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Annual Percentage Rate (APR)

The annual rate that is charged for borrowing or made by investing money. It is expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.

Appraised Value

The value of a property as estimated by a surveyor.

Appreciation

Appreciation is the increase in value of a property over time due to inflation and supply and demand.

Arrangement Fee

A fee charged by lenders for a specific mortgage product.

Asking Price

A price at which a seller hopes to sell their property.

Asset

Any form of property owned by a person.

Assignment

The transmission of ownership of an insurance policy or lease.

Auction

The sale of a property to the individual or party that bids highest.

Bridging Loan

A short term loan normally used to cover or 'bridge' the overlap between the purchase of a new property and the sale of an old one.

Building Survey

A full inspection of a property, conducted by a registered surveyor who will generate a detailed report setting out the situation of a property and any defects.

Buying off Plan

When an individual buys a property based only on what they can see on the building plans.

Buy-to-Let Mortgage

A type of mortgage specifically designed for people buying a property with the intention of letting it out.

Capital

The amount of money either put into buying a property or the deposit placed on a property. Also known as equity.

Capped-Rate Mortgage

A capped mortgage is similar to a fixed rate in that it will not rise above a pre-determined rate, known as the cap.

Chain

The situation that occurs when a buyer is reliant on completion of the sale of an existing property in order to complete on the purchase of a new property.

Commission

The estate agent's fee that is taken for selling a property.

Completion Date

The completion date is the day on which money is transferred from the buyer's to the seller's solicitor. It is the date that the buyer becomes the legal owner of the property.

Completion

When the transfer of the property title is legally given to the new owner. This is the final step in a sale.

Conditions of Sale

The fine points that determine the privileges and duties of the seller and buyer.

Conveyancer

A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.

Conveyancing Fee

The fees incurred and charged by your solicitor or conveyancer for supervision of the sale or purchase of your home; including the fee for their time plus any additional charges incurred for Land Registry or Local Authority Searches.

Council of Mortgage Lenders (CML)

The Council of Mortgage Lenders devised the Mortgage Code to ensure lenders treat customers fairly and reasonably.

Covenants

Rules and regulations governing a property, contained in its Title Deeds or Lease.

Deeds Release or Discharge Fee

The fee charged by lenders at the end of a mortgage term to cover the organisational costs of transferring the property ownership documents to the borrower.

Deeds

A formal legal document that clearly lays out the parties to the deed. It is carried out with a suitable attestation clause and signed in the presence of an independent witness.

Depreciation

A reduction in the value of an asset with time.

Disbursements

Fees paid by the buyer's solicitor on the buyer's behalf. This may include stamp duty, land registry and search fees.

Discharge

The paying off of a mortgage.

Discount mortgage

A discount rate mortgage is a mortgage which has a discounted interest rate for an agreed period of time. As this is a variable rate mortgage, the interest rate can go up or down during the discount period.

Early Repayment Charge (ERC)

This is a penalty charged on non-flexible mortgages when the loan is repaid in full within a set period. Usually it applies on a pro rata basis when capital repayments are made outside of the agreed monthly payments.

Endowment Mortgage

An endowment mortgage is a mortgage loan arranged on an interest-only basis where the capital is intended to be repaid by one or more endowment policies.

Equity

The difference between the price of a property sold and the loan on it.

Exchange of Contracts

The point at which signed contracts are exchanged, legally binding the seller and buyer to the sale and purchase of a property at the agreed price.

Financial Services Authority (FSA)

An independent regulatory body that monitors the financial services industry in the UK.

Fixed Rate Mortgage

A mortgage in which the interest rate is set for an agreed period of time.

Fixtures and Fittings

All non-structural items built-in to the purchase of a property.

Flexible Mortgage

A deal whereby you can increase or decrease your mortgage.

Flying Freehold

Flying freehold is a UK legal real-estate term to describe a freehold which overhangs another freehold property, or which is situated beneath another.

Freehold

Where the owner of the property also owns the land on which it is built.

Gazumping

Gazumping is the refusal to formalise a property sale agreement at the last minute, usually in order to accept a higher offer.

Gazundering

This is where the buyer lowers his offer on the property after agreeing a price. This can only happen before exchange of contracts.

Ground Rent

The annual fee levied by the leaseholder to the freeholder.

Guarantor

The lender may sometimes require a borrower to appoint a guarantor. This is someone who agrees to pay the borrower's liability if the borrower cannot pay. A guarantor is someone who agrees to pay the rent on behalf of the tenant if they are unable to meet payments, this is usually agreed in writing when the tenancy agreement is signed.

Higher Lending Charge

A higher lending charge (HLC) is a charge made by mortgage lenders in the UK when the loan-to-value ratio of a mortgage is higher than they are prepared to accept at standard rates.

Homebuyer Survey

A standard report that is generated to evaluate any critical repairs to a property.

Household Insurance

An insurance policy that protects against loss or damage to the property caused by fire, natural causes or acts of vandalism.

Household Insurance

An insurance policy that protects against loss or damage to the property caused by fire, natural causes or acts of vandalism.

IFA

Independent Financial Advisor.

Inflation

The general rise in prices over time.

Interest Charges

The charges that banks make on a loan, calculated as a percentage of the amount borrowed.

Interest Only Mortgage

A type of mortgage in which the borrower only repays the interest on the loan for the duration of its term and repays the full loan amount at the end of the mortgage period.

Joint Income

The total gross income of more than one borrower in a joint mortgage.

Joint Tenants

A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time. If more than one person own the same property, they are referred to as co-owners, co-tenants or joint tenants.

Land Registration

Land registration generally describes systems by which matters concerning ownership, possession or other rights in land can be recorded (usually with a government agency or department) to provide evidence of title, facilitate transactions and to prevent unlawful disposal.

Land Registry Fee

The fee payable for the above.

Lease

A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time, after the expiry of which ownership may revert to the freeholder or superior leaseholder.

Leasehold

Land or property held under a lease.

Legal Charge

A mortgage on the property.

Lender's Arrangement Fees

A charge passed on to the buyer by lender for arranging a loan.

Lender

A party, typically a bank, building society or mortgage company offering the loan.

Listed Building

A listed building in the United Kingdom is a building that has been placed on the Statutory List of Buildings of Special Architectural or Historic Interest. It is a widely used status, applied to around half a million buildings.

Loan to Value (LTV)

Ratio between the loan on a property and its value or sales price.

Local Authority Search

A search of the local area to highlight anything that may affect the property or surrounding area, such as planned road building and planning permissions.

Mortgage Agreement in Principle

A phrase referring to a mortgage lender's willingness to enter into an agreement subject to other conditions being met. This may be more commonly known as an MAP.

Mortgage Arrangement Fee

A fee charged directly to an individual by a mortgage broker or lender. The fee is usually charged on an hourly basis.

Mortgage Broker

Someone who advises buyers on the types of loans available to them. They will often helps to process any subsequent application.

Mortgage Deed

The binding legal document that confers ownership or title to a property.

Mortgage Payment Protection (MPP)

An insurance designed to pay your monthly mortgage for a limited period (usually a year) if you are unable to work through illness, disability or redundancy.

Mortgage Rate

The rate of interest charged by a mortgage lender.

Mortgage Term

The period of time over which a mortgage loan must be repaid.

Mortgage Type

This may be a fixed, variable, capped, discount, or tracker.

Mortgage Valuation

A detailed report generated by your lender to make sure the property has been correctly valued.

Mortgage

An amount of money advanced by a lender on the security of a property and repayable over a period of time.

Mortgagee

The lender of a mortgage (i.e. bank or building society).

Negative Equity

Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan.

NHBC scheme (National House-Building Council)

A type of building guarantee available on some newly built homes under which defects occurring within a specified time after construction are remedied.

Offer of a Loan

A formal document approving the mortgage you have requested and detailing the Terms and Conditions that will apply.

Office Copy Entry

Certified copies of the Land or Charge Certificate from the Land Registry.

Open Market Value

The price a property should achieve when there is a willing buyer and willing seller.

Payment Break/Holiday

A option on some mortgages that allows the payer to stop making mortgage payments for a set period of time.

Penalties

A specified charge that is levied by the lender under certain circumstances, usually for full or part repayment within a specific period linked to a discount, tracker, fixed or other product type.

Peppercorn Ground Rent

A nominal periodic rent usually paid annually.

Planning Permission

When property owners have sought permission from the local authority to make changes to a property.

Preliminary Enquiries

A set of questions that are raised by the purchaser's solicitor and sent to the vendor via his solicitor prior to exchange of contracts. They ask for clarification of specific points about the property that is being sold and the vendor's ownership of it.

Principal

The amount of debt outstanding (excluding interest).

Property Price Survey

Information that reflects price ranges of properties across the UK.

Public Liability Insurance

Insurance which covers injury or death to anyone on or around your property.

Purchaser

A person who is buying a property.

Redemption

To ‘redeem’ or fully repay a mortgage.

Re-mortgage

Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to take advantage of any equity gained by a rise in value.

Repayment mortgage

A mortgage in which the monthly payments include repaying both the interest and a portion of the capital borrowed.

Repossession

When the mortgage lender takes possession of a property due to non-payment of a mortgage.

Retention

A situation where a lender may hold back (retain) part of a mortgage until certain conditions are met.

Sale Contract

A agreement with an estate agent.

Search

Research on planning and ecological matters retained by a local authority.

Selling price

The price at which an owner wishes to achieve through the sale of their property.

Share of Freehold

The tenure of a commercial property or flat. Typically, the division of one large commercial unit or block of apartments results in the creation of leases and leasehold property, with one freeholder who retains absolute right over the property and land.

Sole Agent

When a seller gives only one estate agent the rights to sell their property.

Sole Occupancy

A property that is occupied (lived in) only by the mortgage applicant(s) and their direct family.

Solicitor

A legal expert that is qualified to handle the legalities of selling or buying a property.

Stamp Duty Land Tax

When an individual purchases a property in the UK, this is the tax they must pay to the UK government.

Standard Variable Rate (SVR)

A variable rate mortgage or floating rate mortgage is a mortgage loan where the interest rate varies to reflect market conditions.

Sum Insured

An amount for which an individual has insured their property or items.

Survey

A report describing the condition of a property.

Surveyor

A professional person qualified to estimate the value and condition of land and property.

Tenure

Conditions on which a property is held (i.e. freehold or leasehold).

Title Deeds

This is the legal document that not only identifies the owner of a property but also other details about the property and the land it is built on.

Title Insurance

An insurance policy which a buyer can take out to allow a sale to complete where there is a potential problem with the documentation in proving legal ownership of some part of the land they are buying.

Title Search

The title, plan documents, dealings and covenants recorded at the Land Titles Office which identify the legal title and restrictions of use relative to a property

Tracker Mortgage

A tracker mortgage is a variable-rate mortgage where the amount of interest paid on the loan is linked to the Bank of England base rate by a fixed differential.

Transfer Deeds

These are documents which when signed transfer the legal ownership of a property to another person.

Value

The price of a property under normal conditions, i.e. when the buyer is not forced to buy and the seller not forced to sell.

Variable Base Rate

The basic rate of interest charged on a mortgage. This may change with market conditions, meaning monthly payments can go up or down.

Vendor

The person selling a property.

Yield

Profit from a property calculated as a percentage of its value

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