Woodhouse Property Consultants

Advance Another word for mortgage. You may also find reference to 'principal sum' and 'capital sum', which also refer to the mortgage, as does the term 'legal charge'.	Assignment Certain items, such as leases and endowment policies cannot legally be sold, only assigned or reassigned. It amounts to the same thing: ownership is transferred in return for payment.
Bonuses In the context of an endowment policy, it is the bonuses that will give you the profits at the end of the term. This is why it is important not to cash in an endowment in the early years.	Capped Rate The interest rate charged on this type of mortgage will not rise above a certain level – the cap – within a certain period.
Charge A charge against a property means that there is a debt. Usually the main charge will be that of the mortgage lender. However individuals can place charges against a property following a County Court Judgement. Before buying, a conveyancer should check against the Land Registry’s Charges Register for all charges, as the new owner will be liable if they are not discharged prior to sale.	Completion Date The day upon which all moneys are paid and the keys are handed over.
Contract Deposit A sum of money paid upon contracts being exchanged. Usually 5% to 10% of the contract purchase price. If selling another property at the same time, it might be possible to pass onto your vendor the contract deposit that your purchaser pays to you. Check this with your solicitor.	Conveyancing The process of transferring the ownership of property from one person to another.
Covenant A legally enforceable written promise relating to property documents, including leases. A restrictive covenant may bar certain activities such as extending a property. In leases, covenants may require floors to be carpeted so as to reduce noise levels for others, for example.	Discounted Rate Mortgage A mortgage with a variable interest rate but discounted for a set period.
Disposable income Income that is left after paying your mortgage, life assurances/pensions and other living expenses.	Draft Contract The document that is prepared by the vendor’s solicitor setting out the Title for the property that is to be sold together with the terms of sale.
Early redemption penalty Where a mortgage is for a fixed or capped rate of interest, or where it is discounted, there is usually a penalty to pay in the event that the mortgage is repaid before a set period of time.	Easement The right of one person to use someone else’s property in certain circumstances. These usually occur where there is a need for access roads, drainage, telephone lines over another’s property.
Endowment Linked Mortgage The borrower pays interest only to the mortgage lender. The Endowment is a form of life assurance policy with a built-in investment element that is designed to pay off the principal sum when it matures. It should be noted, however, that endowments are not guaranteed to be worth enough to pay off the principal sum on maturity.	Equity The net value of a mortgaged property after the deduction of charges/mortgages.
Exchange of Contracts Once the parties are satisfied that the Title is good and all of the other terms of the sale/purchase are understood and the necessary funding is in place, then both parties sign their part of the contract. Following this each solicitor sends their client’s part to the other side’s solicitor. Signing a contract does not bind a party to a sale or purchase. But once contracts are exchanged then the transaction becomes legally binding. On exchange of contracts the purchaser is responsible for buildings insurance.	Fixed rate The interest rate is fixed at a certain level for a specific number of years. After that interest is charged at the variable rate unless the lender agrees to another period of fixed interest at the rate that is appropriate at that time.
FTB First time buyer.	Gazumping Raising the price of a property or accepting a higher offer after having accepted an offer from a potential purchaser.
Gazundering Lowering the amount of an offer to a vendor, usually just before exchange of contracts.	Guarantor Someone who guarantees another’s mortgage payments. If the borrower is unable for any reason to repay their mortgage, the guarantor will have to make the payments on their behalf, or possibly face having any property they put up as security repossessed by the lender.
House Doctor An American idea and a recent import to the UK- someone who has expertise in presenting residential property to the market in order to make it more appealing to potential buyers. The intention is, of course, to boost the property’s value. This relies upon the fact that most of us totally lack imagination but know what we like when we see it!	(ISA) individual savings account A tax-free investment scheme that has replaced Peps (Personal equity plans).
ISVA The Incorporated Society of Valuers and Auctioneers.	Joint tenancy When two or more people own a property in common, and wish the share of any one who dies to pass automatically to the survivor(s). In contrast, see ’tenancy in common’.
Land Charges Search (charges stated below might vary according to the local authority) Local authorities carry out official local LAND charge searches for solicitors and licensed conveyancers on behalf of purchasers. These searches are on the land as described or marked on a plan as submitted. Most searches for residential properties are "standard" ones. These reveal the local land charges register items - developments, extensions planned to neighbouring property, highways changes immediately affecting the property (if any). There are a further 22 optional enquiries which may be asked for an additional £6 (approx.) each and for a fee of £15 (approx.) the council will answer further questions as required. A further option would be to search on the adjoining land and the fee for an extra parcel (submitted at the same time as the search) would be £10.20p (approx.).	Land Registry The Government department responsible for keeping and updating details of all registered properties. '’Office copies'’ containing details of ownership and charges are readily available in writing and, nowadays, also available online to subscribers.
Lease A contract for the occupation of a property.	Lessee Leaseholder – the owner of a leasehold property.
Lessor Landlord – the person who grants a lease and enforces its terms.	Loan-to-value The ratio that expresses the size of loan that can be borrowed as a percentage of the valuer’s valuation of the property. For example, most lenders will grant up to 95% of their valuer’s estimate of its value – the remaining 5% deposit to be found by the borrower. Some lenders will advance 100% of loan to value, but usually charge a higher interest rate.
MIGP Mortgage Indemnity Guarantee Premium. This is an insurance policy designed to protect the lender from any loss of money if your home is repossessed and sold for less than the value of your mortgage. You may have to buy this insurance when you take out the mortgage if you have a large loan-to-value ratio – usually if you are borrowing more than 75%. MIG can be expensive, often costing more than £1,000. Some lenders spread the premium over the term of the mortgage, others make no charge for it. Although you may pay for this insurance, any money that is paid out by the insurer goes to the lender.	Mortgage Offer The formal offer of mortgage defines the amount that is to be paid together with all other terms of the loan, including the term and initial interest rate etc.
NAEA The professional body for estate agents – The National Association of Estate Agents.	Net Profits A self-employed person’s income is taxed according to their net profit after deducting legitimate business expenses. The amount that a self-employed person might borrow is usually calculated according to the level of their net profits. Thus, a creative accountant who succeeds in reducing a client’s tax liability might also inadvertently reduce the borrower’s borrowing ability.
Office Copy Entries For every land transaction in England and Wales, the Land Registry records details of ownership and charges onto a certificate called the 'Office copy'. Whereas every transaction once might have entailed having to examine a pile of old transfers in order to establish good title, today the certificate from the Land Registry significantly reduces the amount of investigation that is necessary and, thus, the chances of error.	OEA The Ombudsman for Estate Agents - the independent Government-backed body that exists to protect the public from rogue estate agents. Only 25% or so of UK estate agents are members. Check that you are dealing with an OEA member before complaining. If you want to make a complaint against a non-member then the OEA will not be able to help!
PIA Personal Investment Authority – from March 2000 this will be known as FSA – the Financial Services Authority.	Preliminary Enquiries Important questions asked by the buyer’s solicitor of the vendor’s solicitor before contracts are exchanged.
Additional Enquiries A buyer’s solicitor sometimes needs clarification of answers provided to Preliminary Enquiries, or they may simply think it appropriate to ask extra questions.	Replies to Preliminary and Additional Enquiries The vendor’s solicitor’s replies to the questions raised. Often it will be necessary to ask a vendor to assist in responding.
RICS The Royal Institution of Chartered Surveyors.	Self-Certification Commonly for self-employed people with a large deposit but limited earnings track record. (Inaccurately) known as a "non-status" mortgage. Some lenders will accept the applicant’s assessment of their net profits.
Stamp Duty A tax paid by the purchaser. Currently there is no Stamp Duty for purchases up to £60,000; 1% of the contract purchase price between £60,001 and £250,000; 3% of the total contract purchase price if it is between £250,001 and £500,000; and 4% of the total purchase price where the contract sale price is £500,001 or above.	Subject to Contract For the entire period between a sale/purchase being agreed and exchange of contracts, the transaction remains "subject to contract" which means that it is not legally binding upon either party to proceed to exchange of contracts. Either party is legally entitled to withdraw or amend the terms of the agreement for any reason.
Tenancy in Common If one person dies, his or her property rights pass on according to their will.	Term Insurance A form of life insurance taken out exclusively for the period of a mortgage to protect the lender in case of the death of the borrower. This is an inexpensive form of insurance, however there is no investment element built into it. Thus, if the insured person lives then there will be no return on the premiums paid.
Title This is the right to ownership of a property. Title Deeds are the documents conferring ownership of land or property. In the vast majority of cases, where the land is registered, the Title Deeds will be the Land Certificate or the Charge Certificate issued by the Land Registry.