Glossary of Terms.

Agency Fee: the fixed percentage of the property's sale price that is payable to the solicitor .

Agreement In Principal: A document provided by a mortgage lender showing the prospective buyer will, subject to valuation of the property, be eligible for a mortgage .

APR (Annual Percentage Rate): Intended to reflect the true cost of borrowing, taking into account the cost of taking out a mortgage.

Arrangement Fee: The fee charged by a mortgage lender on completing the mortgage arrangements .

Arrears: Overdue payments whether rental, mortgage or ground rent.

Balance Out Standing: The amount owed on a loan.

Barrister: Represents clients in the likes of the High Court.

Bridging Loan: A loan enabling a buyer to complete the purchase of a property before he has received the proceeds from the sale of his old one .

Buyers Market: The state of a falling property market when the sellers will reduce their price to sell the property.

Buyers Position: Describes the position of a buyer, whether he is a cash buyer, first time buyer or a buyer who is in a chain etc.

Buy To Let Mortgage: A mortgage designed to encourage investors into property to let.

Capital Gains Tax: Tax payable on the profit arising from the sale of a property.

Capital Growth: The increase in the value of the property in the market as a whole.

Capped Rate Mortgage: A mortgage with a top limit set for the interest rate .

Cash Buyer: Someone who does not need a loan/mortgage.

Cash flow Positive: Where your overall income is greater than your costs.

Cash flow Negative: Where your overall income is less than your costs.

Chain: A number of people dependent on one another's property sale and purchase before they can complete on the own.

Comparable: A process to measure the value of your property .

Conditions of Sale: Standard terms in the contract of a property sale stipulating what has to be done before the transaction is completed.

Contract: The agreement to sell a property that becomes binding when buyer and seller exchange.

Conveyancing: The transfer of the legal title of a property from one person to another; the legal aspect of buying a property.

Covenant: A promise in a deed to undertake or to abstain from specific stated situations.

CRA: Credit Reference Agency.

Current Account Mortgage (CAM): A flexible mortgage whereby the outstanding balance of your current account is offset against the outstanding balance of the mortgage .

Density: The ratio of total build area in proportion to plot size .

Deposit: A lump sum paid on exchange of a contract.

Disbursements: Expenses incurred by the solicitor or on your behalf during conveyancing.

Discounted mortgages: A guaranteed deduction in the SVR over an agreed period.

Diversification: Spreading your portfolio across a range of investments to reduce risk.

Downside: The disadvantages or hazards of a deal.

Draft Contract: Legal document setting out the terms of sale used as a starting point for negotiation between solicitors handling a property transaction .

Due diligence: The research and contract checking necessary before making investment decisions.

Early Redemption: Paying off a mortgage before the end of its term.

ERP: Early Redemption Penaly. A financial a financial penalty levied to cover administration costs when a loan is repaid early.

Endowment Mortgage: A loan on which the interest only is paid throughout the term. It is linked to an endowment policy and the capital is paid off in a lump sum at the end of the term .

Endowment policy: An investment, including life insurance, linked to a mortgage loan to pay off the loan at the end of its term.

Equity: The value of a property after deducting payment and other costs.

Escrow: Money held in account by a third party to be released when pre-agreed obligations are fulfilled.

Exchange of contracts: The process by which the sale and purchase of a property becomes legally binding.

Finder: A person or company who is paid to locate and select property according to your brief.

Fixed Rate: Interest charged o a mortgage as a fixed amount over a set period.

Flexible mortgage: A loan allowing overpayment or underpayment that can be set against a current account.

Flipping: selling off plan property on or before it is completed.

Free Hold: Outright ownership of property and the lad on which it stands.

Ground Rent: An annual sum paid by a leaseholder to the free holder.

Guide Price: An estimate of the eventual selling price.

Home Buyers Schemes: Schemes run by Housing Associations to sell off their property.

Home buyers Report: A less detailed survey than a full structural survey but more thorough than a valuation.

Hotspot: A location where demand is high and supply is restricted.

Index Tracker Mortgage: A rate of interest that is at a fixed margin above the Bank of England base rate and follows it fluctuations.

Independent Financial Advisor (IFA): Offers products from the whole of the marker .

Interest Only Mortgage: Monthly repayments are made to pay off only the interest on a loan.

Interest Rate: The percentage charged each year by the mortgage lender for the privilege of borrowing the loan.

Joint Mortgage: A mortgage obtained between two people who are equally liable for its repayment.

Joint Tenants: Two or more people holding property as co-owners.

Land Certificate: A certificate issued by the Land Registry confirming the ownership of a property.

Land Registry: Government department responsible for keeping a registrar of all the properties in England and Wales which have registered titles.

Lawyer: The general term for any law professional.

Leasehold: Ownership of a lease for a limited number of years after which the ownership returns to the freeholder.

Leveraging: Using capital in such a way that Positive or negative outcome is magnified.

Loan to Value (LTV): In reference to a mortgage or other borrowings.

Local Search: An application to local authorities for information on a property and its surrounds.

Mortgage: A loan for which the property is security. The lender assumes certain rights including the power to sell the property if the payments are not made.

Mortgage protection Policy: Insurance to protect the owner against inability to make repayments due to redundancy, sickness, accident or disability.

Multi Tied Financial Adviser: Offers a range of products from a limited range of providers.

Negative Equity: This occurs when the value of your property is less than the amount that you borrowed to buy it.

Notice: The official request from the landlord or freeholder asking the tenant to vacate the property.

Payment Protection insurance: If unable to work for a time ,this insurance covers your mortgage repayments.

Pension Mortgage: A mortgage where the repayment vehicle takes the form of a pension plan.

Portfolio: You collective property investments.

Principal: The loan against which the interest is calculated.

Redemption: Pay off a loan.

Redemption fee: A fee often payable when you pay off a mortgage early and take out a further mortgage with the same lender.

Remortgage: When a second mortgage is taken out against the capital in the first property.

Repayment mortgage: Loan repayments cover both the loan and the interest throughout the period of the loan.

RICS: Royal Institute of Charted Surveyors.

Seller's Pack: Contains information invaluable to the buyer, eg. leases, deeds, searches and homebuyers report.

Shared Ownership Scheme: A way of buying property from a registered landlord.

Stamp Duty: A fee levied by the government every time a home exchanges hands.

Solicitor: Specialise in specific area of law.

Standard Variable Rate: The standard interest rate on a mortgage which is usually a point above or below the base rate and moves up and down with it.

Subject to Contract: Words that should appear in every correspondence between a buyer and seller; or their solicitors: before contracts are exchanged.

Sum insured: The amount that is paid out when a term insurance policy matures or the event insured for occurs.

Tenants In Common: Two or more people who share ownership of a property so that when one of them dies, their share does not automatically pass o to the other owners but can be left to whomever they choose.

Title Deed: A deed or document proving legal right to land or property.

Tied Financial Advisers: Tied to selling the products of one provider.

Tracker Mortgage: A mortgage with a interest rate that tracks the Bank of England base rate.

Trail Commission: An annual fee paid over and above the set up fee for a product bought through a financial adviser.

Under Market Value: When a property is priced at less than the verifiable average of comparable properties.

Upside: The advantages or benefits of a deal.

Utilities: The companies who provide gas, electricity, water etc.

Valuation: The price put on a property by an estate agent and also by the building society when assessing whether it is sufficient security for the loan they have been asked to lend.

Variable Rate Mortgage: Monthly payments are made at the mortgage lenders standard variable rate (SVR).

Vendor: The seller.

With Profits Policy: A policy often used with an endowment mortgage whereby the bonuses from a life insurance policy are added to the original sum assured when the policy matures.

Zoning: Areas for certain purposes e.g. residential, agriculture or commercial.