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Confused by property jargon? Here’s a comprehensive glossary of terms to help you.
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.
(See Estate Agents)
Annual Percentage Rate. The true cost of a loan.
Property sale. If you win the bid, you are legally bound to buy the house.
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Official who repossess your possessions or house if you cannot keep up on your mortgage repayments.
A place to go for Mortgages & Loans.
An expensive temporary loan to tide you over when having to buy your new house before selling your old home.
An intermediary who will give advice and offer a range of mortgages.
Another place to go for Mortgages & Loans
Insurance to cover any structural damage to your house.
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The sum borrowed in a mortgage.
This occurs when the seller needs the sale of their house to occur before they can complete the purchase of another property. The same situation may exist for others in the chain. As a result, the whole chain can collapse if one link breaks.
The term used for the security that the lender relies on when granting a mortgage.
The point when contracts have been exchanged and ownership legally passes to the buyer.
Insurance to cover any loss or damage to your possessions.
When two parties have made an offer on the same house. The vendor will sell to the first party to exchange contracts.
The legal documents needed to transfer the ownership of property.
Legal work involved in buying and selling a house.
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A new form of mortgage lender who deals solely over the telephone.
Expenses paid by the solicitor on behalf of the purchaser.
A reduced mortgage interest rate which is subtracted from the Standard Variable rate.
An Estate Agent who will reveal the seller's lowest asking price to the buyer in order to make a quick sale.
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Type of mortgage where monthly payments are made into a endowment (life assurance) policy. The loan is paid off in one lump sum at the end of the loan period.
Property agents who link up buyers and sellers. Estate Agents advertise houses & arrange viewings.
The initial sum you have to pay on an insurance claim.
The point at which buyer and seller are legally bound to the sale and purchase of the property.
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When the lender turns down your mortgage application after reading the surveyor's valuation report.
Absolute ownership of property and land.
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A common practice whereby the seller, having already accepted an offer from Party A, accepts a higher offer from Party B.
When the buyer blackmails the seller into accepting a lower offer just before contracts are about to be exchanged.
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Indemnity Guarantee Premium
The Mortgage Indemnity Guarantee Premium is a payment often demanded by a lender in order for them to lend.
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When the seller commissions two independent Estate Agents to sell their house
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Carried out by the solicitor to register buyer as the new owner of the house.
Document in which the owner of a freehold property lets out their premises to a named party at a certain price and for a specified time.
The ownership of a lease.
Charge passed on to the buyer by lender for arranging a loan.
The fees incurred by the lender when arranging a mortgage. These costs are passed on to the buyer.
A valuation of the proposed property carried out by the lender before agreeing to give out a mortgage. This is only a valuation survey. A separate full structural survey will be needed by the buyer.
An insurance policy which pays out a fixed lump sum on death of an individual. Life Assurance helps protect from financial difficulties.
A percentage expressing size of mortgage value of house. For example, House Value=£100,000, Mortgage Size=£90,000. Loan-to-Value=90%.
A search carried out by the solicitor to find out if there are any Local Authority Notices, with respect to the building itself (e.g. has it been condemned?), and the surrounding area (e.g. have plans gone through to build a motorway next to the house?).
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M ortgage Interest Relief At Source. Tax relief is deducted from interest payments on the first £30,000 of your mortgage. Phased out in April 2000.
A long term loan to fund the buying of a property.
The lender of a mortgage.
The house buyer who takes out a mortgage.
Period over which mortgage is to be repaid.
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When the value of your house falls to less than your mortgage. Over 1.5 million home owners have experienced this during the recent recession.
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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.
The monthly amount payable to an insurance policy.
The sum of the loan on which interest is calculated.
Insurance which covers injury or death to anyone on or around your property.
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When a mortgage if fully repaid.
Specialists in finding houses, raising finances, organizing surveys and completing negotiations.
A basic mortgage capital and interest on the loan are paid off in monthly installments.
When the mortgage lender takes away your home because you have fallen too far behind on your mortgage repayments.
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When a seller chooses only one Estate Agent to sell their home.
Legal Professional who acts on behalf of the buyer in the purchase of a house. The solicitor will check the legal position of the house, carry out a local authority search and oversee the exchange of contracts between the two parties.
A government tax. Currently the tax is 1% of the property's value, 2.5% for properties valued between £250k - £500k and 3.5% over £500k. Imposed only on houses valued above £60,000.
A report constructed by the surveyor detailing firstly, whether the house is structurally sound and secondly, listing the major/minor defects, (including the necessary work which needs to be done).
The person who carries out a structural survey of the property, examining the structure and general state of the house.
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The period in which a mortgage is taken out.
The legal right to ownership of a property.
The document which shows the ownership of a property.
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A survey carried out by the lender to ensure that the house's value is not less than the proposed loan. Often the lender will arrange the survey and bill the buyer. This cannot be used as a structural survey.
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