GLOSSARY OF ESTATE AGENT JARGON

A

Advance

A mortgage loan.

APR (Annual Percentage Rate)

The total cost of a loan, including interest charges and product fees, shown as a percentage rate. The calculation is worked out over the full term of the mortgage. APR is an industry standard and means you can compare mortgages easily.

Arrangement Fee

This is a fee that might be involved when you apply for a mortgage.

B

Bank of England Base Rate

The Bank of England sets a rate each month called the 'Base Rate'. Banks and building societies use this to set their interest rates.

Bridging Loan

A temporary loan to help a buyer purchase a new property before they have sold their last one.

Buildings Insurance

Insurance against the complete cost of rebuilding a property in the event of structural damage, by fire, flood or storm.

C

Capital and Interest Mortgage

Another term for Repayment Mortgage.

Cashback Mortgage

When you complete the mortgage you receive a lump sum in cash.

Charge

A mortgage or some other debt secured against the property.

Completion (Date of Entry in Scotland)

The date that ownership is transferred.

Contract

The details of the agreement between seller and buyer in a legal document.

Conveyancer

A licensed person who may conduct conveyancing, who is not a solicitor.

Conveyancing

The paperwork and legalities of transferring the property from seller to buyer.

Covenant

Something within the Title Deeds or lease, that the buyer has to comply with, normally applied to all future owners of the property. A restrictive covenant stops the owner from doing something.

D

Deeds

Legal documents showing who owns a property.

Deposit

Usually around 5-10% of the total property cost this is the proportion the buyer puts up together with the rest of the mortgage loan.

E

Early Repayment Charge

If you pay off the mortgage early, there may be a charge for it.

EPC

Energy Performance Certificate.

Equity

The balance between the value of a property and the amount of the mortgage. This can be in credit or can be Negative Equity, where you owe more than the difference.

Exchange of contracts

This is where the vendor and buyer sign their copies of the Contract. The exchange is performed by their respective legal representatives and it is legally binding.

F

Fixed rate mortgage

A mortgage where the interest rate payment is fixed for a certain time.

Fixtures and Fittings

Anything in the house non-structural, open to interpretation and negotiation between buyer and seller.

Freehold

Legal title that gives you total ownership of the land your property is on, rather than leasehold.

Full Structural Survey

This covers all the main features of the property, including foundations, walls, roofing, plumbing, electrics etc.

G

Gazumping

When you lose your property to another buyer who has bid more.

Gazundering

This is where the buyer suddenly offers less than the agreed price just before exchanging contracts.

Ground Rent

If you are not the freeholder you will pay a fee called Ground Rent to the party that is.

Guarantor

Your guarantor backs up your mortgage, agreeing to pay it if you can't.

H

Higher Lending Charge

Usually applied to mortgages where the borrower is arranging a mortgage for 90% or over.

Home Buyers Report

A less detailed survey than the Full Structural, and arranged by the mortgage lender.

Home Information Pack (HIP)

A document pack covering all important information relating to a property, including boundaries, planning permissions, energy efficiency etc. As of 21 May 2010 HIPs were suspended by the government and are no longer required. However Energy Performance Certificates (EPCs) are still required.

I

IFA

Independent Financial Advisor.

Interest Only Mortgage

This is where you only repay the interest on your mortgage debt each month. Usually supported by another repayment investment such as a pension or endowment.

L

Land Certificate

A Land Registry certificate showing who owns a property.

Land Registry

A government department which holds all records of registered properties in England and Wales.

Land Registry Fee

You pay this to the Land Registry to register if you have bought a property.

Leasehold

You own the property but not the ground it is on. The ground belongs to the Freeholder.

Local Authority Search

A search of the local geographical area to highlight anything planned such as road building, new developments etc.

Loan to Value (LTV)

The amount of mortgage shown as a percentage of the property value. So if your mortgage amount was £160,000 and your property is valued at £200,000 your LTV is 80%.

M

Monthly Interest

What the interest is on your mortgage each month.

Mortgage Deed

A legal document outlining the mortgage lender's hold on the property.

Mortgage Payment Cover (MPC)

Insurance in case you can't make your mortgage repayments.

Mortgage Term

The length of a mortgage term - normally 25 years.

N

Negative Equity

When your outstanding mortgage is more than the value of the property.

P

Planning Permission

You need planning permission to make any structural changes to a property. The Planning Department at the local council grants this.

Private Sale

A property sold without using an estate agent.

R

Remortgage

A new mortgage with a different lender, often of a high value to release equity in the property.

Repayment Mortgage

Also known as a Capital and Interest mortgage. Your monthly payments cover both interest, and part of the capital sum.

S

Sole Agent

Where a vendor only works with one estate agent to sell the property.

Stamp Duty

This is a tax you must pay on a property when you buy it, paid on completion.

Subject to Contract

This is used to show that agreements are not yet legally binding and have yet to be agreed for the contract.

Survey

A report on the property you are buying.

Surveyor

Person who carries out a survey.

T

Title

This shows who actually owns the property.

Total Amount Payable

The total cost of repaying a mortgage.

Tracker Mortgages

Tracker mortgages follow the base rate set by the Bank of England rather than agreeing a fixed rate of interest.

Transfer Deeds

Land Registry document that transfers legal ownership from vendor to purchaser.

Transfer of Equity

Adding or removing some to or from a mortgage.

U

Under Offer

When the vendor provisionally accepts a buyer's offer.

V

Valuation

This identifies whether the value of the property is worth the amount of mortgage requested.

Valuation Fee

The charge for the Valuation.

Vendor

The person selling the property land.

W

Without Prejudice

Any correspondence marked 'Without Prejudice' means it cannot be used in a court of law.