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APR

 

 Stands for ’Annual Percentage Rate’ which helps you compare the cost of different mortgage deals. It takes into account the  amount of interest you will pay, the length of the term of the mortgage, and certain other charges such as any arrangement  fee.

 

Bank of England Base Rate

 

 This is also known as the Bank of England’s rep rate. This is announced from time to time by the Bank of England’s Monetary  Policy Committee.

 

Bankers Draft

 

 A guaranteed payment of funds.

 

Bankruptcy Search

 

 An investigation carried out by the Land Charges Registry to check if a purchaser is or has ever been bankrupt. Most  mortgage  lenders will insist on this search being carried out.

 

Buildings Insurance

 

 What you must have to protect your property against hazards such as fire, flood and subsidence.

 

Buildings Survey

 

 This is a technical report following an inspection of the property. It will give you a comprehensive account of the condition of  the property, describing any structural or other defects.

 

 Chain

 

 The parties involved in a transaction i.e. Mr A buying from Mr B buying from Mr C (here there are 3 in the chain).

 

Completion date

 

 The date when the transaction relating to the sale/purchase of a house are completed. The date you move/become the  owner.

 

Completion statement

 

 A financial statement from the Conveyancer, Property Lawyer or solicitor detailing all financial transactions. The statement  includes all costs.

 

Conditions of sale

 

 The terms by which the buyer and seller agree to buy/sell the property. The Law Society sets standard conditions. The  lawyer sets  special conditions.

 

Contract

 

 The legally binding agreement specifying all of the detail of the house sale or house purchase. The contract legally commits  both the  buyer and the seller to the transaction. The house seller’s Conveyancing Property Lawyer draws up two copies of  the same  contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are  exchanged.

 

Conveyance or transfer

 

 The legally binding document that transfers the rights and burdens and the benefit of the land.

 

Covenants

 

 Rules and conditions affecting a property contained in the Title Deeds or Lease.

 

Deeds

 

 Legal title document which provides historical information about the property. Since October 2003 the Land registry have  "dematerialised" deeds, This means that instead of the old style Land Registry Certificates or Deeds that the record of your  ownership merely consists of a copy of the Land Registry computer record which condenses all the relevant information.

 

Deed of Variation

 

 This is a document which is sometimes required in leasehold transactions correcting the legal defects in the lease and is  signed by  both the occupier of the property and the freeholder.

 

Disbursements

 

 Out of pocket expenses paid by the Licensed Conveyancer or solicitor on the buyers behalf such as stamp duty, land registry  charges and search fees.

 

Draft Contract

 

 A contract drawn up for both parties to consider amendments of.

 

Early Redemption Charge

 

 A charge on borrowers from lenders for paying off a mortgage before the agreed time.

 

Easement

 

 A right given to the house owner over an adjoining property (e.g. right of way)

 

Encroachment

 

 An object, such as a fence, which belongs to one property and which extends onto another illegally.

 

Engrossment

 

 The actual deed or document that is executed (signed), as opposed to a mere draft of it.

 

Equity

 

 The owners’ equity in a property refers to the value of the money invested in the property that is not owed as a loan.

 

Equity Release

 

 Enables the owner of a property to generate either a lump sum or a regular income in return for allowing a lender to take  ownership of a portion of the property.

 

Exchange Contracts

 

 Once both parties have agreed upon contracts, they are exchanged. The transaction between the seller and the buyer  becomes  legally binding, and a date for completion is set. A deposit is required to be paid at this stage.

 

Fixtures & Fittings

 

 A list of the items at the property, which are either included or excluded from the agreed price.

 

FSA

 

 The Financial Services Authority is an independent government body concerned with consumer protection in the financial  market.

 

Gazumping

 

 When a seller accepts a higher offer on a property having previously accepted a lower offer from another potential buyer.  Common in a market with rising property prices.

 

Gazundering

 

 When a buyer withdraws an offer and replaces it with a lower offer after the first offer had been accepted and acted upon  by the seller. Common in a market with falling property prices.

 

Greenbelt

 

 Land protected by the government, on which new developments cannot be built.

 

Ground Rent

 

 Commonly charged on properties such as flats - particularly leasehold ones. It is charged by either the landlord or leaseholder.

 

Indemnity Insurance

 

 An insurance taken out by Conveyancing firms to cover losses to clients arising from errors or fraud in dealing with their matters.

 

Land Registry

 

 A government department that registers all the details of any land transactions and issues of ownership in both England and Wales.

 

Land Registry Fees

 

 Registering the title of a property under the name of an individual incurs a charge. This is usually dealt with by the solicitor/conveyancer.

 

Lease

 

 A legal document containing the rights and covenants on behalf of both the Landlord and the Tenant that regulate the use of the property.

 

Leasehold

 

 The owner does not own the title to the property outright, but for a fixed period of time.

 

Legal Charge

 

 A document securing the debt on the property, for example, the monies the buyer borrows from the Bank of Building Society to purchase a property.

 

Local Searches

 

 An investigation of the records held by the Local Authority to find out any important information that may affect the property. These are usually carried out by the solicitor/conveyancer and are valid for approximately 3 months.

 

Mortgage

 

 A loan issued by lenders to purchase a property.

 

Mortgage Advance

 

 The money loaned to the buyer, by the lender.

 

Mortgage Deed

 

 This document explains the conditions of the mortgage and is signed by all parties to the loan.

 

Mortgage Indemnity Guarantee

 

 An insurance policy designed to protect the lender against any loss in the event of the borrower defaulting or ceasing to  repay the  mortgage. Common on first time buyer mortgages where the loan required is a high percentage of the total value  of the property.

 

Mortgagee

 

  The lender

 

Mortgagor

 

  The borrower

 

Negative Equity

 

  When the value of a property falls to less than the mortgage taken out to buy it.

 

NHBC

 

  A governing body for developers who issue a 10 year structural guarantee on all new properties. Their inspectors will ensure  that a new home is built properly and is safe.

 

Office Copy Entries

 

 Certified copies of the Land or Charge Certificate from the Land Registry.

 

Off-Plan

 

 When an individual buys a new home before it has been built based on the plans and artist’s impressions.

 

Redemption Fee

 

 Even when a mortgage is paid-off early in accordance with its rules and outside the redemption period, a charge can be levied by the  mortgage provider, even if the new mortgage is taken out with that same lender.

 

Redemption Penalty

 

 An additional charge made by the lender if the mortgage is repaid within a pre-agreed period of time.

 

Redemption Statement

 

 The amount to be repaid on the existing mortgage.

 

Registered Land

 

 The database of land/property on the register held at HM Land Registry.

 

Remortgage

 

When an existing mortgage on a property is paid off in full and another mortgage is taken on the same property.

 

Retention

 

 Monies withheld by lenders until certain mortgage conditions are met, i.e. the completion of repairs or improvements to the  property that the lender has insisted on.

 

Seller’s Leasehold Information Form

 

 A form used by some solicitors/conveyancers which is filled in by the property’s current owners to outline the terms and conditions  of the leasehold agreement.

 

Seller’s Pack

 

 A new government proposal aimed at speeding up the home buying process and thereby reducing the length of time in which  gazumping is possible. This information dossier will become a mandatory requirement of anyone putting their home on the market.  It will include a basic surveyor’s report and the results of local authority searches - both of which are currently the buyer’s  responsibility. It is not proposed that Seller’s Packs will be compulsory until June 2007.

 

Seller’s Property Information Form

 

 A form which is used by some solicitors/conveyancers which is filled in by the property’s current owners outlining issues such as  boundaries and guarantees of works carried out (e.g. dry rot).

 

Service Charge

 

 A charge levied on a property’s owner for the maintenance and insurance of communal areas. Usually only applicable to flats and  maisonettes.

 

Stamp Duty

 

 A duty paid to the government upon purchase of a property. The current charges are as follows:-

 

 Up to £125,000 £125,001 to £250,000 £250,001 to £500,000 £500,001 +

 No charge 1% of the property price 3% of the property price 4% of the property price

 

Subject to Contract

 

 An agreement upon which contracts have not exchanged yet, and therefore not legally binding.

 

Telegraphic Transfer

 

 The electronic transfer of money between two parties on the sale / purchase of a property. Will often incur a fee from your solicitor  and monies sent from a lender are usually in this form.

 

Unregistered Land

 

 Land / property not yet held on the database at HM Land Registry.

 

Vacant Possession

 

 The previous occupants must vacate the property before the new occupants move in. This includes any tenants.

 

Vendor

 

 The seller

 

Valuation

 

A simple survey carried out on a property for the benefit of the lender. Because the report is carried out for the lender, if the surveyor makes a mistake you have no legal claim against him.

 

Yield

 

Refers to the financial income from an investment. The income yield on an investment is the annual dividend or interest payment, multiplied by 100 and divided by the market price.

 

Yield – Net

 

Rate of return on an investment after subtracting all expenses, such as commissions, costs of purchase, and taxes.

 

Yield – Gross

 

The return on an investment before deducting costs or losses incurred in procuring and managing the investment.