Whether you've bought or sold a property before or not, there's lots of lingo to get your head around. Hopefully my explanations of these terms will help you.
The total amount – sometime referring to sum borrowed in a mortgage – sometimes the amount you have left in a property after the mortgage has been repaid.
With a capital and interest mortgage the monthly mortgage payments pay off both the initial loan (i.e. cost of the property) and any interest that has been charged. Therefore at the end of the loan term, the entire debt will be repaid with nothing outstanding. (also know as a repayment mortgage).
This is to do with the regularity with which the Lender calculates the outstanding balance on any give mortgage and hence the size of the monthly repayments. This figure is normally calculated annually, monthly or daily.
This is a rate of interest that you agree to with your lender that will be the maximum you will pay during a set period of time. This is period of time is often the first 1-3 years of the mortgage starting, but it can be for longer. The interest rate cannot go any higher than this capped rate during this specified period of time.
See Cash Back on completion.
This is where you get a lump of cash from the mortgage lender on the completion of a sale.
This is the same as Return on investment.
These are entries that are on a land register to protect the interest of a third part.
This occurs when the seller needs the sale of their house to occur before they can complete the purchase of another property. The same situation may exist for others in the chain. As a result, the whole chain can collapse if one link breaks.
This is simply when a potential buyer does not need to sell a property in order to buy a new one hence they are “chain free”. First time buyers are often chain free.
The term attached to a property by the lender to give security against the asset. It means that they have a right to the property value should it come to a sale.
This is a certificate issued to the lender by the Land Registry that gives evidence of the lender’s charge over the property.
This is a payment made on freehold land to the original freeholder forever. This differs from ground rent because ground rent normally has a limited period.
The property is what is classed as collateral. It is seen as a guarantee that you will be able to pay the lender the loan. If you aren’t able to repay this loan the property could be sold by the lender in order to recoup the money they originally lent you.
This is when you have let your property to a specific bona fide company.
