LTVs, EPCs and APRs.. Language in the world of property can often be confusing to say the least. That’s why we’ve created this jargon buster - your go-to source for PTE (property to English) translation:
Annual percentage rate. The final cost of a mortgage, including the interest and fees.
A set-up fee the lender charges for arranging your mortgage.
You have missed one or more of your mortgage repayments payments.
An interest set by the Bank of England, which lenders’ standard variable rates usually follow.
A type of mortgage set-up fee.
The amount you borrow in order to buy a property.
The interest rate charged by a lender for a mortgage will never exceed the upper 'capped' limit.
Money that your lender gives you on completion of your purchase (often used for redecoration etc). You should factor this amount into the total cost of your mortgage to decide whether it’s a good deal.
If your mortgage deal has a collar, your interest rate will not fall any lower than the specified amount.
The necessary legal process of buying and selling a property. Carried out by either a solicitor or specialist licensed conveyancer.
When a property seller buys a new home at the same time as they sell, and the person they’re buying from is also buying another property..
This is the date when you exchange final contracts, pay all money due and are officially the new owner of a property.
Conditions of sale:
The terms agreed by both the buyer and seller for a sale/purchase of a property to take place.
The amount you are required to pay up-front towards the cost of the property.
Other expenses paid by the lawyer or conveyancer on the buyer’s behalf. This includes costs associated with local searches, Stamp Duty and Land Registry fees.
Early repayment charges (ERCs):
Penalty fees charged if you wish to leave your mortgage during a specified period, usually the period of the initial deal. They can be charged at around 1-3% of the amount of the loan you have left to pay off.
The difference between the value of your home and the mortgage you still owe; the amount of money you would have left after deducting the outstanding amount on your mortgage from the value of your property.
Equity release scheme:
This allows older homeowners (usually between 55-65) to release the money that they have tied up in their property.
EPC (Energy Performance Certificate):
A legal document that shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills.
Exchange of contracts:
The exchange of contracts from buyer and seller through their lawyers. A contract is a legally binding agreement and means both parties are committed to the transaction.
The mortgage interest rate remains the same for the initial period of the deal (usually 2-5 years).
A deal that allows you to underpay, overpay or take a 'payment holiday' from your mortgage repayments. These mortgages are usually more expensive.
You own the property and the land it stands on.
When the seller takes a higher offer from another buyer after your offer has been accepted.
This is paid to the seller’s solicitor when contracts are exchanged to show that the buyer is serious about purchasing the property. This deposit is usually between £500 and £1000 or a percentage of the purchase price, however not all buyers request this.
Insurance taken out by conveyancing companies to cover losses to clients (such as errors or fraud).
Land Registry fees:
Fees paid to register the ownership of property with the Land Registry.
You have the right to live in it and occupy the land that the property is on for a fixed period of time.
Open house or open viewing:
A relaxed type of property viewing, when people can view a property alongside other viewers between certain times of a specific day.
A type of variable-rate mortgage. This is a lender's 'default' rate, without any limited-term deals or discounts attached.
Share of freehold:
When the freehold of the property is owned by a limited company and the shareholders are the owners of the property. This is most commonly the case with owners of flats within a building.
A tax on every home sale for properties costing more than £125,000. This fee starts at 1% and can rise to 7%.
A professional check of the structure for any faults. If any problems are uncovered, then this is an opportunity for the buyer to negotiate on price in order to carry out any necessary structural work.
Subject to contract:
A property sale is not legally binding until contracts are exchanged and the details of the contract have been agreed.
The ownership documentation which holds a description of the property and land you own, as well as any rights and conditions attached to it.
The final and legally binding contract that transfers the property and its rights from the seller to the buyer.
A survey carried out by the lender’s surveyor for mortgage purposes in order to verify the property is worth the purchase price.