You might like to know…
During your search for a home you may have questions that you’d like to
ask or you may have come across a word or phrase you’re unsure of. So
we’ve prepared a glossary and a list of answers to questions we’re asked
most often. And if you need any other information that we’ve not covered
within this site, then please contact us and we'll respond to your request
as quickly as possible.
Glossary
Advance
Money lent on the security of a mortgage.
Arrangement Fee
The charge some lenders make for providing a mortgage.
Bridging Loan
A short-term loan enabling the borrower to bridge the gap between buying
his or her new property and selling the old one.
Buildings insurance
Insurance for the bricks and mortar of your home.
Completion
The final step in the sale and purchase process in England and Wales,
where the keys and title deeds are exchanged for the purchase price of
the home.
Contract
The legal agreement between a seller and a buyer of a property which
describes the details of the property and the terms agreed.
Conveyancing
The legal and administrative process of transferring ownership of a flat or
house from one person to another.
Covenant
A restriction or condition affecting the property which must be observed or
performed by it's owner or occupier.
Credit Check
Assessment of your income and financial status by a potential lender.
Date of Entry
In Scotland, the date on which the buyer takes possession of the property.
Deposit**
A percentage of the full purchase price, which is paid by the purchaser on
exchange of contracts. This is normally 10% in England and Wales but may
be less by negotiation.
Disposition
In Scotland, the document which transfers legal ownership of a property to the buyer.
Engrossment fee
This is the fixed charge for the final copy of the transfer/lease and is paid by the purchaser.
Enquiries before Contract
Prior to the purchaser signing a contract, a collection of detailed questions
regarding the property may be asked which need to be answered in full
before contracts are exchanged. These may also be called Preliminary Enquiries.
Equity
The value remaining on a property after all sums relating to any mortgage have been deducted.
Exchange of Contracts
The moment when, in England and Wales, a contract for the sale or purchase
of a property becomes legally binding. Contract documents are signed by
both parties. Can also be known as Unconditional Exchange of Contracts.
Factor
A professional property manager in Scotland who performs the same function as a management company in England and Wales.
Feu
A plot of land or property in Scotland.
Feuar
The owner of a plot of land or property in Scotland.
Feudal
The title to property is generally feudal in Scotland, meaning that ownership can be for an indefinite period.
Freehold
The outright and absolute ownership of land and any property which stands on it applicable in England and Wales.
Ground Rent
A payment of rent (usually relatively nominal) made at specific times as required under the terms of the lease.
Independent Financial Adviser
An independent person who advises on a wide range of mortgage sources, schemes and other financial matters.
Land Registry
A government body which maintains records of land and property ownership. There is a Land Registry for England and Wales and one for Scotland.
Land Registry Fee
A fee paid to the Land Registry to register ownership of a property. Your solicitor will pay this and add it to your bill.
Lease
An agreement by which an owner rents land and or buildings to another for a specified period of time in consideration of a rent payment.
Leasehold
The interest created by a lease.
Legal Completion
The date on which the buyer takes possession of the property.
Local authority search
A search, payable through your solicitor, of local authority records to confirm the status of the property and issues which may affect or benefit the property.
MIG
Mortgage indemnity guarantee. An insurance payable to the lender that
covers the extra risk if lending a large proportion of the value of your home
(often required when exceeding the normal maximum mortgage advance).
The premium for this policy is then paid by the borrower.
Mining search
Similar to a local search and intended to establish whether the property you are purchasing is affected by mining works, past or present.
Missives
In Scotland, the name given to a contract.
Missives, Conclusion of
In Scotland, the equivalent of exchange of contracts.
Mortgage
A loan for which a property is the security.
Mortgage interest
In return for the loan that has been advanced on your property by the lender,
you will pay a certain sum in interest. The rate of this interest can be affected
by the economic conditions prevailing at any given time, unless the mortgage
rate is fixed.
Mortgage offer
A formal written offer laying out the terms of a mortgage loan.
Mortgage Protection Policy
Insurance policies that can be taken out against a mortgage that will ensure
that, in the event of your death, the full outstanding amount of the loan will be paid off.
Mortgage rate
The level of interest charged by lenders on house purchase loans.
Mortgage Term
When a mortgage is arranged, it will be for a fixed time period.
Mortgage Valuation
A professional assessment of the value of the property as it stands at time
of inspection for mortgage purposes, made by a person nominated by the
organisation that has received the mortgage application. The fee for the
valuation is paid by the borrower.
Mortgage, Fixed Rate
A set rate of interest on a loan for a set period. The initial attraction is that the
rate normally undercuts the prevailing standard rate, but the risk is that the
rate could fall, leaving you locked into an uncompetitive deal.
Mortgage, Variable Rate
With variable rate loans, the mortgage interest rates and monthly payments can change depending on the base set by the Bank of England.
Mortgagee
Any person or organisation who lends money for the purpose of mortgage, i.e. Building society, insurance company, bank or private individual.
Mortgagor
This simply means the borrower.
Solicitor's fees
The professional fees a solicitor charges for carrying out the conveyancing process.
Stamp Duty Land Tax
Transfers of property ownership incur a Government levy. The rates currently payable are:
£0 - £125,000: Nothing Payable
£125,001 - £250,000: 1% of full purchase price
£250,001 - £500,000: 3% of full purchase price
£500,001 or greater: 4% of full purchase price
Figures are subject to change according to Government legislation. Different figures apply if a property is in a disadvantaged area.
Subject to contract
This period during which the sale is agreed, but there is not yet a binding legal contract; either party could still back out with no legal comeback.
Telegraphic transfer
The electronic transfer of funds, the costs of which will be added to your solicitor's charges, usually as a disbursement.
Title
The legal ownership of property or rights which a person has to a property.
Title Deeds
The documents giving evidence of title (ownership of rights).
Transfer document
The document which transfers legal ownership of a property.
Vendor
This simply means the seller.