LEYTONSTONE / LEYTON | 020 8539 2009  
  SOUTH WOODFORD / WOODFORD GREEN | 020 8989 6868  
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  Click here to find various articles and tips on making the most of your home.
 
 
Leytonstone / Leyton
Theydons, 20 Church Lane
Leytonstone, London, E11 1HG

Office: +44 (0) 20 8539 2009
Fax: +44 (0) 20 8556 0574
Email: e11@theydons.com
 
South Woodford / Woodford Green
Theydons, 41 High Road
South Woodford, London, E18 2QP

Office: +44 (0) 20 8989 6868
Fax: +44 (0) 20 8989 2228
Email: e18@theydons.com

Estate Agent Jargon

Glossary of Moving and Conveyancing Terms

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Additional Enquires

Questions raised by the purchaser’s solicitor when in contact with the vendor’s solicitor.

APR (Annual Percentage Rate)

The APR includes important factors such as:
 
-  the interest rate you must pay;
-  how you repay the loan; the length of the loan agreement (or term); frequency and timing of installment payments;
   and amount of each payment;
-  certain fees associated with the loan; and
-  certain compulsory insurance premiums (for example payment protection insurance).

All lenders have to tell you what their APR is before you sign an agreement. It will vary from lender to lender. Generally, the lower the APR the better the deal for you, so if you are thinking about borrowing, shop around.
Arrangement Fees: A fee that is sometimes charged for arranging a loan where a special interest rate applies e.g. fixed, discounted or capped rate
 

Arrangement Fees

A fee that is sometimes charged for arranging a loan where a special interest rate applies e.g. fixed, discounted or
capped rate.

 

Assignment

Transfer of ownership of a lease or insurance policy.

 

Auction

The sale of a property to the highest bidder.

 

Basic Variable Rate

Every Mortgage lender has a standard variable rate, or SVR, of interest on which it bases all its mortgage deals. The standard variable rate is, in turn, based on the Bank of England’s base lending rate – and this is decided at monthly meetings of the Bank’s monetary policy committee, or MPC. Every time the MPC raises its rate, mortgage lenders race to increase their standard variable rates, generally by the same amount. And every time the MPC lowers its rate, the lenders do too – only often not so quickly! But that doesn’t mean mortgage lenders charge the same as the Bank of England.

Bridging Loan

A temporary loan providing financial cover to a buyer wishing to complete on a purchase of a property before selling their own home. These loans are expensive and are usually considered to be a last resort. But if a bridging loan can tide you over in the short term then the extra expense may save you from losing money already spent in the purchase process, as well as reducing stress.

 

Buy To Let Mortgage

A type of mortgage specifically designed for people who want to invest in the property market by purchasing one or more properties and letting them out to tenants.

 

Capital

The amount of the loan which interest is calculated.

Capped Rate Mortgage

Are supposed to offer the best of both variable and fixed rate deals. You agree to have a limit - a cap - on the maximum amount of interest you will pay over a particular period of time while allowing it to fall if the variable rate drops.

 

Chain

The parties involved in a linked transaction of more than one sale/purchase. A delay in one link in a chain can hold up all other related transactions.

 

Completion Date

The date when the transaction relating to the sale/purchase of a property is completed. This is usually the date you become the owner and can move in.

 

Completion Statement

A financial statement from the solicitor detailing all financial transactions in relation to the sale/purchase including costs and disbursements.

 

Conditions of Sale

The terms by which the buyer and seller agree to sell/buy the property. The Law Society sets standard conditions. The conveyance lawyer may set special conditions in each case.

 

Contents Insurance

Covers your personal possessions within the property.

 

Contract

The legally binding agreement specifying the detail of the sale or purchase. The seller's conveyance 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” at which point the sale becomes binding on both parties.

 

Conveyancer

The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house.
This can be a solicitor or a licensed conveyancer.

 

Conveyance or Transfer

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

 

Covenants

Are restrictions that are imposed on the use of land or property by a former owner. If land or property is subject to any covenants, these will be shown within the deeds of the property. The existence of any covenants should be brought to the attention of a purchaser by their Solicitor when the land / property is sold.

 

Deeds

The legal title document which provides historical information about the property, possibly including details of any restrictive covenants, etc..

Deposit

The amount on exchange of contracts, which is only refundable in exceptional circumstances. Contracts usually provide for 10% of the purchase/sales price but this can often be negotiated to a lower level. The deposit forms part of the purchase price and should not be confused with the “deposit” towards a mortgage, which is the “cash” difference between the purchase price and the amount of mortgage.

 

Disbursements

The various costs the solicitor/licensed conveyancer will pass on to you in addition to their professional fees. E.g. land registry charges, search fees, photocopying etc.

 

Draft Contracts

Preliminary and unconfirmed version of the contract which is shared between solicitors to finalise.

 

Drainage Search

This will show whether or not the surface and/or foul water drains run into a public or private sewer.

 

Early Redemption Charge

A charge made by the mortgage lender if the borrower terminates a mortgage in advance of the terms of that particular mortgage. ERCs are generally imposed on fixed or discounted mortgages offering a relatively cheap deal for an initial period. They usually run only until the end of the initial cheap deal period, though some mortgages impose extended redemption penalties which continue even though the borrower has moved back onto the lenders standard variable rate.

Easement

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

 

Environmental Search

It has more recently been recommended that the buyer’s solicitor should also carry out an environmental search to see if there are any landfill or waste disposal sites in the area, if the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.

 

Equity

The proportion of the value of the property you actually own, as opposed to the amount mortgaged.

 

Excess

A fixed sum paid to the insurance company at the commence of any claim

 

Exchange of Contract

The point that both parties are legally committed to the transaction. The time and date of exchange is recorded by the conveyancing lawyers of each party.

 

Fixed Rate Mortgage

A type of mortgage where interest repayments to the lender are fixed until maturity or for a specified term.

Fixtures and Fittings

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

 

Freehold

Recognised by English law, freehold is the complete and indefinite ownership of a piece of land and any buildings on it. There can still be restrictions on the use of the land.

 

FSA

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

 

Gazumping

When the seller accepts a higher offer from another buyer after an initial offer has been accepted.

Gazundering

When the buyer lowers their offer after the sale has been agreed.

 

Ground Rent

An annual charge paid by the leaseholder to the freeholder.

 

Guarantor

Someone who agrees to stand surety for your mortgage and will be liable to pay it off should you default.

 

Homebuyers Survey and Valuation

A survey done to a standard format set out by RICS.It is most suitable for conventional properties built within the last 150 years, which are in reasonable condition. It doesn't detail every aspect of the property, and only focuses on urgent matters needing attention. It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations.

HMO

Homes of Multiple Occupancy.

 

IFA

Independent Financial Advisor.

Individual Savings Account (ISA) Mortgage

An interest only mortgage that works on the same principle as endowments: you invest in a fund which is expected to build up enough cash to repay the mortgage at the end of the term, usually 25 years.

 

Indemnity Insurance

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

 

Interest Only Mortgage

In an interest-only mortgage your repayments only cover the interest on the mortgage amount and do not repay any of the underlying loan capital. While there may be good reasons for operating a mortgage in this way, it is imperative that provision is put aside to pay off the loan at the end of the term. Using an investment vehicle to build up a capital sum may be one way of doing this e.g. through an ISA plan, but with all investments there is an associated risk that the sum provided on maturity may not meet the liability. It is important to get advice in this area to ensure that an interest-only mortgage is right for your circumstances.

 

Inventory

A list which describes in detail the condition of furnishing and contents of a property to be let out. This is done before the tenancy commences in order that any dilapidation during the tenancy can be identified.

 

Joint Tenants

Two or more people owning property. In the event of the death of one of the tenants, the property passes to the survivor(s). (regardless of the terms of the deceased owner’s will)

Land Charges Search

If you are obtaining a mortgage the lender will ask your solicitor to carry out a search to make sure that are you are not bankrupt!

Land Registry

The official body responsible for recording the ownership of land.

 

Land Registry Fees

Fees paid by your conveyance lawyer on the buyer’s behalf to register the ownership of property with the Land Registry.

 

Land Registry Search

This is carried out just before completion in order to find out if there are any new mortgages registered against the property that have not previously been disclosed. If there are then the buyer’s conveyance solicitor will require confirmation that these will be repaid.

 

Lease

A contract in which the legal owner (freeholder) of property agrees to another person using that property or part of it in return for a regular specified payment (known as rent) over a set term. Once the lease expires the ownership may revert to the freeholder or superior leaseholder.

 

Leasehold

This usually relates to a flat or apartment and is a form of ownership recognised by English law that is for a fixed period of time. The freeholder owns the freehold and the property will usually revert to him at the expiry of the leasehold period.

 

Licensed Conveyancer

A licensed conveyancer is a specialist in the transfer of property. Much like a solicitor, except that a licensed conveyancer might not be as qualified in non-property related aspects of the law.

 

Life Cover

An insurance policy that pays out a lump sum in the event of your death – often used as a form of additional security for a mortgage loan.

 

Listed Building

Buildings are 'Listed' because they are considered to be of special architectural or historic interest and as a result require special protection. Listing protects the whole building, both inside and out and cannot be altered or demolished without local government consent.

 

Loan To Value (LTV)

Loan to value refers to the amount of money borrowed (the loan), expressed as a percentage of the value of the property to be purchased or remortgaged (the value). The value of the property is defined as either the purchase price or the valuation, whichever is the lower.

 

Local Authority Search

This reveals details of the planning history for the property and whether the Council is aware of any breaches of planning, also any proposals for new roads or traffic schemes, tree preservation orders, conservation areas etc.. that are within the Council's control that may affect the property.

 

Maintenance Charge

The cost of maintaining and repairing the internal, external or communal parts of a building charged to the tenant or leaseholder.

Maisonette

A property that is arranged over more than one floor often having their own entrance from outside.

 

Mortgage

A loan to help you buy your house. The loan is secured on the property to prevent you selling the property without paying off the loan. If you fail to meet the mortgage payments as agreed, the lender could force you to sell your home.

 

Mortgage Deed

The legal document gives the lender certain rights over the property.

 

Mortgage Fees

An amount charged by your financial advisor, or the lender, to cover the cost of arranging your mortgage.

 

Mortgage Offer

If the lender is happy with the valuation and references, you'll be made a formal offer approving the mortgage and detailing all terms and conditions. This is usually sent to you and your solicitor.

 

Mortgage Repayment Protection (MRP)

An insurance policy which covers your monthly mortgage payments should you fall ill.

 

Mortgagee

The lender of the mortgage (i.e.: bank or building society)

 

Negative Equity

Where the size of the mortgage loan is greater than the market value of the property.

Offer

An amount of money a buyer wants to pay for a property.

Ombudsman

A scheme that provides an independent and impartial facility for the resolution of complaints between those members of the public who buy, sell or let property and the agents they deal with.

 

Open market Value

A price that a property will achieve on the open market when there is a willing buyer and seller.

 

Payment Break

A flexible mortgage option that allows you to stop making mortgage payments for up to 6 months.

Penalties

Cost that may be charged if the borrower repays the loan earlier than the agreed period or switches between lenders.

 

Premium Lease

A lump sum paid up front on rental property.

 

Purchaser

A person who is buying a property.

 

Redemption Fee

A penalty which may be charged by your existing mortgage lender if you pay off your mortgage early or you move to a different mortgage. Always check the details of your existing mortgage before agreeing to redeem it and consider any such implications on a future loan.

Re-mortgage

Refinancing a property by either switching a mortgage to another lender or by arranging a second mortgage with the existing lender when there is equity gained, due to an increase in the property value.

 

Repayment mortgage

A mortgage where the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. At the end of the mortgage term, the full amount of the debt will be repaid.

 

Repossession

Where the mortgage lender takes possession of the property due to non – payment of the loan.

 

Restrictive Covenant

This is a clause, usually in the original title deeds, which can legally restrict the use/enjoyment of a property. For example,
a builder of a property next to his own might bind the purchaser and future owners never to erect another building on the land.

 

Retention

When the lender holds back some of the mortgage money until certain repairs have been done to the property.

 

Searches

A check on certain recorded aspects that might affect the value of the property, such as a Local Authority Search which covers items such as road maintenance, planning applications etc..

Sole agent

When a seller instructs only one agent to sell their home.

 

Solicitor

The legal expert handling all the documentation relating to the sale or purchase of a property.

 

Stamp Duty

A government tax payable by every buyer of a property over £125,000. Duty is charged at 1% for homes priced between £125,000 and £250,000. The rate is 3% for homes over £250,000 but not more than £500,000. Property over £500,000 attracts “stamp duty” of 4%. There are certain nil-rated bands applying to disadvantaged areas.

 

Structural Survey

A survey giving details about the building and its integrity.

 

Subject to Contract

The term used to denote that a provisional agreement between the buyer and the house has been made, but this is not binding on either side.

 

Tenancy

Temporary occupation of a property by a tenant.

Title Deed

The legal document showing who owns the property.

 

Transfer Document

The formal document that officially confirms the transfer of the property from the seller to the buyer.

 

Valuation Survey

An inspection of the property by the lender’s representative to ascertain how much the property is worth to the lender as security for the mortgage loan. This is not to be confused with a structural survey.

Variable Base Rate

The basic rate of interest charged on a loan. This may change as a result of market conditions, so your monthly payments can go up or down.

 

Vendor

The legal name for the owner selling a property.

 

 
 
 
 
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