- Advance -the amount of money that your lender agrees to lend you.
- Additional Mortgage Security Fee – an up-front, one-off premium paid to a broker usually when a mortgage exceeds 75% of the property value. It is in place to protect against defaulting borrowers.
- Appraisal – Similar to the term ‘valuation’, it is usually carried out by an estate agent to determine the current value of a property.
- APR (Annual Percentage Rate) – this is the amount of interest you will pay on your loan.
- AST (Assured Shorthold Tenancy) – It gives the landlord the right to claim their property back after a specific period of time.
- Auction – one of the quickest ways of buying a home. Exchange is seen as having happened when the auctioneer’s hammer comes down for the winning bid.
- Balance Outstanding – the amount of loan owed.
- Bridging Loan – a temporary loan given to help buy a new property before the existing one has sold.
- Break Clause/Release Clause – these terms are often used in fixed term tenancies.
- Buildings Insurance – this covers the cost of repair or rebuilding a property from scratch following structural damage or destruction.
- Building Society – a financial institution usually owned by its members which specialises in mortgage lending and savings accounts.
- BTL (Buy to let) – the purchase of property(s) for the specific purpose of letting it out.
- Capital and Interest Mortgages – also known as ‘repayment’ mortgages, these constitue of payment for both the loan amount and any interest inccured as a result of the mortgage loan.
- Chain – a number of property sales where exchange of contracts must take place at the same time, because they’re linked together.
- Chain Free – this is usually present whereby a buyer is not dependent on the seller finding another property first, before selling their property.
- Collateral – usually a security pledged against the repayment of the mortgage loan, in this case the property is usually used as collateral.
- Completion Date – the completion of the legal transaction, with the money and documents all distributed, and keys are released.
- Compulsory Purchase Order (CPO) – a legal order granting certain public bodies which need to obtain land or property the power to do so without the consent of the owner.
- Contents Insurance – covers accidental damage and theft of all moveable contents of your property.
- Contract – the formal agreement between buyer and seller, prepared by the solicitor or conveyancer, detailing the terms and conditions of the sale.
- Conveyancing – the legal work behind buying and selling properties.
- Covenant – the terms of any given tenancy agreement, including obligations of the tenant and the landlord.
- Deeds – the legal documents that assign ownership of property.
- Default – failing to make pre-arranged payments, in this case, missing mortgage payments.
- Deposit – the lump sum that the seller pays towards the cost of the property.
- Disbursements – expenses paid by the solicitor on behalf of the purchaser.
- Discounted Tracker Rate Mortgage – variable rate mortgage that is discounted for a period of time, based on the current interest rate set by the Bank of England
- Early Repayment Charge (ERC) – also know as an early repayment penalty (ERP), this is a charge made by the lender if the borrower pays off the mortgage before the end of the agreed term of the loan.
- Energy Performance Certificate (EPC) – measurement of the energy efficiency within a property on a scale of A – G (A being the most effecient and G being the least).
- Engrossment fee – this can be charged by a Solicitor for producing a final copy of a legal document such as a lease or conveyance, for signature by the parties.
- Equity – the difference between the value of a property and the amount of mortgage owed.
- Exchange of Contracts – this is the point at which the sale becomes legally binding and neither party can withdraw without financial penalties.
- Fixed Price – offers for the price shown only.
- Fixtures and Fittings – non-structural items included in the purchase.
- Flying Freehold – formed when part of a freehold proerty overlaps another piece of freehold property or land
- Freehold – ownership of the property and the land that the property is situated on.
- Full Structural Survey – this looks at the main features of a property, including walls, roof, foundations, plumbing, joinery, electrical wiring, etc.
- Gazumping – this is where the seller accepts one offer only to reject it later for a higher offer.
- Gazundering – this is where a buyer reduces their offer just before the exchange of contracts.
- Gas Safety Regulations – the regulations determining a landlords’ duties to make sure gas appliances and fittings provided for tenants are safe. Checks are to be carried out by an authorised CORGI register engineer.
- Ground Rent – ground rent is an annual sum paid by the leaseholder to the freeholder of a property.
- Guarantor – this is a person who will agree to guarantee that they will repay a loan or debt if you cannot pay it.
- HMO (House in Multiple Occupation) – They are treated differently to the average property, with more rules and regulations.
- Home Buyers Report – a comment of the structural condition of the parts of the house that are readily accessible.
- Home Improvement Agencies (HIAs) – help vulnerable, disabled or elderly homeowners on a low income to repair, improve, maintain or adapt their homes.
- Housing Association – this is a not-for-profit organisation that lets you buy a percentage of the property and pay the rest on rent.
- IFA – Independent Financial Advisor
- IMRO (Investments Managers Regulatory Organisation) – a regulatory body that governs the way in which investors’ money is handled and invested.
- Indemnity – policy or cover to protect against mortgage payment defaulting (Mortgage Indemnity Guarantee) or covering a defect withn this property (House Indemnity Insurance).
- Instruction – this is when a seller tells an estate agent to market a property.
- Inventory – an inventory is a list of all the contents of a property, as well as the condition of a property and the structural fixtures, generally used for AST rental properties.
- Joint Tenants – two or more people co-live in the property. If one were to die or leave, their share of the property passes to the other/s.
- Joint Agency – where two estate agents work together on marketing a property.
- Joint Mortgage – where more than one individual is responsible for the mortgage.
- Land Certificate – a land registry certificate proving ownership of property.
- Land Registry– the government organisation that holds records of all registered properties in England and Wales
- LAUTRO (Life Assurance Unit Trust Regulatory Organisation) – this is a self-regulating organisation responsible for regulating organisations offering life assurance and unit trusts as principals
- Leasehold – To be given ownership of a property but not the land that it is built on, normally requiring the payment of ground rent to the landlord.
- LTB (Let to Buy) – letting out your current residential property, in order to purchase a new residential property.
- LTV (Loan-to-Value) – the percentage of the loan amount in relation to the purchase value of the property e.g. if a property is £200,000 and the mortage amount is £160,000, then the LTV is 80%.
- Local Authority Search – a number of different searches to find out if there are any Local Authority Notices with respect to the building that you intend on buying and the surrounding area.
- Maintenance Charge – this is a charge made towards the upkeep of a leasehold property to the landlord.
- Mortgage Deed – a document that details the conditions of a mortgage secured on a property.
- Mortgage Offer – a letter from the lender offering you the loan and its conditions.
- Negative Equity – this is when the value of the property is less than the outstanding sum owed on a mortgage.
- No Sale, No Fee – a package provided by estate agents that indicates that a fee is only paid when the sale of the vendor’s home has been achieved.
- Offer – when you make an offer for a property, you put in a bid of the price that you’d like to pay for the property.
- OMV (Open market Value) – the sale value a property can achieve in the open market where the seller and buyer are both willing.
- Overpayment – this is simply paying more towards your mortgage repayment than the amount set by your lender. Depending on the set agreement, it can lead to a shorter or cheaper mortgage term.
- PCM – this stands for ‘Per Calendar Month’ and refers to the rent due each month on a rental property.
- Personal Equity Plan (PEP) – an investment scheme whereby personal investors could invest a limited sum each year in shares or unit trusts in British companies without liability for tax on dividends or capital gains
- Public Liability Insurance – insurance that provides indeminity against death or injury to anyone in or around your property.
- Referencing – process of checks carried out on behalf of a landlord to ensure potential tenants are who they say they are and are able to commit to the letting requirements in place.
- Repayment Mortgage – monthly repayments pay off the capital and the mortgage/loan.
- Repossession – if you fail to repay your mortgage, then the lender can repossess the property and sell it to make back the debt.
- Right to Rent – recent goverment legislation that make it a legal duty to check that any prospective tenants are living in the UK legally and have the right to rent.
- RTB (Right to Buy) – the right for a tenant who has lived in a council-owned property to purchase it at a discounted rate (usually based on the tenancy length).
- Searches – checks of local council records for planning applications and restrictions.
- Shared Ownership – usually provided by housing associations, this scheme allows first-time buyers the chance to purchase a share of property between 25% and 75%, and then pay rent on the remaining share. More shares can be purchased if offered till full ownership is gained.
- Solicitor – this is a legal professional who acts on behalf of the buyer or seller when a property is to be sold or purchased. They ensure all legal obligations and checks concerning the property is carried out, contact all the relevant local authorities, handle the transfering of the monies and oversee the exchange of contracts and completion between the parties.
- Stamp Duty – a government tax paid by the buyer on completion of the sale.
- Subject to Contract – a term associated with an agreement to purchase a property before the exchange of contracts.
- Survey – an inspection of a property made by a qualified surveyor. This can be a valuation report, a homebuyers report and full structural survey.
- Tenancy Agreement – also known as rental agreement, this is the terms and conditions of a tenancy.
- Tenants – people living in a property owned by a landlord.
- Title – the legal right to ownership of a property.
- Transfer Deeds – document from the Land Registry that transfers legal ownership from seller to buyer.
- Under Offer – this is when the seller has accepted an offer on their property but the contracts have not been exchanged yet.
- Vendor – also known as the seller
- Vetting – process of performing a background check on someone before processing as potential buyers or sellers
- Verbal offer – a verbal offer by the buyer for a property (not legally binding)