Glossary of Terms

Affordable Homes

Homes that are given to a housing association to rent out as well as houses that are shared ownership.

Annual percentage rate - APR

This is the figure that allows you to calculate the true annual cost of your loan, expressed as a percentage. It incorporates all ongoing costs and interest or arrangement fees. By law mortgage lenders have to quote the APR alongside their quoted rates for each mortgage.

Bridging Loan

This is a loan that covers the period of time between paying for a property and receiving the payment from the sale of your own property.

Buildings Insurance

This covers the cost of rebuilding or repairing the structure of the property. Your lender will insist on buildings insurance before offering you a mortgage.

Chain

The chain is formed by several people who are dependent on one another's sales to complete their own purchase.

CHAPS payment

This is a telegraphic transfer of money which will normally occur between your lender and your solicitor. There will be a fee for this.

Completion

When the money your mortgage lender has loaned you is paid and then the deeds and the keys are handed over.

Contents Insurance

Cover against accidental damage or theft of the moveable contents of your home including furniture and appliances, this is not a legal requirement.

Contract

This is the written agreement to sell a property. Not, however, binding until they have been exchanged.

Conveyancing

This is the legal process that involves the transferring of the property from one owner to the next.

Council Tax

An annual charge paid to the local authority that helps pay for services such as rubbish collection. Each property is banded and carries a differing fee.

Deposit

This is the initial payment made when you exchange contracts.

Equity

The value of the property minus the mortgage loan left to pay – the profit in your home.

Exchange of contracts

The time when the agreement to buy or sell a property becomes legally binding.

Freehold

When the property and/or the land belongs to you or your dependents indefinitely.

Gazumping

When an accepted offer is beaten by a rival purchaser with a higher bid.

Gazunder

When the buyer will only proceed with the property purchase if the seller reduces the price.

Housing Association

A non-profit making organisation that provides and regulates social housing and shared ownership schemes.

Joint tenancy

When two people own half shares of a property. If one dies the other takes possession of the property.

Key workers

People employed in jobs felt to be of vital importance to the running of the country such as nurses and police officers, fire fighters and teachers.

Land registry

The government office that guarantees the titles to all registered land.

Leasehold

The ownership of a property for a fixed number of years.

Local council searches

A process that will identify any plans that might affect your property. Carried out by a solicitor before you purchase the property.

Redemption fees

A fee payable on some mortgages if you pay the debt off early.

Snagging

The process when the house builder inspects a new build home for quality of finish.

Stamp duty

A tax paid to the government when you buy a house. 1% for properties over £120.000.

Subject to Contract

An agreement that is not yet legally binding.

Survey

A report commissioned by the purchaser that details the condition of the intended property.

Tenants in common

Joint owners of a property who are each able to dispose of their share if they wish to.

Title deeds

The documents confirming the ownership of the land or the property.

Warranty

A guarantee to accept responsibility for necessary repairs over a specified term – usually 10 years.