House buying jargon explained

Legal jargon

Completion

When you have the legal right to the property after the sale has been finalised. Contract - Entered into by the seller and buyer of a property which only becomes binding on exchange of contracts.

Exchange of Contract

When the two legal firms representing the seller and buyer swap signed contracts. After-which the buyer then pays a deposit.

Conveyancing

When the property legally transfers from one owner to another.

Deeds

The legal documents which assign the ownership and boundary of property and land.

Missives (Scotland only)

Contract between buyer and seller (i.e. the Offer, Qualified Acceptance and any subsequent formal letters exchanged by their solicitors).

Financial jargon

APR

Which stands for Annual Percentage rate, is the total cost, including arrangement and interest charges, of your mortgage loan. Shown as a percentage rate, it makes it easier for you to compare it like for like with other rates.

Reservation Fee

If you're buying a new build home, most developers will ask you for a pre-contract reservation fee to secure your plot. If your sale goes through, this amount is then deducted from your purchase cost. If the sale falls through, you may not get the full amount back as it may be used to cover administration costs.

Deposit

 The part payment of the agreed purchase price you'll make on exchange of contracts.

Agreement in Principle

This is usually the first step to getting a mortgage. Also known as a Mortgage Promise or a Decision in Principle, it outlines how much you could borrow before applying. Your bank can provide this through an online process.

Early Repayment Charge

If you decide to pay your mortgage off earlier than the agreed repayment period, you'll incur a charge. It could be a flat percentage of the loan total or a fixed fee.

Stamp duty

When you purchase a property, you have to pay tax to the Government at the point of completion. The fee varies as it's based on a percentage of the purchase value of the property. Known as Land and Buildings Transition Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales.

Mortgage offer

The formal written offer you'll receive from a bank or building society to lend an approved amount against a property.

Offer

An offer you make as a prospective buyer to purchase a property. It's not legally binding at this point.

 

Learn more about the legal steps of buying a new home.

House buying jargon

Building Survey

A detailed evaluation of the structural condition of the property, highlighting any issues in detail. If you're buying an older property as opposed to a new build, it's one of the more expensive survey options. However, it is recommended for your peace of mind.

Chain

If you're buying an older property, you're likely buying from someone who is selling their home at the same time as you. Therefore, all parties become reliant on each other to complete the transaction. The entire chain can collapse if just one of the party pulls out. Buying a new build home is a good way of avoiding ending up in a chain - so you can get moving sooner.

Energy Performance Certificate

Your seller, whether that's the current homeowner or a developer, will provide you with a value Energy Performance Certificate (EPC). This gives you details about the energy efficiency of the property. You can also find the report of your new home, by searching on the EPC Register.

Fixtures and fittings

This refers to non-structural items - such as curtains and carpets - that could be included in a sale.

Gazumping

This is when you've had an offer accepted, but the seller accepts a higher offer from another buyer before the sale of the property. Although sometimes unfair, this is a legal process in both England and Wales.

Searches

These are checks on local authority records that show up planning applications, highways, restrictions and land charges. Your solicitor may request further searches and ask for payment for these in advance.

Under offer

When you haven't exchanged contracts yet but your offer has been accepted by the seller.

Now you've got to grips with all the complicated home buying terminology, it's the perfect time to find your new home from a variety of different locations in Britain including Leicestershire, Merseyside & Godmanchester.