Glossary of Property Terms

A

Acceptance

Written (document) confirming to a lender that a borrower wishes to accept a mortgage offer.

Advance

Another way of describe your mortgage loan

Agreement

Written (document) outlining the terms agreed between the buyer and the seller. Binding both parties to complete the sale/purchase transaction also known as Contract.

Agreement in Principle / Approved in Principle

 A certificate that some lenders will give you to show the amount they will be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.

Annual Percentage Rate (APR)

An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan

ARLA Propertymark

It is the UK’s foremost professional and regulatory body for agents. When using ARLA agents, consumers have the peace of mind their agent will provide a professional service and their money is safeguarded by Property mark’s Client Money Protection scheme.

Arrears

Amount that is overdue in relation to a mortgage, which may result in action by a lender to repossess the property.

Asking Price

Price set by the seller of a property as what they hope to achieve.

Assignment

Transfer of a right or claim to a property from one party to another.

Assured shorthold tenancy (AST)

Allows a landlord to let out a property to a tenant while retaining the right to repossess the property at the end of the term of the tenancy. However, the landlord will need to give the tenant at least two months’ notice of any reoccupation.

Auction

Method of sale whereby a property is sold to the highest bidder.

B

Balance Outstanding

the amount left owed on a loan at any given time.

Base Rate

The interest rate set by the Bank of England for lending. Variable mortgage rates will often be adjusted depending on movement in the Base rate.

Best and Final

An offer in real estate is a prospective buyer’s last and highest offer. It’s typically submitted in response to a bidding war. A seller who has received several offers will ask either all bidders or the top bidders to submit their best and final offers.

BMV

BMV stands for Below Market Value. It’s a property deal where the property can be purchased at a discount to its current market value.

Borrower

A person or organisation that takes out a loan from a bank under an agreement to pay it back later, typically with interest.

Boundaries 

these indicate the extent of the property and are usually marked on the ground by fencing or hedging. Always check exactly where these are if a property comes with land.

Bridging Loan 

Is a temporary loan that helps you to buy a new property before your existing home has sold.

Broker

a person who buys and sells goods or assets for others.

Building insurance

a useful type of insurance that will protect your home if it needs to be completely rebuilt or repaired, such as from a flood or fire.

Buyer

a person who makes a purchase.

Buy-to-let

just as it sounds, this is when a landlord will buy a property to rent it to tenants. You will need a buy-to-let mortgage and check you have the correct buildings and contents insurance cover.

Buy to let mortgage

Mortgage designed for buying property that is intended to be rented to tenants for investment purposes.

 

 

 

C

Capital

Capital is a term for financial resources, as well as for tangible factors available for use. Capital can be invested in buildings or property in order to rented out or sell it in future to generate income. Mostly of the time the word “Capital” in the real-estate industry reflects on the amount one borrowed against interest from the bank for the investment in property.

Chain

A common word used in real estate in the UK, it is referenced to the process of buying or selling property. It is a sequence of links between buyers and seller reliant together upon one another to complete the transaction in order to purchase. The chain can also be interpreting as the line of buyers and sellers for property. If one person drops out of the chain, the change of chain collapses is greater due to the seller not being able to continue with their moves. In contrast, the term chain-free property is the opposite of the original term and is not that commonly used in the UK.  Property is then being sold by vendors who does not need to purchase a new property after they sell.

Charge

Is the security over an asset (property) which gives the lender the right to have the particular assets. A charge does not transfer ownership, but it is merely a security relied upon the lenders when a mortgage is granted.

Chartered Surveyor

Is a professional highly trained and classified by formal designations as members of the Royal Institution of Chartered Surveyors (RICS), who is suitably qualified to carry out a chartered building surveys and reporting. Working in all field of property and building consultancy, their duties include looking for structural defects in buildings and valuing property. Additionally, offering expert advice about the property, construction, and related environmental current condition of a property.

Conditions of Sale

Terms defined in the contract which the buyer and seller agree to purchase or sell property. Condition which determine the rights and duties of the buyer and seller. There is standard condition of sales set by the Law Society to be amended by the solicitor including some special conditions. Terms of sale could involve price and payment of the property, the risk, warranty, Liability, limitation of liability and many other sales or property related conditions.

Contract

Document outlining the terms agreed between the buyer and the seller and legally binding both parties to complete the sale/purchase transaction. Also known as formal agreement between both parties which is prepared by a solicitor licensed conveyancer detailing terms and conditions of the agreement.

Conveyancer

Conveyancers are those suitably qualified persons who have undertaken the conveyancing process. In recent years specialist have appeared solely offer conveyancing as a dedicated service. However, traditionally they used to be, and most of them still are, solicitors. Some solicitors decided to specialise, or licensed and regulated firms that are not qualified as solicitors. The conveyancer services maybe be charged as a fee. The fee is the cost of the conveyancer during their job and is made up of a fixed fee and a set of disbursements.

Conveyancing

The legal and administrative process of transferring property title from one person or party to another. Often undertaken by solicitors or licensed specialists and is a necessity for most property sales taking place within the United Kingdom. A conveyancing transaction normally has two major phases. The first phase being ‘the exchange of contracts’, when equitable interests are created. The second phase being ‘completion’ (also called settlement), when legal title passes and equitable rights merge with the legal title.

Council for Licensed Conveyancers (CLC)

Is the governing body that licenses and regulates conveyancers. The CLC regulatory body in England and wales was established by the administration Act in 1985. The organisation was set up in order to maintain consistent standards of professionalism among persons who practice as licensed conveyancers. To obtain a licence for conveyancer, it is required to undergo and complete the examination and practical training, which are provided by the CLC. It is to be mentioned to hold a licence you must be 21 years of age and be considered by the CLC to hold a license.

Covenants

Legal obligations and restrictions, known as positive and negative covenants respectively, can incorporated in the title requiting to a property. Obligations require you to maintain something within your boundaries whilst restrictions prevent the construction of specific structures. Mostly being positive in nature, such as a covenant to maintain a fence or regularly do garden maintenance. They can also be negative, for example a covenant prohibiting to build an extension or even keeping certain types of pets.

 

D

Declaration of Trust

Is a legally-binding document or oral statement, also known as deed of trust, that records the financial arrangements between joint owners of a property with regards to the division of proceeds upon completion. In the U.K. a declaration of trust establishes true ownership of the property being held for benefit of one or more other individuals. An individual can be treated as a property’s owner even if the individual is not designated in the land registry as the property. It is possible for the trust itself to be indicated in the land registry to show the listed owner is not the sole owner of the property. The Declaration of Trust purpose is to remove any uncertainty as to what will happen to each person’s investment, with the financial agreement between both parties clarity will be provided.

Deed

Legal document which is used to transfers ownership of property from the old owner (the grantor) to the new owner (the grantee). Deeds may contain limitations or promises (covenants) which are enforceable even if unwarranted or not supported by a consideration. Some deeds serve as evidence of a pledge to carry out one or more specified actions, whereas others evidence that such actions have actually been carried out. In order for a deed to be enforceable, it must firstly state on its face that it is a deed. Secondly, accurately describe the property which is the subject matter of the deed. Thirdly be validly signed in presence of the prescribed number of witnesses. Lastly be handed over or delivered to the grantee as a deed.

Deposit 

In a rental agreement, this is the amount of money a buyer is required to pay the seller to the seller on exchange of contracts in order to secure a property. This is also known as Down Payment. The payment for purchase and rental property can be different. For rental property, they usually need to pay from two to three months of rent in advanced, in contrasted with a purchase of property the deposit could be 10% or other percentage of the purchase price of the property they have to pay as deposit.

Detached

Is defined as a property or residential unit that stands alone and has no shared outside walls with an adjoining property. A detached home, is a permanent dwelling, usually set on a separate lot and includes ownership rights to the land on which it is situated. A detached home is also called single detached dwelling, due to been almost always considered as a single-family home, meaning all internal areas are shared an in common.

Dilapidation

Dilapidation is a term that both landlord and tenant need to understand. Dilapidation’s represent exit costs for a tenant at the end of their lease. The tenant is usually responsible for the cost of repair or replacement. Most of the costs are typically attributed to restoring the property back to its pre-let state or original state. The tenant must adhere to required level stated in the lease as it is part of their obligations. When breaching the lease covenants, actions will be taken to meet the outlined level. Before the landlord has the capability to make formal claim against the tenant, A schedule of dilapidation’s must have been drawn up. This is a document which include content of all the clauses of the lease, which state tenant obligations regarding the state or condition of the rented commercial property.

DIP

Decision in Principle is also known as an agreement In Principle (AIP) or a Mortgage promise. Prior to any application being made, the lender undertakes a Decision in Principle. With the information provided by the buyer a lender will take some basic information and perform a credit search and credit score before coming up with a figure that ‘in principle’ it would be able to lend. An Agreement in principle is able to be issued within a few minutes and could even be obtained for free. A DIP can be submitted at any point in your journey in obtaining a mortgage. In terms of re-mortgaging there is less external requirement to have this information so a DIP would be submitted once the right lender and product has been recommended to you.

Disbursement 

It is a form of payment from a public or dedicated fund. It means a payment mode on behalf of a client to a third party which reimbursement is subsequently sought from the client. Third party costs relating to transaction paid out commonly by solicitor to cover items such as Stamp Duty, Land Registry, Local Authorities, etc. The Solicitors Accounts Rules define them as any sum a solicitor spends, or going to spend on behalf of the client or trust, including any VAT elements. It is expected that a solicitor should ask the client for approval in case larger disbursements, which need specific authority.

Discharged 

Termination of a mortgage obligation when no further payments are required from mortgagee to the mortgagor. The discharge of a mortgage is a document formally specifying that a mortgage debt have been paid. When a mortgage is discharged it is typically recorded in a local property deeds office. Discharge can also be referred as satisfaction or release of mortgage.

Down Payment 

A down payment is the amount of money a buyer pays to the seller at closing to fund purchase in order to secure a property. Usually this is expressed as a percentage of the total home purchase price. The amount required for the down payment can vary depending on the type of loan. Down payments are usually paid via wire transfer or cashier’s check and must be paid at closing. In case the down payment is less than 20%, it is required for the borrowers to have mortgage insurance. This is not the always the case as some lenders may require more or less than that. A lender might ask to provide whole or even more than the total down payment to protect the lenders in case the buyer will be unable to pay the monthly mortgage. Down payment can be beneficial as it can offer better interest rate and mortgage terms and creating instant equity. 

E

Early Redemption Charge (ERC)

Also known as Early Redemption Penalty is an additional amount or fee the borrower may be required to pay to the lender when the payoff of a mortgage or loan is before the scheduled term of the credit. The amount could reach to an equivalent of one or two months’ interest. Depending on the earliness of termination of a loan or mortgage has major influence how much you could pay extra. It is possible that early repayment penalty can add a considerable cost to your loan. Typically, the earlier in the credit agreement you repay the loan, the higher the charge as the interest component of the loan repayment makes up a higher proportion of the repayment. Any charges on early payoff must legally be outlined in the Schumer Box before applying for a loan.

Easement

An easement is a legal right to use another’s land for a specific limited purpose. When someone is granted an easement, the person granted non-possessory right to use or enter onto to the property of another person. However, the legal title of the land remains with the property owner. An easement is considered as a property right in itself at common law and is still treated as type of property in most jurisdictions. It can be helpful for providing individuals to cross or gain access to property to be able to cross it to reach their home. Sometimes property owners ask additional pay or put an expire date on the easements for the use of the property. The payment can be made once, annually or in any other way both parties agreed up on.

Engrossment

Engrossment is the final version of a legal document prepared by a solicitor for signing by the parties. The process of preparing the final agreed from of a contract and its incorporating schedules and appendices so it can be signed or executed. Historically, this may have involved hand-writing the contract on thick paper and having bound. Now it is more likely to be printed and then bound. Engrossment can be required for a wide range of legal agreements and are either under seal or under hand. Preparation for execution is to have two engrossed contracts, one for the supplier and one for the client.

Equity

Homeowner’s unencumbered financial interest in a real property, calculated as the difference between the market value of a property and the balance outstanding on the mortgage. The equity of the property increases as the debtor makes payments against mortgage balance or as value of the property appreciates.

Estate Agent

Property professional who markets property on behalf of sellers and who charges a fee, usually a percentage of the selling price. Some services such as advertise houses or arrange viewings for property are few of many tasks they execute.

Excess

This is the fixed initial sum of any insurance claim that the insured party agrees to pay as part of the policy conditions – the insurer pays the rest. Generally, a policy will have an excess applied to it. This indicates the initial amount of any claim that you will pay and the insurer will pay the difference. Excesses can often be increased or decreased to affect the premium. Increasing your excess will often result in a lower premium as the insurance company decreases the potential pay-out in the event of a claim.

 

F

Financial Advisor

A financial advisor is a person responsible for providing financial advice and arranging some of the financials to purchase the property for the client. Financial advisors can also arrange any life insurance or mortgage protection insurance. Financial planners, investment managers, and those who provide financial product over all can be viewed as a financial advisor.

First-Time Buyer (FTB) 

First-Time Buyers, also referred as FTB’s, are individuals or joint applicant who purchasing a property or flat and have not previously owned a home and therefor has no property to sell. A first-time buyer is usually desirable to a seller as they do not have to sell a property, thus will not involve a housing chain. Often mortgage lenders seek to attract first-time buyers to their business with increasing competitiveness within the market.

Fixtures & Fittings

Fixtures and Fittings are those non-structural items in a property that should be listed to be included in a sale. Fixtures are items that are fixed to the walls or floors, for example kitchen units, Electric sockets, Central-heating boilers, and radiators. In contrast fittings, also called chattel, are free standing items, such as carpets, paintings, bed, sofa, blinders, and curtains. During a property transfer, there can be disagreements regarding the figures and fittings. It’s important that the buyers know what is included and excluded when purchasing the home and which fixtures belong to the landlord are the end of the term of a lease.

Flying Freehold

Flying Freehold is the English legal term for a freehold property overhangs a different freehold property or land. Commonly a room situated above a shared passageway in a semi-detached house, or a balcony which extends over a neighbouring property. Originally in the law, a freehold property included the ground, everything below it and everything above it. By the 13th century, the courts had begun to accept that one freehold could overhang or underlie another. This concept was settled law by the 16th century. The upper property owner does not own the building or land underneath the ‘flying’ part of an upper floor room.

Freeholder

Freeholder is having outright ownership of both the property and land on which it stands. Opposed to a lease holder, a freeholder estate in land is where the owner is in possession of the land and property has no time limit to his period of ownership.

Full Structural Survey

The term Full Structural Survey, also called a Building survey, is a description of a comprehensive and detailed look at the condition of the property, structural issues and dealing with hard to reach places. A detailed report is made after following a thorough inspection carried out by a Chartered Surveyor. When moving many people will let a professional undertaken the inspection to spot any issues and work out how to remedy them before potential disasters. Many surveys are available, which differ from price point, the type of information given, and the level of detail. However, depending on the level of detail the report needs to be made, the price will be significantly affected why that option.

G

Gazumping

Gazumping is used to describe a situation in which the seller of property accepts a verbal offer from offer from a potential buyer but subsequently accepts an offer from another party. The term as well applies to a situation when the sell raises the asking price after having verbally agreed a lower price. In both cases the original party is left in a difficult position and might need to lose the purchase or offer a higher price. While your verbal contract was maybe accepted, but until the contracts haven’t been exchange, it makes the agreement no legally binding. This practice is legal in England and in a couple of other jurisdictions.

Gazundering

Gazundering is used to describe a situation in which a potential buyer of real estate lowers his/hers original bid before the transaction is finalized. In this situation, the seller is in a fundarable position as their might not be other potential buyers. The risky strategy is used, when the buyer is confident the seller will accept the new offer. However, the seller is under no obligation to accept the gazunder, putting negotiations back to square one.

Guide Price

This is to give an estimate of price the property owner generally wants to gain out of, but the offers could be under or over this amount. The estimated amount need be used as a guidance for the customer to come up with an offer close to what the other parties is looking for. Guide prices can also be used as tool to increase interest in a property, instead of a concrete asking price. With use of guide prices, the seller need to take in account, that negotiation will be more occurring.  

Ground Rent

Ground rent is an agreement between a landlord and tenant, there the tenant pays for the right of using a plot of land. Ground rent is the annual fixed or escalating fee the tenant pays to the freeholder in order to occupy the land on which a property stands. The tenant owns the property on the land, however does not the land where the property is standing on.

Guarantor

A guarantor is a third party, such as a parent or close relative, who agrees to pay your rent if you don’t pay it. If the referencing process does not fully approve a tenant, they can ask a guarantor to support them. A guarantor (usually a parent/guardian) will agree to take joint responsibility for the rent for the property if the tenant fails to. Guarantors are required to pay any rent arrears (if the tenant does not pay) and for any damages costing more than the deposit. Your landlord can ultimately take legal action to recover any unpaid rent from your guarantor. Some private landlords require a third party to act as a guarantor for the rent payments before they’ll agree to let a property to a student. Your landlord may want to check that your guarantor is able to pay the rent in the same way that they’ve checked your ability to pay. For example, by carrying out a credit check.

 

H

Hazard Insurance

Hazard insurance, also known as homeowner’s insurance, is a real estate insurance protecting against loss to property caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy. The buyer often adds liability insurance and extended coverage for personal property in the event of damage. Usually covers the value of the home.

House in Multiple Occupation (HMO)

House of Multiple Occupation or HMO, is referred as a property where common areas exist and are shared by more than one household. The bathroom, kitchens, stairwells and even landings can be significant to a common area that tenants share the facilities. It even is possible that HMO’s are divided up to self-contained flats, bed-sitting rooms, or simple lodgings. HMO’s are different from purpose-built blocks of flats, since most result from subdivision of house designed for and occupied by one family. Aside the properties are treated differently to the average one, with more rules and regulations for tenants.

Home Buyers Report 

The home-buyer’s report comments on the structural condition of most parts of the property that are readily accessible. However, it does not involve in-depth investigation or the testing of water, drainage, or heating systems. Standard report conducted by a surveyor on behalf of a buyer to assess value and condition of a property, highlighting major defects.

Home Improvement Agencies (HIA) 

Home Improvement Agencies or HIA are local not-for-profit organisations funded and supported by local and central government. They provide advice, support, and give assistance to help vulnerable, disabled, or elderly homeowners on a low income to repair, improve, maintain, or adapt their property. The purpose of the service is to help people to remain independent, in their own homes, warm, safe, and secure.

Home Information Pack (HIP)

Home Information Pack (HIP) sometimes called a Seller’s Pack, is a compulsory information pack compiled by the seller prior to marketing a property for sale, containing specified information relating to a property. The pack will be a set of documents about the property: Guarantees, an Energy Performance Certificate, local authority searches, title documents, etc. In case you are considering buying a property, a copy of the HIP can be asked to whoever is advertising the property for sale. Mostly an estate agent would be doing that, however another business or individual; usually the vendor’s solicitor could also provide it. They must give you a copy of the pack free of charge. However, they may make a reasonable charge to cover the costs of copying and posting it.

Housing Association 

Housing Association is a not-for-profit organisation set up to provide low cost housing, letting you buy a percentage of the property and pay the rest on rent. Housing associations range from larger organisations to small community-led groups involved in house building and development. Often accessing funding through the Homes and Communities Agency, or private backers. Many help tenants through specialist housing, for example sheltered housing or housing with support services. Many operate home ownership schemes such as shared ownership. Housing associations are usually private registered providers of social housing and regulated by the Tenants Services Authority.

House Price Index (HPI)

The House Price Index also referred as the HPI is a national statistical method of representing changes in the value of residential properties over time. HPI uses data collected residential housing transactions, whether for cash or with a mortgage. The collected data is available at a national and regional level, as well as counties or local authorities.

I

Independent contractor

An individual or business that contracts with another person or entity to provide goods or services in exchange for compensation. Typically, they’ll be contracted in for the specialised knowledge or skills they can provide for a defined period to work on a specific project. Independent contractors are not employees and are generally not entitled to the same rights and protections extended to employees. They are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.

Independent Financial Advisor (IFA) 

Independent Financial Advisor also known as IFA, is a Qualified person using specialised knowledge of the marketplace to select financial products to best suit the needs of their client. Someone that underwent specific training to give financial advice and can act independently without being tied to only recommending the product of any lender. IFA can also

Interest Only Mortgage

Mortgage where only the interest charges are repaid initially. Monthly installments are invested by the buyer and repaid in full at the end of the term. With an interest-only mortgage your monthly mortgage payment only pays the interest element of the loan and not any of the amount you borrowed. To repay the mortgage some borrowers pay into an investment such as an ISA, pension, or an endowment. Others sell their property at the end of the mortgage term

Inventory 

Inventory is a list and valuation of all the contents of a (rental) property, as well as the condition of a property and the structural fixtures, generally used for AST rental properties. When talking about rental property, the inventory could note the condition of items and will form the basis of a dilapidation report at the end of the tenancy. It often includes photographs of specific items and existing damage/defects.

J

Joint Agency

This is when you have instructed more than one estate agent to market your property. The agents “share” commission irrespective of who finds the buyer, the share of commission can however vary percentage wise. Benefits of using joint agency is having access to more contact who may be prospective purchasers, provides a wider marketing campaign, and local agent may be used with a larger more established national firm. The negative impact of using joint agency is that it ca create the illusion that the seller is desperate to sell the property when two agencies advertise the property online.

Joint Liability

This is when there is to be more than one adult living in a property. Tenants together undertaken the same obligation to a third party are considered to have assumed liability. If parties have joint liability, then they are each fully liable for the performance of the relevant obligation. It is generally desirable for the third party to bring proceedings (whether for recovery of a debt or for specific performance) against all co-obligors.

Joint Mortgage

A mortgage where there is more than one individual named responsible for the mortgage. This might be used if you buy a house with a partner or friend, and can also be used by parents who want to help their children buy a property. When you take a joint mortgage, you will usually be “jointly and severally liable” for making the repayments. This means that if one of you does not pay or is unable to pay (due to death, illness, unemployment, or abandonment), the other person is still fully responsible for paying the mortgage.

Joint Tenants

Also known as joint tenancy, is a type of ownership of land where two or more persons buy a property, they are called joint tenants or tenants in common whether the property is Freehold, Leasehold or Common hold. Joint tenants must act as a single owner, and will need to re-mortgage the value of the whole property at the same time. In other words, you have an equal share of the place, and equal rights over it, no matter what you individually contributed in terms of a deposit. If one party dies, their share passes to the survivor(s). If you sell the property, you are each entitled to half the sale proceeds, regardless of how much you each contributed to the purchase price or mortgage repayments. Neither of you has a separate share in the property which can be sold.

L

Lease

A lease contractual agreement grants the lessee to pay the lessor for use or occupancy of land/property during a specified period in exchange for rent. Real estate lease agreements consist of numerous elements that set out the rights and obligations of the lessor/landlord and the lessee or tenant. In the absence of restrictions on use, the tenant can normally utilize the property for any lawful purpose.

Leasehold

A property where the land it stands on is owned by someone else. Method of owning property (usually a flat) for a fixed term but not the land on which it stands. Possession of the property will be subject to the payment of an annual ground rent. When the lease expires, ownership of the property reverts to the freeholder.

Lien

A lien is a right granted by a property owner to another that secures payment of a debt or some other obligation. In real estate, the most common form of a lien is a mortgage, which gives the mortgage lender a security interest in the property. If the mortgage is not paid back according to its terms, the lien-holder can exercise their rights and foreclose on the home. Liens can also be applied to property for things like non-payment of property taxes or unpaid contractor bills.

M

Maintenance Charge

Maintenance charge, also known as service charge, is the charge to a tenant or leaseholder made by a landlord to cover costs of maintaining a property. The services that you can and can’t be charged for should be set out in your lease agreement. Charges sometimes include management costs and contributions to reserves. Tenants are not required to pay for services that are not mentioned in the lease agreement.

Maisonette

A maisonette is a property that comprises a portion of a larger building, usually arranged over more than one floor with its own private entrance. This means that you can exit your home directly to the outside, rather than through a shared corridor. No private entrance, means no claim to the name but then referred as a ‘duplex’, the American title. A great way to think of maisonettes is simply a ‘house on stilts’, as they are often located over shops, garages, or other maisonettes.

Mortgage Agreement in Principle (MAP)

A mortgage in principle is also known as a Decision in Principle (DIP), Agreement in Principle (AIP) or mortgage promise. It is a written certificate or statement from a lender to day that “in principle” they would lend a certain amount to a prospective borrower(s) based on some basic information. The information that you provide, will allow the lender to check your credit file helping to establish whether you are mortgageable and if the amount will be lending which is require. In almost all cases a Decision in Principle will be undertaken by a lender prior to any application being made.

Mortgage broker

A mortgage broker is an individual or company that is responsible for taking care of all aspects of the deal between borrowers and lenders, whether that be originating the loan or placing it with a funding source such as a bank. A qualified broker is basically a financial adviser that specialises in mortgages. They work to find the right mortgage with rates to suit the buyers budget. In addition, mortgage brokers have a duty of care towards the buyer, meaning they must be able to justify any recommendations they make. 

Mortgage Deed

A mortgage deed is a legally binding agreement, using property as collateral for a loan. When someone purchase a home, they make payments on a home loan. The mortgage deed is the paperwork you sign that allows the lender to put a lien on the property until the loan is paid. When people say they make a monthly mortgage payment, they mean they make a monthly loan payment while the mortgage deed secures the property for the lender.

Mortgage Indemnity Guarantee (MIG)

Mortgage Indemnity Guarantee (MIG) is an insurance policy that protects lenders if the mortgage repayments cease for some reason, perhaps due to death or a homeowner being made redundant at work. Keep in mind that the MIG does not protect the borrower but rather reduce the lender’s losses as a result of mortgage default.

Multiple Agency

Multiple Agency is when there is a selection of two or more estate agents instructed by a seller to market a property on behalf of him/her. Only the agent who introduces a successful purchaser earns the commission. Be aware of the possibility of having to pay multiple fees as this type of arrangement will probably be the highest in cost then all the other options available.