A STRAIGHT FORWARD GUIDE TO BANKING AND LEGAL TERMS
Banking and legal terms can be very confusing, especially for first time buyers. Please find below Phoenix Financial Services straight forward guide banking and legal terms which is will explain what each of the terms mean.
Advance: The amount of your mortgage.
Annuity Mortgage: A Mortgage where you repay interest and part of the loan each month.
APR: An Abbreviation for Annual Percentage Rate. An APR (Annual Percentage Rate is an interest rate calculation designed to reflect the total cost of the credit over the whole term of your mortgage.
Collateral: the title deeds of your new property given as security against you repaying the mortgage.
Completion: the final legal transfer of the property, where you pay the rest of what you owe to the seller and you receive the keys of the property.
Contract: the written legal agreement between you and the seller for the property.
Conveyancing: the legal work involved between you (the buyer) and the seller.
Deeds: legal documents showing who owns the legal entitlement to the property.
Deposit: the amount of money you must pay when the contracts are exchanged.
Equity: the difference between the value of the property and the amount of any loans secured against it.
Exchange of Contracts: when both you, the buyer, and the seller is legally bound to the transaction.
Freehold: owning the property and the land it stands on.
Ground rent: annual rent (usually low) you pay each year on a leasehold property.
Land Registry fee: a fee you pay to register your ownership of the property.
Leasehold: a form of property ownership, where the property is leased by the owner to a leaseholder or tenant for a fixed number of years.
Lessee: the person to whom a lease is granted.
Lessor: the person who grants a lease.
Mortgage: a loan made using property as security.
Mortgagee: a bank, building society or other lender who lends the money for the mortgage.
Mortgagor: the person who borrows money and who uses the property as security for the loan.
Mortgage protection: life assurance cover designed to pay off what you have borrowed if you die.
Negative equity: the value of the property is less than the total loan amount.
Principal: the amount of the mortgage on which we work out interest.
Redemption: paying off the mortgage loan in full.
Search: a legal investigation to see if there are any legal rights over a property and to see if it is affected by planning applications and so on.
Stamp duty: a government tax.
Subject to contract: this happens when the sale of the property has been provisionally agreed. It allows you or the seller to withdraw without paying any penalty.
Structural survey: a detailed inspection of a property to check that it is structurally sound.
Term: the period of time (years) over which you repay a mortgage.
Title: who owns the property.
Transfer: a deed which transfers ownership of a property.
Valuation: an inspection of a property to decide its market value.
Vendor: the person selling the property.