Advance
Another word for mortgage. You may also find reference to ’principal sum’ and ’capital sum’, which also refer to the mortgage, as does the term legal charge’.

Agency Fees
This is the percentage or fixed fee paid to the Estate Agent if they sell your property for you. There are several different agency agreements.

Appointing an Estate Agent
This means the same as instructing. Its used in phrases ‘have you appointed a solicitor?’ or ‘estate agent’ to sell your property. In short-form organised!

Assignment
Certain items, such as leases and endowment policies cannot legally be sold, only assigned or reassigned. It amounts to the same thing: ownership is transferred in return for payment.

Bonuses
In the context of an endowment policy, it is the bonuses that will give you the profits at the end of the term. This is why it is important not to cash in an endowment in the early years.

Building Survey
This means a full survey on the condition of your property (in other-words a check). It is useful when buying a property which is older, large or of a non-standard construction or a property which has been modified or extended.

Buyer
A person looking for a property to purchase or who is currently purchasing a property.`

Capped Rate
The interest rate charged on this type of mortgage will not rise above a certain level – the cap – within a certain period.

Chain
There is most often a chain in house buying and selling, for example a first time buyer who starts the chain, the seller of that property is moving to another property and so the chain continues until someone ends

Charge
A charge against a property means that there is a debt. Usually the main charge will be that of the mortgage lender. However individuals can place charges against a property following a County Court Judgement. Before buying, a conveyancer should check against the Land Registry’s Charges Register for all charges, as the new owner will be liable if they are not discharged prior to sale.

Completion Date
The day upon which all moneys are paid and the keys are handed over.

Contract Deposit
A sum of money paid upon contracts being exchanged. Usually 5% to 10% of the contract purchase price. If selling another property at the same time, it might be possible to pass onto your vendor the contract deposit that your purchaser pays to you. Check this with your solicitor.

Conveyancing
The process of transferring the ownership of property from one person to another.

Covenant
A legally enforceable written promise relating to property documents, including leases. A restrictive covenant may bar certain activities such as extending a property. In leases, covenants may require floors to be carpeted so as to reduce noise levels for others, for example.

Deeds
The legal papers which state ownership of the property. If you have a mortgage the Lender usually holds the deeds. This ensures that if you default on your payments, they can take back ownership of the property.

Deposit Monies
This is normally paid when contracts are exchanged. It may also be referred to as the down payment made on a new property. It is normally 5% for properties under £99,999 and 10% for properties £100,000 and over but can vary depending on what is agreed.

Detached Property
A property, which is, free standing and not attached to any property to the left or right of the building.

Discounted Rate Mortgage
A mortgage with a variable interest rate but discounted for a set period.

Disbursements
This is a term used by Solicitors for their charges in carrying out the legal work for buying and selling property (Conveyancing).

Disposable income
Income that is left after paying your mortgage, life assurances/pensions and other living expenses.

Draft Contract
The document that is prepared by the vendor’s solicitor setting out the Title for the property that is to be sold together with the terms of sale.

Early redemption penalty
Where a mortgage is for a fixed or capped rate of interest, or where it is discounted, there is usually a penalty to pay in the event that the mortgage is repaid before a set period of time.

Easement
The right of one person to use someone else’s property in certain circumstances. These usually occur where there is a need for access roads, drainage, telephone lines over another’s property.

Endowment Linked Mortgage
The borrower pays interest only to the mortgage lender. The Endowment is a form of life assurance policy with a built-in investment element that is designed to pay off the principal sum when it matures. It should be noted, however, that endowments are not guaranteed to be worth enough to pay off the principal sum on maturity.

Equity
The net value of a mortgaged property after the deduction of charges/mortgages.

Exchange of Contracts
Once the parties are satisfied that the Title is good and all of the other terms of the sale/purchase are understood and the necessary funding is in place, then both parties sign their part of the contract. Following this each solicitor sends their client’s part to the other side’s solicitor. Signing a contract does not bind a party to a sale or purchase. But once contracts are exchanged then the transaction becomes legally binding. On exchange of contracts the purchaser is responsible for buildings insurance.

Fixed rate
The interest rate is fixed at a certain level for a specific number of years. After that interest is charged at the variable rate unless the lender agrees to another period of fixed interest at the rate that is appropriate at that time.

Fixtures and Fittings
These are items within the property, for example light switches, radiators, towel rails etc. Make sure you are very clear about what will be left at the property. Your Solicitor/Conveyancer will be given a list of fixtures/fittings, which the Vendor will have filled out.

Freehold Property
One that is held without any time limit.

FTB
First time buyer.

Gazumping
Raising the price of a property or accepting a higher offer after having accepted an offer from a potential purchaser.

Gazundering
Lowering the amount of an offer to a vendor, usually just before exchange of contracts.

Ground Rent
This is usually charged on properties such as flats usually leasehold flats. The Landlord or Leaseholder makes this charge.`

Guarantor
Someone who guarantees another’s mortgage payments. If the borrower is unable for any reason to repay their mortgage, the guarantor will have to make the payments on their behalf, or possibly face having any property they put up as security repossessed by the lender.

HM Land Registry
A Government owned department, which registers all details of any land transactions and issues to do with ownership in England and Wales.

Homebuyer Survey
A professional surveyor will carry this out. It is a report telling you the details regarding the condition of a property.

House Doctor
An American idea and a recent import to the UK- someone who has expertise in presenting residential property to the market in order to make it more appealing to potential buyers. The intention is, of course, to boost the property’s value. This relies upon the fact that most of us totally lack imagination but know what we like when we see it!

Interest only mortgage
With this type of mortgage interest payments only are made to the lender. The loan itself is paid by an investment plan into which regular payments are made. This will be designed to pay out when the mortgage is due to end. Professional advice should be sought if considering this method of repayment.

(ISA) individual savings account
A tax-free investment scheme that has replaced Peps (Personal equity plans).

ISVA
The Incorporated Society of Valuers and Auctioneers.

Joint tenancy
When two or more people own a property in common, and wish the share of any one who dies to pass automatically to the survivor(s). In contrast, see ’tenancy in common’.

Land Charges Search (charges stated below might vary according to the local authority)
Local authorities carry out official local LAND charge searches for solicitors and licensed conveyancers on behalf of purchasers. These searches are on the land as described or marked on a plan as submitted. Most searches for residential properties are “standard” ones. These reveal the local land charges register items – developments, extensions planned to neighbouring property, highways changes immediately affecting the property (if any). There are a further 22 optional enquiries which may be asked for an additional £6 (approx.) each and for a fee of £15 (approx.) the council will answer further questions as required. A further option would be to search on the adjoining land and the fee for an extra parcel (submitted at the same time as the search) would be £10.20p (approx.).

Land Registry
The Government department responsible for keeping and updating details of all registered properties. ‘’Office copies’’ containing details of ownership and charges are readily available in writing and, nowadays, also available online to subscribers.

Lease
A contract for the occupation of a property.

Leasehold
Denotes that ownership of a property is by way of a lease.

Lessee
Leaseholder – the owner of a leasehold property.

Lessor
Landlord – the person who grants a lease and enforces its terms.

Link Detached
This is where a property is linked to neighbours via the garage

Loan-to-value
The ratio that expresses the size of loan that can be borrowed as a percentage of the valuer’s valuation of the property. For example, most lenders will grant up to 95% of their valuer’s estimate of its value – the remaining 5% deposit to be found by the borrower. Some lenders will advance 100% of loan to value, but usually charge a higher interest rate.

Mews
A building which was originally used for keeping horses but is now usually converted into dwellings. They are normally situated in a courtyard or along a short narrow lane.

MIGP
Mortgage Indemnity Guarantee Premium. This is an insurance policy designed to protect the lender from any loss of money if your home is repossessed and sold for less than the value of your mortgage. You may have to buy this insurance when you take out the mortgage if you have a large loan-to-value ratio – usually if you are borrowing more than 75%. MIG can be expensive, often costing more than £1,000. Some lenders spread the premium over the term of the mortgage, others make no charge for it. Although you may pay for this insurance, any money that is paid out by the insurer goes to the lender.

Mortgage Offer
The formal offer of mortgage defines the amount that is to be paid together with all other terms of the loan, including the term and initial interest rate etc.

Multiple Agency
When several agents’ market property and the one that sells it receives the commission.

NAEA
The professional body for estate agents – The National Association of Estate Agents.

Net Profits
A self-employed person’s income is taxed according to their net profit after deducting legitimate business expenses. The amount that a self-employed person might borrow is usually calculated according to the level of their net profits. Thus, a creative accountant who succeeds in reducing a client’s tax liability might also inadvertently reduce the borrower’s borrowing ability.

Office Copy
Entries For every land transaction in England and Wales, the Land Registry records details of ownership and charges onto a certificate called the ÔOffice copy’. Whereas every transaction once might have entailed having to examine a pile of old transfers in order to establish good title, today the certificate from the Land Registry significantly reduces the amount of investigation that is necessary and, thus, the chances of error.

OEA
The Ombudsman for Estate Agents – the independent Government-backed body that exists to protect the public from rogue estate agents. Only 25% or so of UK estate agents are members. Check that you are dealing with an OEA member before complaining. If you want to make a complaint against a non-member then the OEA will not be able to help!

PIA
Personal Investment Authority – from March 2000 this will be known as FSA – the Financial Services Authority.

Preliminary Enquiries
Important questions asked by the buyer’s solicitor of the vendor’s solicitor before contracts are exchanged.

Additional Enquiries
A buyer’s solicitor sometimes needs clarification of answers provided to Preliminary Enquiries, or they may simply think it appropriate to ask extra questions.

Replies to Preliminary and Additional Enquiries
The vendor’s solicitor’s replies to the questions raised. Often it will be necessary to ask a vendor to assist in responding.

Purchaser
Someone who is looking for a home to purchase or who is in the process of purchasing a home.

RICS
The Royal Institution of Chartered Surveyors.

Removals – British Association of Removers
An organisation for removal companies. Most Estate Agents have a list of removal companies.

Right of Way
This is an area of land such as a path or driveway, which the general public may cross whenever they wish.

Self-Certification
Commonly for self-employed people with a large deposit but limited earnings track record. (Inaccurately) known as a “non-status” mortgage. Some lenders will accept the applicant’s assessment of their net profits.

Seller
A person(s) selling a property.

Semi-detached
A property, which is attached to another one on one side only.

Service Charge
A charge for maintenance and insurance of communal areas, which is normally only applicable to flats.

Sole Agency
This means an agreement to sell your property through one agent only, usually for a fixed period e.g. 12 weeks

Stamp Duty
A tax paid by the purchaser. Currently there is no Stamp Duty for purchases up to £60,000; 1% of the contract purchase price between £60,001 and £250,000; 3% of the total contract purchase price if it is between £250,001 and £500,000; and 4% of the total purchase price where the contract sale price is £500,001 or above.

Subject to Contract
For the entire period between a sale/purchase being agreed and exchange of contracts, the transaction remains “subject to contract” which means that it is not legally binding upon either party to proceed to exchange of contracts. Either party is legally entitled to withdraw or amend the terms of the agreement for any reason.

Survey
This is a check on a property’s condition. A survey is useful when buying a home, which is old or of non-standard construction, extended or modified etc. There are three types of survey, one a Homebuyer, Valuation Survey and a Full Structural Survey.

Surveyor
A professional person who can act on your behalf to assess the condition of a property. Surveyors should belong to either the RICS of ISVA.

Tenancy in Common
If one person dies, his or her property rights pass on according to their will.

Term Insurance
A form of life insurance taken out exclusively for the period of a mortgage to protect the lender in case of the death of the borrower. This is an inexpensive form of insurance, however there is no investment element built into it. Thus, if the insured person lives then there will be no return on the premiums paid.

Title
This is the right to ownership of a property. Title Deeds are the documents conferring ownership of land or property. In the vast majority of cases, where the land is registered, the Title Deeds will be the Land Certificate or the Charge Certificate issued by the Land Registry.

Valuation/Value
An estimated price that your property is worth.

Vendor(s)
A person(s) who is selling a property.

11