The process of buying or selling a property can be a minefield at the best of times. Add unfamiliar terminology into the mix and it can leave some very confused faces. We aim to help simplify the process with our list of terms that you're likely to hear along the way.
The document that is issued by a mortgage lender to a potential buyer and confirms the acceptance of a mortgage offer.
This is provided by a mortgage lender and confirms that they are prepared to lend the potential buyer the funds to complete a purchase, subject to the approval of the property.
A fee charged by some lenders to cover the administrative cost of arranging a mortgage cost – these are often charged to deals, e.g. special or fixed rate mortgages.
A temporary loan, usually carrying a high-interest rate, which allows the recipient to buy a property before selling their existing home.
This is a report on the physical condition of a property.
A mortgage used to buy a property that will be rented out for investment purposes.
The connected line of people who need to sell their current home to buy the next one – if, for example, one link (person) in the chain pulls out of their sale, the whole chain can collapse.
The conclusion of the sale – when the buyer receives the keys.
When two or more purchasers are given a draft contract and the first one to exchange contracts buy the property.
The legal process of transferring the ownership of a property, e.g. from a seller to a buyer.
The documents that prove ownership of a property.
When a borrower fails to meet their agreed repayment schedule – this applies to any kind of loan, including a mortgage.
The money you’ll need to pay upfront to secure a mortgage to buy a home – deposits are usually 10% of a home’s value, but this may vary.
These are fees that are paid by the solicitor on behalf of the buyer, e.g. stamp duty or money transfer fees.
A certificate that details how energy efficient a property is. The certificate ranks properties on a scale of A-G (with A being the most efficient). EPCs offer an estimation of energy costs and recommendations as to how the efficiency of a home can be improved.
A mortgage deal which comes with a predetermined interest rate for a defined period, usually two, three or five years.
Fixtures are items that have become part of a building or land and are included in a sale, e.g. a garage. Fittings are not attached to the building or land and are not included in the sale unless agreed, e.g. kitchen appliances.
The freeholder of a property owns it outright, including the land the property is built on. If you own the freehold of a property, you’re responsible for maintaining the property and the land it sits on.
When a sale is agreed at a certain price, but the seller accepts a higher offer from another buyer.
Where a buyer reduces their offer at the point of exchanging contracts to try to purchase a property for a lower price.
A guarantor commits to making payments, e.g. on a mortgage, when the borrower fails to keep up with their repayments. Guarantors may be a family member or close friend.
Help to Buy is a government scheme which aims to help people with small deposits buy a new-build home.
When a property owner asks an estate agent to market their property for sale.
A fee charged by the Land Registry to record the change in ownership of a property.
The ownership and right to occupy a property by way of a lease for a given period – leases usually range from 90 to 999 years.
Where the sale value of a property is less than the amount outstanding on a mortgage.
When a conveyancer, on behalf of the buyer, sends a list of questions about a property to the seller’s conveyancer.
Completion of the full and final repayment of a mortgage.
The option to buy a share of a property (between 25-and 75%) from a housing association – you will then pay an affordable rent on the share of the property you don’t own.
Tax paid to the government by a buyer after purchasing a property – the rate of tax paid depends on the value of the home bought.
A provisional agreement that is not yet legally binding as contracts have not been exchanged – at this point either party can still withdraw from the agreement.
A report determining whether there are any structural faults in a property.
A term used by estate agents to cover the process of finding a property’s market value. Get your property valued here.
A vendor is a person selling a property.
