JARGON EXPLANATIONS

•  Additional security fee:-  An up-front, one-off fee that is paid to the lender to protect them against a borrower defaulting on the loan. Also known as MIG, Indemnity Guarantee premium and Mortgage Indemnity Premium.
•  Annual percentage rate(APR):-  is the total cost of a loan, including all costs, interest charges and arrangement.
•  Arrangement fees:-  Are charged to arrange a loan on certain products. Usually applies to loans where a special interest rate applies, eg fixed or capped rates.
•  Assignment:-   The transfer of ownership of an insurance policy or lease.
•  Auction:-   The sale of a property to the highest bidder.
•  Basic variable mortgage rate:-  A mortgage lender's standard rate of interest that may be increased or decreased by the lender.
•  Bridging loan:-   A temporary loan, which allows a buyer to complete on the purchase of a new property before selling the previous property.
•  Building survey:-   An inspection of the property, conducted by a chartered surveyor, who produces a detailed report, including any property defects.
•  Buy to let mortgage:-   A type of mortgage specifically designed for people buying a property with the intention of letting it out.
•  Capital:-   The amount of the loan on which the interest is calculated.
•  Capped mortgage:-   For a fixed period of time, many lenders provide mortgages with an upper limit on the interest rate.
•  Chain:-   The situation that occurs when buyers are reliant upon completion of the sale of their existing properties, in order to complete on the purchase of any new property.
•  CML:-   The Council of Mortgage Lenders have produced the Mortgage Code to ensure lenders treat customers fairly.
•  Completion:-   The point at which all transactions concerning the property's sale are complete and legal transfer of ownership passes to the buyer.
•  Conditions of sale:-   The details that determine the rights and duties of the buyer and seller. These may be national, statutory, or the Law Society’s conditions
•  Contract:-   A legal agreement between the seller and buyer of a property which binds both parties to complete the transaction.
•  Contract race:-   When two parties have made an offer on the same house, the vendor sells to the first party to exchange contracts.
•  Conveyancer:-   A qualified individual, such as a solicitor or licensed conveyancer, who deals with the legal aspects of buying or selling properties.
•  Conveyancing:-   Traditional term for the legal work involved in the purchase and sale of a property.
•  Covenants:-   Rules and regulations governing the property, contained in its title deeds or lease.
•  Deeds:-   Legal documents proving ownership. The deeds will be held by the mortgage lender.
•  Deposit:-   A sum of money, paid by the buyer, when contracts are exchanged.
•  Detached:-   Term used to describe a property that stands alone and is separated from all others.
•  Development:-   A newly built residence or an older property which has been refurbished and modernised.
•  Dilapidation:-   Any disrepair or damage to a rented property.
•  Disbursements:-   Fees paid by the buyer's solicitor on the buyer's behalf, such as stamp duty, land registry and search fees.
•  Draft Contract:-   Preliminary, unconfirmed version of the contract.
•  Early redemption charge (ERC):-   A charge made by the lender if the borrower terminates a mortgage in advance of the terms of that mortgage.
•  Endowment mortgage:-   Interest-only repayments combined with monthly premiums into an endowment policy that is designed to pay off the loan at the end of the term.
•  Equity:-  The difference between the value of a property and the amount of mortgage owed.
•  Exchange of contracts:-  The point at which signed contracts are physically exchanged. These legally commit the buyer and seller to the purchase and sale of a property at the agreed price
•  Failed valuation survey:-   When your mortgage application is turned down after the surveyor's valuation report indicates the property is not worth the sum sought.
•  Fixed rate mortgage:-   A mortgage in which the interest rate is set for an agreed period of time.
•  Fixtures & fittings:-   All non-structural items included in the purchase of a property.
•  Flexible mortgage:-  An arrangement whereby you can increase or decrease your mortgage repayments.
•  Freehold:-  Technical word for the ownership of the property, meaning that it belongs to the owner without limitation of time.
•  Gazumping:-  This is when a seller accepts a higher offer from a third party on a property that they have agreed to sell to someone else, but have not yet exchanged contracts.
•  Gazundering:-  When a buyer offers the seller a lower offer just before contracts are about to be exchanged.
•  Ground rent:-  The annual charge made by the freeholder to the leaseholder.
•  Guarantor:-   The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrower's debt if the borrower defaults.
•  Homebuyer's survey and valuation:-  This is a survey, carried out by a chartered surveyor to assess the state of a property and its value, that is not as detailed as the full structural survey.
•  HMO:-   Homes of Multiple Occupancy.
•  IFA:-  Independent Financial Advisor.
•  Individual savings account (ISA) mortgage:-   An interest-only mortgage linked to an Individual Savings Account fund, which is designed to pay off the loan at the end of the period.
•  Interest charges:-  The charges that banks make on a loan, calculated as a percentage of the amount borrowed.
•  Interest-only mortgage:-  There are two types of mortgage - interest-only or capital repayment. An interest-only mortgage stays the same throughout the whole mortgage term. Interest and a premium are paid monthly into an investment vehicle. At the end of the term, the proceeds are intended to repay the mortgage. The amount will depend on how the investment vehicle has performed. If you choose an interest-only mortgage, you will be responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
•  Inventory:-  A list describing the condition of furnishings and contents of a leased property at the start of the tenancy in order that any dilapidation during the tenancy can be identified.
•  Joint tenants:-  A form of ownership for two parties whereby, if one of them dies, their share of the property automatically transfers to the remaining party, regardless of the terms of the deceased owner's will.
•  Land registry fee:-  A fee paid to the Land Registry to register ownership of a property.
•  Lease:-  A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time.
•  Leasehold:-  Denotes that the ownership of the property is by way of a lease.
•  Lender's arrangement fees:-  Charge passed on to the buyer by the lender for arranging a loan.
•  Lender's legal fees:-  The fees incurred by the lender when arranging a mortgage. These costs are passed on to the buyer.
•  Loan to value (LTV):-  The size of the mortgage as a percentage of the property's value.
•  Local authority search:-   Procedure whereby a buyer's solicitor makes an enquiry to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area.
•  Maintenance charge (or service charge):-  The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder.
•  Maisonette:-   A portion of a property that is arranged over more than one floor.
•  Mortgage:-   An amount of money advanced by a lender, such as a bank or building society, on the security of a property and repayable over a long period.
•  Mortgage deed:-   A legal document relating to the mortgage lender's interest in the property and containing the terms of the mortgage.
•  Mortgage indemnity guarantee (MIG):-  An insurance policy that mortgage lenders may require buyers to pay for if their loan is above a specified proportion of the purchase price.
•  Mortgage indemnity premium (MIP):-  An insurance policy that protects the lender against a borrower defaulting on mortgage repayments.
•  Mortgage payment protection (MPP):-  This is an insurance designed to pay the monthly mortgage for a limited period if the borrower is unable to work through illness, disability or redundancy.
•  Mortgage rate:-   The standard variable interest rate quoted by all mortgage lenders, which normally varies with the Bank of England base rate.
•  Mortgage term:-   The period of time over which (a repayment mortgage) or at the end of which (an endowment mortgage), the loan is to be repaid.
•  Mortgagee:-   The lender of a mortgage.
•  Negative equity:-   When the value of the property falls to less than the outstanding mortgage.
•  NHBC scheme (National House-Building Council):-  A type of building guarantee available on some newly built homes under which defects occurring within a specified time after construction are remedied.
•  Offer:-   A sum of money that the buyer offers to pay for a property.
•  Offer of a loan:-   A formal document approving the mortgage you have requested and detailing the terms and conditions that apply.
•  Ombudsman:-   Independent professional bodies who investigate complaints on behalf of customers against, for example, estate agents, solicitors or insurance companies.
•  Open market value:-   The price a property would achieve when there is a willing buyer and willing seller.
•  Payment break:-   An option on flexible mortgages that allows you to stop making mortgage payments for a period.
•  Penalties:-   Costs that may be incurred if the borrower repays the loan too early or switches between lenders.
•  Peppercorn ground rent:-   A nominal periodic rent, usually paid annually.
•  Preliminary enquiries:-   The initial enquiries about a property that are put forward to a seller, which the seller must answer before the exchange of contracts.
•  Premium lease:-   A lump sum paid up front as rental for a property.
•  Principal:-   The sum of the loan on which interest is calculated.
•  Purchaser:-   A person who is buying a property.
•  Redemption:-   When a mortgage is fully repaid.
•  Re-mortgage:-   Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage.
•  Repayment mortgage:-   A mortgage repaid by way of monthly repayments of capital combined with interest.
•  Repossession:-   When the mortgage lender takes possession of your property due to non-payment of the mortgage.
•  Retention:-   Holding back part of a mortgage loan until repairs or specified works to the property are completed.
•  Search:-   A request or enquiry for information about a property, held by a local authority or by the Land Registry.
•  Semi-detached:-   A property that is joined to one other house.
•  Service charge:-   See Maintenance Charge.
•  Sole agent:-   When a seller chooses only one estate agent to sell their home.
•  Stamp duty:-   A tax paid by purchasers of properties with a value in excess of a certain amount. This can be between 1% and 4%, depending on the value of the property.
•  Structural survey:-   See Building survey.
•  Studio Flat:-   A flat consisting of one main room or open-plan living area, that includes cooking and sleeping facilities and has a separate bathroom/shower room.
•  Subject to Contract:-   Indicates that an agreement is not yet legally binding.
•  Surveyor:-   A qualified expert who carries out the survey.
•  Tenancy:-   A temporary possession of a property by a tenant.
•  Tenancy agreement:-   A legal agreement designed to protect the rights of the tenant and landlord, that sets out all the terms and conditions of the rental arrangements.
•  Tenant:-   A person who has temporary possession of a property.
•  Tenants in common:-   A form of ownership by two or more people in which, if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other(s).
•  Tenure:-   Conditions on which a property is held (ie the length of lease).
•  Terraced house:-   A property that forms part of a connected row of houses.
•  Title deeds:-   Documents showing the legal ownership of a property.
•  Transfer deeds:-   The Land Registry document that transfers legal ownership from seller to buyer.
•  Under offer:-   When a seller has accepted an offer from a purchaser but prior to exchange of contracts.
•  Valuation:-   A basic survey of a property to estimate its value for mortgage purposes. Mortgage lenders will insist on this before lending.
•  Variable Base Rate:-   The basic rate of interest charged on a mortgage, that may go up or down depending on market conditions.
•  Vendor:-   The legal name for a person selling a property.
•  Yield:-   Income from a property calculated as a percentage of its value.