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||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.
||Lenders sometimes charge a fee to cover the work involved
in setting up your mortgage or for certain mortgage rates.
||The amount of loan owed at a particular time.
|Bank of England base rate
||This is also known as the Bank of England's repo rate. This
is announced from time to time by the Bank of England's Monetary Policy
||A temporary loan advanced to help buy a new property before
the existing one has been sold.
||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.
|Capital and interest
||Also known as a repayment mortgage. Your monthly payments
gradually pay off the money (capital) you've borrowed, and also cover
interest on the amount outstanding.
||Your interest rate won't go above a certain level - the
'cap' - during the capped rate period. This means that you can enjoy any
rate reductions, yet have the comfort of knowing that your rate won't go
above the cap.
||Certain mortgage products offer cashback, which means you
get a cash lump sum when you enter into the mortgage to spend on anything
|CAT standard mortgages
||The Government has laid down CAT standards - fair Charges,
easy Access and decent Terms - to help people identify mortgages which
meet minimum standards. If a mortgage is described as meeting the CAT
standards it doesn't mean that it is 'Government approved' or necessarily
right for you.
||A number of linked property sales where exchange of
contracts must take place simultaneously.
||A mortgage deed which lenders (building societies, banks
etc) require borrowers to sign. It is registered against the property
until the loan is repaid and the charge is removed.
||An official document issued by the Land Registry to the
owner of a registered charge as proof of ownership. It includes a copy of
the register and the original charge.
||An annual charge on freehold property found in certain
parts of Britain. The chief rent is payable by the freeholder in
perpetuity although the amount cannot be increased.
||The date when the purchaser and vendor complete the sale of
land or property. The purchaser pays the balance of the purchase price and
the vendor gives possession to the purchaser.
||A formal agreement between the buyer and the seller,
usually prepared by a solicitor or licensed conveyancer, detailing the
terms and conditions of the sale.
||A deed which transfers freehold land which is unregistered.
||The legal work involved in buying and selling properties.
||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.
||With this method of calculating mortgage interest, it is
charged on the amount of mortgage outstanding from day to day. This means
lenders take into account any changes in the amount you owe on a
||Legal documents assigning ownership of a property and/or
||The money you pay on exchange of contracts as part of your
initial contribution to the purchase of your home.
||The fees paid by your solicitor, such as Stamp Duty, Land
Registry and search fees on top of conveyancing.
||You have to pay this to some lenders for releasing their
hold over a property once you've paid off your loan.
||This means interest is charged at the variable base rate
that applies to the mortgage, less a discount for a set period. The rate,
and your monthly payment, will vary - up or down - whenever the variable
base rate changes, but will remain below the variable base rate during the
discounted rate period.
||Unconfirmed version of the contract.
|Early redemption charge
||A charge made by the lender if the borrower terminates a
mortgage in advance of the terms of the particular mortgage. Normally
occurs when the borrower has benefited from reduced payments or cash back
in the early period of a mortgage.
||When the draft deeds to a property are approved they are
engrossed for the vendor and purchaser to sign.
||The difference between the amount you owe on your mortgage
and the current value of your property.
|Exchange of contracts
point at which the sale becomes legally binding from which neither party
can withdraw without financial penalties
||Most mortgage lenders lending money to enable someone to
buy their home would require a first charge. This means the lender has
first call on any funds available from the sale of the property to clear
the outstanding mortgage debt.
||A rate of interest guaranteed not to change over a fixed
period of time.
|Fixtures and fittings
||All non-structural items included in the purchase of a
||A freehold interest in property means absolute ownership,
although technically all land is held from the Crown.
|Full structural survey
||A full structural survey looks at all the main features of
the property, including walls, roof, foundations, plumbing, joinery,
electrical wiring, drains, and garden.
||When you borrow extra funds against the value of your home.
The loan is added to your main mortgage and your payments recalculated.
||The practice by a seller accepting a higher price than that
previously agreed with someone else.
||The practice by a buyer lowering his offer just before
exchange of contracts.
||The annual fee which a leaseholder pays to a freeholder.
||Someone who guarantees to repay your mortgage if you can't
borrow enough to buy the home you want. Parents, for instance, may act as
guarantors for their children when they buy their first home.
|Home buyers report
homebuyer's report comments on the structural condition of most parts of
the property that are readily accessible, but does not involve in-depth
investigation or the testing of water, drainage or heating systems.
||The way lenders work out how much you can borrow, usually
by multiplying your gross annual salary. We usually lend up to 3.25 times
salary or 2.5 times combined salaries if buying jointly. We take into
account your personal circumstances when deciding how much you can borrow.
Get an instant quote using our mortgage calculator.
||When a seller instructs an estate agent to market a
||You only pay interest to your lender throughout the
mortgage term and your mortgage balance doesn't reduce. At the same time,
you put money into a separate investment which should grow and pay off the
mortgage as scheduled. You must make sure you keep premiums up to date on
any mortgage investment products.
||Individual Savings Account. A tax efficient shelter for
investments in stocks and shares, life assurance and cash. Can be used as
a way of repaying an interest-only mortgage.
||Where two estate agents work together to market a property.
||Land document issued by the Land Registry to the owner of
registered land as proof of ownership. It includes a copy of the register
and the plan showing the extent of the land.
||The Land Registry is a Government agency responsible for
the registration of title to land. Registration enables the sale of land
and property to take place without the laborious and expensive exercise of
checking through title deeds.
|Land registry fee
||Your conveyancer pays this on your behalf to register your
details in the Land Registry records once you've bought a property or
changed your mortgage lender.
||A formal application for an inspection of the Land Registry
register. A certificate is issued showing the current situation of the
land in question.
||To be given ownership of a property but not the land it is
built on. This normally requires payment of ground rent to the landlord. A
leasehold is normally offered for either 999 years, 99 years or shorter
||A form of insurance by which someone's life is insured.
Life assurance policies can run parallel with a repayment mortgage, so the
mortgage will be repaid if you die before the end of the term.
|Local authority search
||Part of the conveyancing process when you buy a property,
carried out by your conveyancer. It gives details of any matters which,
from the local council's point of view, affect the property. It reveals
any proposed changes to the local area, such as road improvements, and
details any planning permission given for the property.
||A questionnaire sent to a local Authority by a purchaser's
solicitor to verify whether a property is affected by planning proposals,
tree preservation orders, etc.
||Loan to value is the proportion of the value or price of
the property (whichever is the lower), that you borrow on a mortgage. For
example, a £63,000 mortgage on a house valued at £70,000 would mean a
LTV of 90%.
||A charge made towards the upkeep of a leasehold property.
|Mortgage Indemnity Guarantee - required by lenders if your
loan is for more than a required percentage of the value of the house.
Although the borrower pays the premium, the policy protects the lender not
the borrower. May also be known as High Percentage Loan Fee.
||A legal document relating to the mortgage lenders interest
in the property.
||In cases where applicants require a mortgage which exceeds
the lender's normal limits they may require the applicant to take out a
mortgage indemnity policy with an insurance company for the difference.
||A formal offer of mortgage issued by a building society,
bank or other lender once the usual formalities such as references and
valuation have been carried out.
||The length of time over which you agree to pay back your
mortgage - usually 25 years, but it can be longer or shorter.
||The person or institution to whom the property is
||The person who takes out the mortgage.
selection of two or more estate agents to act on the seller's behalf,
usually incurring a higher fee than if the sale is completed by a sole
||The shortfall between the value of a property and the
outstanding sum owed on a mortgage.
||A bid made by a prospective buyer, this is not legally
|Office copies entries
||A Land Registry term for copies of registers and plans,
they are officially marked "office copy" and are legally
||Independent professional bodies who investigate complaints
on behalf of customers against estate agents, solicitors and insurance
||When you're allowed to pay more than your normal monthly
payment, so you can pay off your mortgage earlier if you want and save on
||The term used when a property is being sold, where a tenant
has legal right of occupation.
||You can stop making mortgage payments altogether for a
limited period agreed with the lender.
||Costs that may be incurred if the borrower repays the loan
too early or switches between lenders.
||An interest-only mortgage where you use a personal pension
plan to not only provide for your retirement, but also to repay your
mortgage on maturity.
||These are enquiries made by the purchaser's solicitor to
the vendor's solicitor requiring information relating to the property
being purchased prior to exchange of contracts.
||Amount you pay on a regular basis, usually for an insurance
||The way in which most house sales are completed in England
||A phrase used to describe the method of sale of property
when it is offered other than by auction or tender.
||Quotations from different mortgage lenders and insurance
||When you arrange a new mortgage on your home, with a
different lender and use the new mortgage to pay off the old one.
||A small charge reserved to a previous owner of land that is
paid to him or his successors annually out of freehold land. It is not a
||With some mortgages you have to pay a repayment fee if
certain things happen. For example, if you pay off some or all of your
mortgage, or you transfer to a different mortgage product.
||Monthly interest combined with payment towards the original
||See the Bank of England base rate.
||When loans are in default the mortgage lender can repossess
the property and sell it so they can repay their debt.
||Properties for sale by auction are normally offered subject
to a 'reserve'in which case the property is withdrawn if the highest bid
does not reach the reserve price.
||Holding back part of a mortgage loan until repairs to the
property are satisfactorily completed.
||A fee charged by the lender for sealing your deeds.
||Checks of local council records for planning applications
and restrictions, etc.
||The choice of a single estate agent to act on the seller's
behalf, incurring a lower fee than multi-agency.
||A Government tax on the sale of land and property which is
related to the sale price. At the present time the tax is 1% up to £250,000
3% from £250,000 to £500,000 and 4% over £500,000. Properties with a
sale price of less than £60,000 are exempt.
||A specialist report from a structural engineer on the
condition of a property.
|Subject to contract
||When an offer is made to purchase a property 'subject to
contract' it means that all the dealings are subject to the actual
exchange of the contract itself. Nothing is binding on either the vendor
or purchaser until the contracts are exchanged.
||The amount paid out on the death of a policy holder.
inspection made by a qualified surveyor. There are three main types of
survey. Valuation report (for mortgage purposes), Homebuyers report (also
comments on general condition) and Full Structural survey (examines every
|Tenancy in common
||When property is held jointly between two people and each
of them own an individaul share which can be passed on under a will.
||People living in a property owned by someone else.
||The process whereby the seller asks for written offers on a
property usually with a set closing date.
||A collective term relating to the nature of the vendor's
title to a property i.e. freehold, leasehold or crownhold.
||The ultimate record of ownership of a property, the
evidence of which is found in the title deeds.
||Tracker rates vary in line with changes to the Bank of
England base rate.
||The legal transfer of ownership on completion of the sale
of registered land or property.
Land Registry document that transfers legal ownership from seller to
||When the seller has accepted an offer on the property but
contracts have not yet been exchanged.
||You can under pay up to any previous over payments. You can
pay less than your normal monthly mortgage payments for a limited period,
but you have to build up a fund of overpayments first.
||Land which is not registered with the Land Registry. Proof
of ownership is by production of the Deeds.
||A well used estate agency phrase which means that the
property being offered will be vacant upon completion of the sale. The
property is therefore offered free from any such encumbrances as a sitting
tenant or service tenancy.
||Arranged by your lender to find out if the property is
worth the amount you've agreed to pay, and therefore suitable to lend a
|Variable base rate
||The variable base rate is the basic rate of interest
charged on a mortgage. This may change in reaction to market conditions,
so your monthly payments can go up or down.
||The legal name sometimes used to describe the seller of the
||Offer from prospective purchaser, not legally binding on