Glossary
Advance
The mortgage loan.
Bridging loan
Short-term loan enabling the borrower to bridge the gap between the purchase of a new property and the sale of the old.
Capital
The amount of the loan on which interest is calculated.
Completion
The final legal transfer of ownership of the property.
Contract
The written legal agreement between the seller and the buyer with regard to the property.
Conveyancer
Solicitor or licensed conveyancer who arranges the legal aspects of buying or selling property.
Conveyancing
The legal work in the sale and purchase of property.
Disbursements
The fees such as stamp duty, Land Registry fees and search fees which are payable to the conveyancer by the buyer.
Equity
The difference between the value of the property and the amount of any loans secured against it.
Exchange of contracts
The point when both buyer and seller are legally bound to the transaction.
Freehold
Ownership of the property and the land on which it stands - not usually possible for flats.
Ground rent
Annual charge payable by leaseholders to the freeholder.
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'Higher Lending Charge'
Single payment to enable the lender to purchase insurance for the lender to cover most of the value of the property when a high percentage of the purchase price is lent.
House/flat-buyer's report
Surveyor's report on a property - less extensive than a structural survey, but more extensive than the lender's valuation for mortgage purposes.
Land Registry fee
A fee paid to the Land Registry to register ownership of a property.
Leasehold
Ownership of the property but not the land on which it stands, so that when the lease expires ownership of the property reverts to the freeholder.
Lessee
The person to whom a lease is granted.
Loan to Value
The percentage of the value of a property a lender is prepared to lend. For example, if a lender has a mortgage available to 95%of property value and a house is valued at £100,000, they are prepared to lend £95,000 towards the purchase of that house.
Mortgage
A loan made against the security of property.
Mortgage deed
The legal charge of the property to the mortgage lender until such time as the loan is repaid.
Mortgage term
The length of time over which the mortgage loan is to be repaid.
Redemption
The paying off in full of the mortgage loan.
Early Repayment Charge
A fee charged by many lenders if the purchaser switches to another lender within an agreed time period, often between two to five years.
Retention
A proportion of the mortgage loan is retained by the lender when essential repair work to a property is required, the balance paid when the remedial work is completed.
Standard Variable Rate
This is the normal rate at which a lender lends money. It usually varies according to the current Bank of England lending rate. If the Bank of England varies its lending rate, other lenders often change their rates as well.
Structural Survey
Full inspection of the property by a surveyor usually on behalf of the buyer.
Subject to survey and contract
Wording of any agreement before the exchange of contracts or before a satisfactory survey report has been received which allows either party to withdraw without incurring a penalty.
Valuation
Inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower must pay.
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