Equity
The difference between the value of a property and the amount of mortgage owed.
Exchange Of Contracts
The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at the agreed price.
Excess
An amount the policy holder must pay towards each and every incident of loss and damage when making an insurance claim.
F
Fixed Rate Mortgage
A mortgage in which the interest rate is set for an agreed period of time.
Fixtures & Fittings
All non-structural items included in the purchase of a property.
Flexible Mortgage
An arrangement whereby you can increase or decrease your mortgage repayments.
Freehold
Technical word for the ownership of the property, meaning that it belongs to the owner without limitation of time.
G
Gazumping
This is when a seller accepts a higher offer from a third party on a property that they have agreed to sell to someone else, but have not yet exchanged contracts.
Gazundering
When a buyer offers the seller a lower offer just before contracts are about to be exchanged.
Ground Rent
The annual charge made by the freeholder to the leaseholder as a right to occupy a property.
Guarantor
The lender may sometimes require a borrower to appoint a guarantor. This is a third party who promises to pay the borrowers debt if the borrower defaults.
H
Homebuyer's Survey
This is a survey report, which is not as detailed as a structural survey, carried out by a chartered surveyor to assess the state of a property and its value.
I
IFA
Independent Financial Advisor.
Interest-Only Mortgage
There are 2 types of mortgage, interest-only or capital repayment. Interest-only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment vehicle are paid monthly. At the end of the term, the proceeds from the investment vehicle are intended to repay the mortgage. The amount will depend on the performance of the investment vehicle. If you choose an interest only mortgage you will be responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
Inventory
A list which describes the condition of furnishings and contents of a leased property at the commencement of the tenancy in order that any dilapidation during the tenancy can be identified.
J
Joint Tenants
A form of ownership for two parties whereby if one of them dies, their share of the property will automatically transfer to the remaining party, giving them full ownership (regardless of the terms of the deceased owner's will.
L
Land Registry Fee
A fee paid to the Land Registry to register ownership of a property.
Lease
A legal document which the freeholder issues which grants tenure fir a given period of time.
Leasehold
Denotes that the ownership of the property is by way of a lease.
Lender’s Arrangement Fees
Charge passed on to the buyer by the lender for arranging a loan.
Lender’s Legal Fees
The fees incurred by the lender when arranging a mortgage. These costs are passed on to the buyer.
Listed Building
A building officially listed as being of special architectural or historic interest, which cannot be demolished or altered without (local) government consent.
Loan To Value (LTV)
The size of the mortgage as a percentage of the property’s value.
Local Authority Search
Procedure whereby a buyer's solicitor makes an enquiry to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area
M
Maintenance Charge (or service charge)
The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder.
Maisonette
A property arranged over more than one floor (ie: a portion of the house).
Mortgage
An amount of money advanced by a lender such as a bank or building society on the security of a property and repayable over a long period.
Mortgage Deed
A legal document relating to the mortgage lenders interest in the property and containing the terms of the mortgage
Mortgage Rate
The standard variable interest rate quoted by all mortgage lenders which normally varies with the Bank of England base rate. All discounted rates are based on this mortgage rate.
Mortgage Term
The period of time over which (repayment mortgage) or at the end of which (endowment mortgage) the loan is to be repaid.
Mortgagee
The lender of a mortgage (ie: bank or building society)
Mortgage Agreed In Principle
An expression of a mortgage lender's willingness to enter into an agreement subject to other conditions being met, such as credit checks and a satisfactory property valuation.
N
Negative Equity
When the value of the property falls to less than the outstanding mortgage.
O
Offer
A sum of money that the buyer offers to pay for a property.
Open Market Value
The price a property would achieve when there is a willing buyer and willing seller.
P
Payment Break
An option on flexible mortgages that allows you to stop making mortgage payments for up to 6 months.
Penalties
Costs that may be incurred if the borrower repays the loan too early or switches between lenders
Premium
The monthly amount payable for an insurance policy.
R
Re-Mortgage
Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to draw down any equity gained by a rise in value.
Repayment Mortgage
A mortgage repaid by way of monthly repayments of capital combined with interest.
Repossession
When the mortgage lender takes possession of your property due to non-payment of the mortgage.
Redemption
This is the term used when a mortgage is paid full.
S
Search
A request or enquiry for information concerning the property held by a local authority or by the land registry.
Semi-Detached
A property which is joined to one other house.
Sole Agent
When a seller chooses only one estate agent to sell their home.
Solicitor
Legal expert handling all documentation for the sale or purchase of a property.
Stamp Duty
A tax paid by purchasers of properties with a value in excess of £120,000, of between 1% and 4% depending on value.
Studio Flat
A flat consisting of one main room or open-plan living area incorporating cooking and sleeping facilities and a separate bathroom/shower room.
Subject To Contract
Words to indicate that an agreement is not yet legally binding.
Surveyor
Professionally-qualified expert who carries out the survey.
T
Tenancy
A temporary possession of a property by a tenant.
Tenancy Agreement
A legal agreement designed to protect the rights of the tenant and landlord and setting out all the terms and conditions of the rental arrangements.
Tenant
A person who has temporary possession of a property.
Tenants In Common
A form of ownership by two or more people in which if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other(s).
Tenure
Conditions on which a property is held (ie: length of lease).
Terraced House
A property which forms part of a connected row of houses.
Title Deeds
Documents showing the legal ownership of a property.
Transfer Deeds
The land registry document that transfers legal ownership from seller to buyer.
U
Under Offer
The status of a property for sale, when a seller has accepted an offer from a purchaser but prior to exchange of contracts.
V
Valuation
A figure that an agent will place on a property once the required surveys have been completed.
Valuation Survey
A survey that must be carried out on behalf of the mortgage lender to establish the amount and terms of the loan.
Y
Yield
Income from a property calculated as a percentage of it's value.