Buying a house is probably the biggest purchase you’ll make, so you need to fully understand the jargon used in this process. We’ve put together an A – Z list of the most frequently used terminology and what it means.
A –
Agreement in Principal (AIP) – a mortgage advisor will provide this document for you outlining how much you can borrow. This can be used to provide the seller with the information that you can afford to buy their property.
Arrangement Fee – most mortgage lenders have a set-up fee which they usually add onto your loan, of course this means you will pay intrest on this for the term of the mortgage.
B –
Building Insurance – this covers you for any structural damage that may happen to your home and something you need to have in place when you take out a mortgage.
C –
Chain – this is the name given to a collection of people and properties who are involved in the buying and selling process. This can be many people or sometimes just two.
Completion – after contracts have been exchanged the final stage is completion which occurs when the balance owed is in the sellers bank account.
Conveyancing – a conveyancer will access the property and perform a Local Authority Search, it also ibncludes Land Registry Fees and LBTT.
D –
Deeds – this documant outlines who owns the property and allows the transfer of the property ownership from the seller to the buyer. The document also holds the details of the mortgage. Allowing the mortgage lender to take ownership of the property should you default on any payments.
Down Payment – this relates to the deposit you will pay in advance for the property. This amount may vary, but generally it should be about 10%.
E –
Equity – is the difference between how much your property is valued at and how much you still owe on the property.
Exchange of Contracts – a legally binding document where contracts are exchanged between the buyers solicitor and the sellers and your deposit is paid, transferring ownership of the property to you.
Our next jargon busting article on terminology used when buying a house will cover the letter F onwards. So keep a look out for more stripped back jargon.
In the meantime why not take a look at our Home Hub for more information about moving home.
