Glossary of Terms

Advance
The mortgage loan secured on the property

Base Rate

The rate set by the Bank of England, by which all other rate are set against

Bridging loan
A short-term loan normally used to cover the period between selling one property and buying another
Broker/ Intermediary
A person who will arrange a mortgage with a lender.

Building survey
An extensive survey, carried out by a qualified surveyor, to spot faults and potential problems in the property you are buying.

Capital
The amount you have borrowed on the mortgage, and on which interest is charged.

Completion
When you become the legal owner of the property.

Contract
The legal document which transfers the ownership of the property from the seller to the buyer.

Conveyancer
A solicitor or licensed conveyancer who does the legal work involved in selling and buying property.

Conveyancing
The legal work involved in selling and buying property.

Credit reference agency
An organisation that keeps details of individuals and their credit histories. Lenders will usually check with a credit reference agency to see if someone applying for a mortgage has any
known credit problems.

Disbursements
The fees, such as stamp duty and Land Registry fees, which you pay to the conveyancer.

(ERC) Early repayment charge or redemption penalty
The charge some lenders make if certain mortgages ie Fixed rates and trackers are paid off early.

Equity
The total value of your property, less the amount of the mortgage. For example, if your house is worth £100,000 and you have a mortgage of £50,000, you have equity of
£50,000

Exchange of contracts
The point where the property sale becomes legally binding in England and Wales

FSA Financial Services Authority

 The FSA can be contacted at www.fsa.gov.uk

Freeholder
Someone who owns a property and the land it stands on.

Ground rent
A yearly fee leaseholders have to pay to the freeholder or landlord who owns the land the leasehold property is on.

High lending charge or higher lending fees

An additional fee charged by the lender should you be borrowing above a given amount on the property.

Home-buyer's report
A surveyor's report on a property. This type of survey is less extensive than a full building survey but more extensive than the lender's valuation.

Interest
The money you are charged for borrowing.

Land Registry fee
A fee paid to the Land Registry to register ownership of a property.

Lease
A legal contract which gives the ownership of a leasehold property to the buyer for a fixed period of time.

Leaseholder
Someone who owns a property, but not the land it stands on, for a fixed period of time.

L.I.B.O.R. The London Inter bank Offer Rate. The rate at which the banks lend to each other.

Mortgage

A Loan to buy a property and secured against that property

Mortgage application fees
These are fees charged by the lender to organise the mortgage for you. These are not usually refunded if you then do not go ahead with the mortgage. Some lenders will only charge such fees for specific mortgage deals, usually fixed or discounted deals

Mortgage deed
The legal agreement which gives the lender a legal right to property.

Mortgage term
The length of time over which the mortgage will be repaid.

Offer of advance
The formal offer of a mortgage from a lender.

Redemption
The paying off of a mortgage loan.

Retention
When the lender holds back some of the mortgage money due to there being faults with the property and until certain repairs have been done.

Security
The property the mortgage is being used to buy is the lender's 'security' for the loan. This means that the lender has rights over the property. If the mortgage repayments are not kept up to date, the lender can repossess the property and sell it to recover the debt.

Stamp duty
A government tax on buying properties costing more than £175,000.( Correct as of 3^rd Sept 2008)

Subject to survey and contract
Wording included in any agreement before the exchange of contracts. This wording allows the seller or buyer to withdraw from the property sale.

Term assurance
Life assurance to pay off a mortgage if the borrower dies, there is no investment value on this type of contract

Title deeds
The legal documents which set out the ownership of a property.

Valuation
The lender's inspection of the property to assess whether it is suitable for a mortgage.