You know what it's like when you buy or sell a house. Many Estate Agents,
Building Societies and Solicitors bombard you with a variety of different "words" or
"phrases" associated to the house buying process that they understand, and use as a part
of their everyday language, - the question is do you understand? In many cases probably
not! So, to assist you with some of the jargon commonly used when buying or selling a
home we have listed them out in an A-Z format. You may find this section useful to print
out, and then have to hand, before embarking on what is going to be probably the "biggest
financial decision of your life"!
This stands for 'Annual Percentage Rate'
which is an interest rate intended to reflect the true cost of lending. It is always
higher than the interest rate as it takes into account how the interest is paid and the
costs of arranging the loan. All lenders must now quote an A.P.R. and it is a useful way
for you to compare different sources of finance.
A loan, often from a bank, to
enable the purchase to be completed before the sale of an existing property.
The people whose house sales and purchases
The moment a contract actually takes
effect. There is a completion date for both sale and purchase, as well as for the
Any legally binding agreement. On the
sale of a house there are two identical copies, one signed by the buyers and the other by
the seller. When exchanged, they are committed respectively to paying the purchase money
and to transferring ownership.
Legal work concerned with the
transfer of property.
A legal document which, instead of being
merely signed, is 'signed, sealed and delivered'. Property can only be transferred by a
deed. Title Deeds are those relating to the property's ownership.
The absolute ownership of property, as
opposed to leasehold. Most houses are owned freehold, whereas most flats are
Regular charges made for borrowing
Land registry charges
A government department in
Plymouth which keeps a register open to public search, of interest in land and property
in England and Wales, the title of which is unregistered.
Ownership of property for a fixed
number of years controlled by a lease which includes the power for the landlord to
collect ground rent.
A type of mortgage deed.
Strictly speaking, the rights over a
property given by one person (the Mortgagor or Borrower) to another (the Mortgagee or
Lender). More commonly it is used to mean the loan itself.
Mortgage indemnity policy
granting generally more than 75% of the valuation may require this sort of insurance
policy. Although it is you who pays the premium, its purpose is to protect the lender
against loss in the event of your failing to make payments. The premium is a one-off
payment at the start of a mortgage. The premium rates vary from about 6% to 10% of the
amount by which the loan exceeds the lender's normal loan limit. Sometimes the premium
can be added to the loan.
Mortgage protection policy
A policy designed to
give decreasing life insurance cover at a reasonable cost to a client who has a repayment
Payments made to an insurance company
on a policy.
Title which has been registered
at the Land Registry.
The action of completely repaying a
Searches are requests for information
from the Local Authority, the Land Charges Register and, if appropriate, the Land
Registry. The Local Authority search nearly always takes longest.
A duty payable to the Inland Revenue
on the whole of the purchase price for a home, where the purchase exceeds £125,000.
For purchases between £125,001 and £250,000, the duty payable is 1%. For
purchases between £250,001 and £500,000 the duty payable is 3%, and for
purchases over £500,001, the duty is 4%. Stamp duty is payable by the
Available on mortgage interest until
The right of ownership of a property.
An assessment of the value (and
general condition) of a property for mortgage purposes by the building society's
surveyor. It is not as detailed as a structural survey report. Most building societies
will give the client a copy.