| Are you confused by all
the home buying and Mortgage terminology ?
Click on a letter below to go to that section. A B C D E F G H I J L M N P R S T V A
Acceptance Fee
Some lenders charge this fee when they give you a mortgage – it
usually is about 0.5% of the value of the loan. Most lenders have
now waived this fee. Advance
This is the total amount of the loan you receive. Agents (see Estate Agents) APR
Annual Percentage Rate Annuity Mortgage (See Repayment Mortgage) Auction
Property sale. If you win the bid you are legally bond to buy the
home so it is vital to have a mortgage approved and to make sure
that the house is structurally sound before the auction. B (back to top) Bridging Loan
A temporary loan to allow you to buy your new house before selling
your own home. Broker
An independent intermediary who will give you advice and offer
a range of mortgages. Contact a Non-Fee Charging Broker Building Insurance
Insurance to cover any structural damage to your home. All lenders
will need their interest in your home to be noted on the policy.
C (back
to top) Capital
The sum borrowed to buy the home. Chain
This happens when the seller needs the sale of their house to close
to complete the purchase of another property. The same situation
may happen for other people in the chain. As a result if one
sale falls through the whole chain can collapse. Charge (or Legal Charge)
This is the security that the lender relies on when granting a
mortgage. This is usually recorded at the Land Registry / Registry
of Deeds. Completion
The point when contracts have been exchanged and ownership legally
passes to the buyer. Contents Insurance
Insurance to cover any loss or damage to your possessions. (It
is often better value to take contents insurance as part of the
buildings insurance policy rather than on it’s own). Contracts
A written legal agreement between the seller and buyer. Conveyancing
Legal work involved in buying and selling a home. D (back to top) Deeds (See title deeds) Disbursements
Expenses paid out by the solicitor on behalf of the purchaser.
(e.g. postage/couriers) E (back to top) Endowment Mortgage
Interest is paid to the lender each month. A payment is also paid
into a savings/investment policy each month. The loan is repaid
at the end of the loan period from the proceeds of this policy. Equity
The amount of the property you own i.e. the property value less
the mortgage. Estate Agent
Property Agent who works on behalf of the seller who has the aim
of getting the highest price for the home. Exchange of Contracts
The point at which the buyer and seller are legally bound to the
sale and purchase of the property.
F (back
to top) Failed Valuation
When the lender turns down your mortgage application after reading
the surveyor’s valuation report. First Charge
A legal charge used by the lender to secure the mortgage. The lender
has a ‘first call’ on any funds available when you
sell the property. First Time Buyers Grant
This grant is now no longer available Fixed Rate
Payments on a mortgage can be fixed for a specified period and
will not change for that period. Freehold
Ownership of the property and land.
G (back
to top) Gazumping
When the seller having already accepted an offer from Party A accepts
a higher bid from Party B. Ground Rent
Rent you pay annually on a long lease. Guarantor
A person who agrees to guarantee a loan. With some lenders you
can borrow more money with a guarantor. They are responsible
for the mortgage payments if you can’t afford to pay them. H (back to top) Home Bond
Guarantee on most new houses and apartments. It provides against:
losing your deposit if the builder goes bankrupt, 10 years Warranty
against major structural faults, and 2 years Defect Warranty
against water and smoke damage after completion. HB47
Certificate issued by Home Bond confirming that the property has
been registered and is covered under the Home Bond Guarantee
Scheme.
I (back
to top) Indemnity Bond
An upfront one-off fee charged by most lenders if you borrow in
excess of 70-80% of the house value to protect them against you
defaulting on the loan. J (back to top) Joint Agents
When the seller employs two independent Estate Agents to sell their
house. L (back to top) Land Registry
The solicitor registers the buyer as the new owner of the house. Life Assurance
An insurance policy which pays out a fixed lump sum on the death
of a policy holder. All lenders will require you to have life
insurance to cover the mortgage. This is often referred to as
Mortgage Protection. Loan to Value
This is a formula used to work out the percentage of the value
of the house that you borrow from the lender e.g. if the house
is worth € 100,000 and you borrow € 50,000 the Loan
to Value is 50%.
M (back
to top) Mortgage
A long term loan to finance the purchase of a property. Mortgagee
The lender of the mortgage. Mortgagor
The house buyer who takes out the mortgage. Mortgage Term
The period over which the mortgage is to be repaid. Mortgage Protection
An insurance policy which will pay off a fixed amount of money
on the death of an individual. (Also see Serious Illness)
N (back to top)
Negative Equity
When the value of a home falls to less than the balance of the
mortgage.
P (back to top) Pension Mortgage
Mortgage available to self employed people, people without a pension
scheme and owner directors of companies. Monthly interest payments
are made to the lender, and a pension policy is set up to pay
off the mortgage when the mortgage holder retires. It can be
very tax efficient. Speak to your broker for more details. Premium
The monthly amount payable for an insurance policy. Principal
The original amount of the loan.
R (back
to top) Redemption
Paying off the mortgage either to move home or at the end of the
mortgage term Redemption Penalty
Lenders charge a penalty if you pay off your mortgage when you
are on a fixed rate. Repayment Mortgage
A mortgage where the capital and interest are paid off in monthly
installments.
S (back
to top) Searches
Your solicitor carries out searches to ensure the person selling
the property has a legal right to it and that there is no other
interest shown on the title. Serious Illness Cover
This is a type of insurance which can be taken out as part of your
Mortgage Protection Policy which will pay off your mortgage if
you suffer a serious illness from the insurance company’s
list. click here for Mortgage Protection Snag List
When a new home is built the buyer is recommended to arrange for
a surveyor to check if there are any defects which need to be
fixed before they complete the sale. Sole Agent
When a seller sells their home exclusively through one Estate Agent. Solicitor
Legal representative who acts on behalf of a buyer or a seller
in the purchase or sale of a house. Special Conditions
Specific Terms on the loan offer letter which must be satisfied
before the loan advance is paid out. Stamp Duty
A government tax on buying a home. See Stamp Duty Calculator Structural Survey
A report detailing whether the house is structurally sound and
listing the major and minor defects. This is recommended for
second hand properties. Surveyor
The person who carries out the structural survey of the property.
T (back
to top) Term
The period for which a mortgage is taken out. Title
The legal right to ownership of a property. Title Deeds
The documents which shows the ownership of a property. V Valuation Survey
A survey carried out by the lender to ensure that the house is
not worth less than the proposed loan. This is separate to a
structural survey which is recommended for a second hand property. Variable Rate
An interest rate that can rise or fall, depending on prevailing
rates set by the European Central Bank (ECB)
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