| Beneath is a list of terms
that are associated with and are used during the sale, purchase or
letting of a property.
A
ABSTRACT OF TITLE
A document prepared by the Vendor’s solicitor. This relates
to unregistered land proving that the Vendor does indeed own the
land. Futhermore that any previous mortgages have been paid and
settled.
ADDITIONAL ENQUIRIES
These are extra enquiries over and above the agreed enquiries contained
in the standard property information form which a conveyancer deems
it absolutely necessary to raise with a seller's conveyancer.
ADVANCE
Another term used for describing a mortgage loan.
AGRICULTURAL PLANNING RESTRICTION
An agricultural restriction is a freehold covenant that restricts
the occupancy of a property to those engaged in agriculture. Agricultural
restrictions may have inheritance tax planning implications should
you need further advice contact your financial advisor or we can
arrange for Knowlden
Titlow to further explain the implications for you. For a call
back click here.
ANCIENT COVENANT
A restrictive covenant preventing certain work to a property which
may have been imposed hundreds of years ago. It can be possible
to take out insurance against such a covenant being enforced.
APPORTIONMENT
Expenses that need to be apportioned or shared between the purchaser
and vendor of a property. Such as utility bills or services. The
company doing your conveyancing should offer advice on how finalise
any payments owed.
ARCHITECT'S CERTIFICATE
Issued by an architect and confirming their overseeing of the construction
of a building. These are particularly important if you are buying
a one off self build property or similar as mortgage lenders are
unlikely to lend on a new-build house without evidence of this certificate
or an NHBC Guarantee.
ARRANGEMENT FEE
A fee charged on occasion for the arrangement of a mortgage by the
financial company you deal with or the mortagage company.
ARREARS
When any mortgage payments due are not paid on time and the agreed
payment by the borrower to the lender falls behind the agreed schedule.
ASSIGNMENT
A term used to describe the transfer of ownership of an insurance
policy or a lease.
AUCTION
At 'auction' the sale of a property is agreed to the highest bidder
on the day, subject to the amount exceeding any reserve placed on
the property. Buyers are then required to sign a contract on the
day and pay a deposit immediately. If you would like us to arrange
this for your own property please contact us here.
B
BALANCE OUTSTANDING
The amount of loan/mortgage that remains owed at a particular time.
BANK OF ENGLAND BASE RATE
The Bank of England set a percentage rate each month known as the
'Base Rate'. Mortgage companies, banks and building societies use
the Base Rate to set interest rates based on this figure when you
pay on deposits, or charge on debts/mortgages.
BRIDGING LOAN / BRIDGING FINANCE
A temporary loan advanced to a buyethat enables them to purchase
a new property before they have sold their own property.
BUILDING REGULATIONS
The health and safety requirement that any new, extended or altered
property construction must meet. Prior to any owner of a property
carrying out extension work, alterations or structural changes,
building regulations need to be obtained from the local authority
giving their approval for the work to commence.
BUILDINGS INSURANCE
Insurance against the cost of rebuilding a property from scratch
following structural damage, for example by flood, fire or storm.
This has to be in place in order to secure a mortgage.
BUY TO LET
A type of mortgage tailored for investors who are buying a property
with the sole intention of then renting or letting it out.
C
CAPITAL GAINS TAX
A government tax payable on any profit realised at the time of the
disposal of the asset. Owner occupied properties are normally exempt
from Capital Gains Tax. Whereas any other property that is not the
main home address of the owner may be subject to this tax on disposal
of the asset.
CASHBACK MORTGAGE
You receive a lump sum or an agreed percentage of your mortgage
in cash when you complete on your purchase of a property. For more
information click here and we can contact you
with more information.
CCJ
County Court Judgement, issued against anyone who has defaulted
on loan or mortgage payments, or has bad debts. They are taken out
against them by the courts, which could prevent that person from
obtaining a mortgage offer. If you have had a CCJ issued against
you and have had difficulty arranging a mortgage why not see if
we can help and click here. If you want to see your
credit history click here.
CHATTLES
The legal definition of chattels is property of any kind other than
freehold land. Usually this will mean your moveable items such as
furniture or personal possessions.
CHARGE
An interest in the ownership of a property; usually a mortgage or
some other debt secured against the property.
CHARGE CERTIFICATE
A certificate from the land registry detailing any 'charge' on the
property.
CHIEF RENT
Similar to 'ground rent'. It refers to the payment of a small sum
of money in rent payable by the owner of a freehold property to
the Lord of the Manor. Chief Rent was payable indefinitely but may
nowadays be redeemed by a lump sum payment.
CONDITIONS OF SALE
Added details that determine the rights and obligations of the purchaser
and vendor.
CONTENTS INSURANCE
Insurance against accidental damage or theft of all moveable contents,
including furniture, appliances and soft furnishings.
CONTRACT
A legally binding document that describes and facilitates the agreement
under which the property will change hands. This agreement between
two parties is approved by both sides and their legal advisors,
and sets out the agreed terms and conditions by which both sides
proceed toward completion.
CONTRACT RACE
A scenario in which a vendor has received and also accepted two
or more offers on their property. They (the vendor) then choose
to sell to whichever prospective purchaser is ready to exchange
contracts first.
CONVEYANCER
Legal expert handling all documentation for the sale and purchase
of a property.
CONVEYANCING
The legal process associated with transferring property from one
party to another, usually managed by a solicitor or a licensed conveyancer.
Want to know how much they charge click here
for a free quote?
COMPLETION DATE
The final day of a sale when the final balance of the purchase money
is paid. This is the day the property changes from the vendors ownership
into your ownership and you are able to take possession of the property.
COVENANT
A condition, contained within the Title Deeds or lease, that the
buyer must comply with, which is usually applied to all future owners
of the property. A restrictive covenant is one that prohibits the
owner from doing something.
CREDIT SCORING
Lenders will often use 'credit scoring' to help them decide whether
or not to lend to you. They ask a series of questions about you
and your finances and score your answers. Depending on your score
you will be accepted or declined. To check your credit history click
here.
D
DEEDS
The term used to describe the legal documents that show who owns
a property or piece of land.
DEPOSIT
A sum of money that a buyer puts down to secure the mortgage loan
after exchange of contracts, usually 5 to 10 per cent of the purchase
price. Some mortgages can offer 100% of the amount needed to buy
a house.
DISBURSEMENTS
All the various costs for carrying out the varied legal work in
relation to buying or remortgaging your home.
DISCHARGE
Paying off a mortgage and clearing any outstanding debt on the mortgage.
DISCOUNT MORTGAGE
A discount mortgage offered by mortgage lenders to borrowers, reducing
monthly mortgage repayments. This is often for the first two or
three years of the loan period and thereafter the amount may increase.
E
EASEMENT
A term used to describe a legal right over land, for example the
right to access a specified area of land, such as a right of way
or access.
EQUITY
The difference between the value of a property and the amount of
mortgage and/or secured loans owed.
EXCHANGE OF CONTRACTS
This is the moment when the contract finally becomes legally binding
and a completion date is agreed and fixed. The buyer usually pays
a deposit at this point and the date of completion is agreed.
F
FIXTURES & FITTINGS
All non-structural items included in the purchase of a property.
FREEHOLD
Legal title that gives you absolute ownership of the land your property
is on.
FULL STRUCTURAL SURVEY
A full structural survey carefully look at and then reports on all
the main features of the property, including walls, roof, foundations,
plumbing, joinery, electrical wiring, drains, and garden. A surveyor
will then pass this report on to a mortgage company as well the
purchaser.
G
GAZUMPING
When a vendor pulls out of a progressing sale having accepting a
higher offer from another purchaser. The buyer is 'gazumped'.
GAZUNDERING
Is when a purchaser offers less than the agreed price just before
exchange of contracts.
GROUND RENT
The annual fee which a leaseholder pays to a freeholder.
GUARANTOR
A guarantor is someone who guarantees to pay your mortgage if you
can't pay the agreed amount for any reason.
H
H.M. LAND REGISTRY
The central government body set up in 1925 for the purpose
of recording up to date records of ownership and details of the
land itself.
HOME BUYERS REPORT
This is an intermediate-level survey that can be offered to a purchaser
by the mortgage lender. They will often instruct surveyors from
a panel of surveyors approved by the mortgage company. The homebuyer's
report still reports in part on the structural condition of the
property, it does however, only report on areas that are readily
accessible. It does not involve thorough or in-depth investigation
of the testing of water, drainage or heating systems etc.
HOME ENVIROSEARCH
A report on the detailed flood, subsidence and land contamination
history for each UK neighbourhood.
I
INCOME MULTIPLES
A term used to describe the amount a mortgage company may
choose to loan directly related to a mutiple of a borrows income.
J
K
L
LAND CERTIFICATE
A Land Registry certificate proving ownership of a property.
LAND REGISTRY
A government organisation that holds records of all registered properties
in England and Wales.
LAND REGISTRY FEE
A fee paid to the Land Registry to register your details if you
have bought a property or changed mortgage lenders.
LEASEHOLD
To be given the ownership of a property but not the land it is built
on. This normally requires payment of ground rent to the landlord.
LOCAL AUTHORITY SEARCH
A search of the local area to reveal anything that may impact on
a property or its surrounding area, e.g. planned road building,
planning permissions that will or may affect the property in the
future etc.
LOAN TO VALUE (LTV)
The amount of mortgage expressed as the percentage of the property
in questions value. For example, if your mortgage amount was £80,000
and your property is valued at £100,000 your loan to value
would be 80%.
M
MORTGAGE DEED
A legal document relating to the mortgage lender's interest in the
property.
MORTGAGE OFFER
A document issued by the mortgage company to a borrower at the time
of them attaining full approval of their mortgage application.
N
NEGATIVE EQUITY
When the value of the mortgage left outstanding on the property,
is more than the current market value of the property.
NHBC
National House Building Council. A warranty scheme for new build
properties providing cover against major structural defects for
a period of 10 years.
O
OMBUDSMAN
An independent professional body which is set up by law to help
settle individual disputes between consumers and firms, for example,
estate agents, solicitors and insurance companies. We are proud
members of this scheme. For their website click here.
OUTLINE PLANNING PERMISSION (OPP)
Where the local planning authority has given its consent for building
to take place at some point in principle. Full planning consent
will still need to gained before a person is able to start building.
P
PLANNING PERMISSION
The permission granted by the local planning authority (usually
the local council) for any new building or engineering operations
or change of use of a building if it meets the public's interest.
R
RETENTION
Holding back part of a mortgage loan until any repairs the mortgage
company insist on at the property are satisfactorily completed.
RESTRICTIVE COVENANT
A restrictive a covenant (see covenant) is a covenant that prohibits
the current and possibly the future owners from doing something.
i.e. trading from a premises, selling alcohol or selling in the
future a section of land associated with the property for financial
gain etc.
S
SOLE AGENCY
The description given when a vendor signs a contract with a single
estate agent to act on their behalf.
SOLICITOR
Legal expert handling all documentation for the progression of a
sale and purchase of a property.
STAMP DUTY
A tax you must pay on a property when you buy it. The duty must
be paid at the point of completion. Tax charged by government when
buying a property for £120,000.01 or more. Between £120,000.01
and £250,000.00 you must pay 1% of the whole purchase price.
Between £250,000.01 and £500,000.00 you must pay 3%
£500,00.01 and above 4%
SUBJECT TO CONTRACT (STC)
Words to indicate that an agreement to buy or sell is not yet legally
binding.
SURVEY
A thorough report on the property you are planning to buy
SURVEYOR
The person who conducts a survey.
T
TENANTS
People living in a property they pay a rent for and do not own.
TENANCY IN COMMON
A form of ownership by two or more people in which, if one dies,
their share of the property forms part of their estate and does
not automatically pass to the other(s).
TITLE
The record of ownership of a property, the evidence of title is
found in the title deeds.
TITLE DEEDS
Legal documents that prove the ownership and or other matters that
affect property or land.
TRANSFER DEEDS
A Land Registry document that transfers legal ownership from seller
to buyer.
TRANSFER OF EQUITY
Adding or removing a party to/from a mortgage.
U
UNDER OFFER
A term given to a property by an estate agent when the seller has
provisionally accepted the buyer's offer and sale proceedings are
started.
V
VALUATION
A valuation of the property for mortgage purposes to ensure that
the property is worth the amount requested for a mortgage
VENDOR
The seller of a property or piece of land.
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