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This jargon buster will help you understand most of the technical speak!
To help you understand some of the legal and mortgage jargon we have produced a guide to some of the terms used. These are not legal definitions but descriptions in plain every day language.
APR
Abbreviation for "Annual Percentage Rate". Where an APR is used it will be based on the overall cost of the bad credit mortgage, self cert mortgage, adverse credit mortgage or right to buy mortgage for comparison against other bad credit mortgage, self cert mortgage, adverse credit mortgage or right to buy mortgages.
Assignment
A legal transfer of rights or benefits e.g. in your bad credit mortgage, self cert mortgage, adverse credit mortgage or right to buy mortgage, a lease or insurance policy.
Buildings Insurance
This covers the actual building that you live in against such thing as damage by storm, fire, flood, subsidence and so on. The amount of cover must be sufficient to completely rebuild your property. With all bad credit mortgage, self cert mortgage, adverse credit mortgage or right to buy mortgage lenders this insurance is compulsory but you can arrange cover yourself providing it meets the lenders approval.
Contents Insurance
This covers your personal belongings and furnishings etc. Cover can be extended to include other liabilities.
Certificate of Title
The document prepared by the solicitor (in England and Wales) for the lender Confirming all formalities is satisfactory prior to completion.
Completion
The formal completion of the mortgage transaction when the bad credit mortgage, self cert mortgage, adverse credit mortgage or right to buy mortgage monies are handed over to the seller of the property and legal formalities are concluded.
Contract
A legal agreement between the seller and the purchaser of a property setting out the terms on which the sale is to be made.
Conveyance
The act of transferring the property from the local authority to the next owner.
Disbursements
These are the bills your solicitor has to pay out on your behalf to conclude the mortgage transaction. Such amounts are over and above the solicitor's legal fees.
Feuhold
The Scottish term for absolute ownership in land, in other words the land that your property stands on is yours.
Freehold
The right of absolute ownership in land, in other words the land that your property stands on is yours.
Ground Rent
An annual sum paid as a rental for the ground on which the property stands.
Land Registry Fee
A fee paid to H.M. Government to keep a register of the ownership of property and land. They also keep a record of other charges.
Lease
A contract detailing the rights and obligations between a Landlord and a right to buy Tenant.
Leasehold
A right to exclusive possession of land for a fixed term of years, in the case where someone else actually owns the land.
Local Authority Search
This search reveals to the solicitor such detail that may affect the right to buy property such as, road and planning proposals, road maintenance responsibilities and rights of way or footpaths that are on or near to the right to buy property.
Local Search Indemnity Insurance
An insurance policy obtained by the solicitor or lender as an alternative to the Local Authority Search. This is generally used when completion of the purchase of the property is regarded as urgent.
Mortgage
The loan that is secured on your property.
Purchase Price
The amount that is agreed between the buyer and the seller to be paid for the property. In the case of right to buy this is shown on the offer of sale or the section 125 agreement.
Right To Buy
The act of Parliament (The Housing Act 1980) that allows a tenant paying rent to purchase their home from the Local Authority or Housing Association under the right to buy scheme.
Title Insurance
This policy covers local authority searches and also means that a Deed of Postponement is not required from the local authority. The use of this policy will speed up completion especially where cash back is being provided by the right to buy lender for home improvements.
Solicitor
The people who will take care of all the legal formalities on your behalf and provide independent advice about the aspect of the right to buy.
Special Conditions
These are conditions that apply specifically to your purchase or mortgage and are contained in your offer from the local authority or mortgage offer.
Stamp Duty
In simple terms this is government tax on the purchase of property. Most right to buy purchases fall below the level where duty becomes payable.
Standard Conditions
These are the general conditions that form part of the terms on which your right to buy or mortgage is issued.
Tenure
The type of ownership of a property e.g. Freehold, Leasehold or Feuhold.
Title
The right of ownership of property or land.
Title Deeds
The documents that prove the ownership of the property. These may be in the form of Conveyances and / or extracts of the records held at H.M. Land Registry.
Transfer
The document (Deed) that transfers the land or property.
Undertaking
A promise to complete a certain task.
The above guide has been produced by uk mortgage broker/ bad credit mortgage broker Apple Mortgages Limited to give prospective clients a better understanding of the jargon that sometimes surrounds the mortgage industry.
This should help clients whether they are experienced property buyers looking for a bad credit mortgage, an adverse credit mortgage, a self cert mortgage, a commercial mortgage, a right to buy mortgage. or even first time buyers seeking a 100% mortgage facility.
To apply for a mortgage, speak with an adviser on 0800 083 7747 or apply on line.