When you buy your first home, you’ll come across a lot of new and sometimes confusing terminology. We’ve created a glossary to turn the jargon into clear, simple language and to help shed some light on the whole process.
A
Advance:
A mortgage or loan.
Arrangement fee:
The charge some lenders make for providing a mortgage.
B
Bridging loan:
A loan arranged over a short period until permanent funds are available. Usually arranged through a clearing bank, but occasionally through a building society.
Buildings insurance:
Cover for the bricks and mortar of your home.
See our Home Insurance section for offers on buildings insurance for George Wimpey new homes.
C
CML:
The Council of Mortgage Lenders, which represents 98% of UK residential lenders and promotes good lending practices.
Contract:
The legal agreement between a seller and a buyer of a property which describes the details of the property and the terms agreed.
Conveyancing:
The name given to the branch of law dealing with transfer of ownership of property.
Covenant:
A restriction or condition affecting the property which must be observed or performed.
Credit check:
Assessment of your income and financial status by a potential lender.
D
Date of entry:
In Scotland, the date on which the buyer takes possession of the property.
Deeds:
Legal documents proving ownership of a property.
Deposit:
A percentage of the full purchase price, normally 10%, which is paid by the purchaser on exchange of contracts to secure the purchase of the property.
Disbursements:
The costs of the legal process your solicitor or conveyancer will have to pay for on your behalf and that are added to their bill.
Disposition:
In Scotland, the document which transfers legal ownership of a property to the buyer.
E
Engrossment fee:
The fixed charge for the top copy of the transfer/lease, paid for by the purchaser.
Enquiries before contact:
Prior to the purchaser signing a contract, a collection of detailed questions regarding the property may be asked which need to be answered in full before contracts are signed. Also called preliminary enquiries.
Equity:
The value remaining on a property after all sums relating to the mortgage have been deducted.
Exchange of contracts:
The moment when, in England and Wales, a contract for the sale or purchase of a property becomes legally binding. Contract documents are signed by both parties and the buyer pays a deposit, usually 10% or a lesser amount by negotiation and his deposit forms part of the total purchase price. Can also be known as unconditional exchange of contracts.
Energy Performance Certificate (EPC)
An Energy Performance Certificate is part of a Home Information Pack. Further information can be found at the official site for Home Information Packs.
F
Factor:
A professional property manager in Scotland who performs the same function as a management company in England and Wales.
Feu:
A plot of land or property in Scotland.
Feuar:
The owner of a plot of land or property in Scotland.
Fixtures and fittings:
All items in the home that are not part of the actual building.
Freehold:
The outright and absolute ownership of land and any property which stands on it.
G
Ground rent:
A payment made at specific times as required under the terms of the lease.
H
Home Information Packs (HIPs):
A set of documents about a property. Consisting of Home Information Pack Index, Energy Performance Certificate, Sale statement, Standard searches and Evidence of title. Further information can be found at the official site for Home Information Packs.
I
Independent financial advisor:
An independent person who advises on a wide range of mortgage sources and schemes.
Intermediaries:
Mortgage brokers or intermediaries who can arrange a loan for you.
L
Land Registry:
A government body which maintains records of land and property ownership.
Land Registry fee:
A fee paid to the Land registry to register ownership of a property. Your solicitor will pay this and add it to your bill.
Lease:
A situation where property is built on land owned by a person or organisation other than the owner of the property that is erected on this land. The ownership of this property will be for a fixed term and will usually include payment of ground rent on a pre-set term basis.
Legal completion:
The date on which the buyer takes possession of the property.
Local authority search:
A search, payable through your solicitor, of local authority records to confirm the status of the property, check for proposed changes to the area and detail planning permission granted.
LTV:
Loan to value the size of the mortgage as a percentage of the property’s value.
M
Management company:
A company set up to manage the services that are provided and to carry out the repairs or maintenance required.
MIG: Mortgage indemnity guarantee:
An insurance payable to the lender that covers the extra risk of lending a large proportion of the value of your home (often required when exceeding the normal maximum mortgage advance). The premium for this policy is then paid by the borrower.
Mining search:
Similar to a local search and intended to establish that the property you are purchasing is not affected by mining works, past or present.
Missives:
In Scotland, the name given to a contract.
Missives conclusion:
In Scotland, the equivalent of exchange of contracts.
Mortgage:
A loan for which a property is the security.
Mortgagee:
Any person or organisation who lends money for the purpose of mortgage, i.e. building society, insurance company, bank or private individual.
Mortgage interests:
In return for the loan that has been advanced on your property by the lender, you will pay a certain sum in interest. The rate of this interest can be affected by the economic conditions prevailing at any given time, unless the mortgage rate is fixed.
Mortgage offer:
A formal written offer laying out the terms of a mortgage loan.
Mortgage protection policy:
Insurance policies that can be taken out against a mortgage which will ensure that, in the event of your death, the full outstanding amount of the loan will be paid off.
Mortgage term:
When a mortgage is arranged it will be for a fixed time period.
Mortgage valuation:
A professional assessment of the value of the property as it stands at time of inspection for mortgage purposes, made by a person nominated by the organisation that has received the mortgage application. The fee for the valuation is paid by the borrower.
Mortgagor:
This simply means the borrower.
S
Search:
A request or enquiry for information held by a local authority of the Land Registry.
Solicitor’s fees:
The professional fees a solicitor charges for carrying out the conveyancing process.
Stamp duty:
Transfers of property ownership incur a Government levy. Figures are subject to change according to Government legislation.
Subject to contract:
The period during which the sale is agreed, but there is not yet a binding legal contract; either party could still back out with no legal comeback.
T
Telegraphic transfer:
The electronic transfer of funds, the costs of which will be added to your solicitor’s charges, usually as a disbursement.
Title:
The legal ownership of property or rights which a person has to a property.
Title deeds:
The documents giving evidence of title (ownership or rights).
Transfer document:
The document which transfers legal ownership of a property.
V
Vendor:
This simply means the seller.
Y
Yield:
The rental income arising form a property that is let out.