Glossary
Here you can find the definitions of professional and technical terms used in the conveyancing process that can be confusing particularly for first time purchasers.
Advance
The mortgage loan
Bridging loan
Short-term loan enabling the borrower to bridge the gap between the purchase of a new house and the sale of the old house
Collateral
Property pledged as security against the repayment of the loan
Completion
The final legal transfer of ownership of the property
Contract
The written legal agreement between the seller and the buyer with regard to the property
Conveyancer
The solicitor or legal executive/licensed conveyancer who arranges the legal aspects of selling and buying property
Deeds
The legal documents which entitle the owner to the property
Disbursements
The fees for land registry and local searches which are payable to the conveyancer by the buyer
Equity
The difference between the value of the property and the amount of any loans secured against it
Exchange of contracts
The point where both the buyer and seller are legally bound to the transaction and risk regarding the property passes to the buyer
Freehold
Ownership of the property and land upon which it stands - not usually available for flats
Gazumping
The situation that arises when a Seller accepts a higher offer from another Buyer when he has already accepted an earlier lower offer from a different Buyer. The first Buyer is said to be gazumped and then has to decide whether to match that offer increase it, or lose the property
Gazundering
Similar to gazumping but in reverse. This arises where a Buyer waits until exchange of contracts is imminent and then dramatically reduces the offer
Home Information Pack (HIP)
Ground rent
Annual charge payable by leaseholders to the freeholder
Homebuyers Report
Surveyors report on the property - less extensive than a structural survey
Indemnity
Single payment for an insurance policy to cover the value of the property to the lenders - when they lend a high percentage of the purchase price
Land Registry Fee
A fee payable to the land registry to register the transfer of ownership of the property
Leasehold
Ownership of the property but not the land on which it stands so that when the lease expires ownership of the property reverts to the freeholder
Lessee
The person to whom the lease is granted
Lessor
The person who grants a lease
Mortgage
A loan made against the security of the property
Mortgagee
The person (or organisation - eg bank or building society) lending the mortgage advance
Mortgagor
The borrower to whose property stands as security to the mortgage loan
Principle
The amount of the loan on which interest is calculated
Purchaser
The person buying the property. Now more usually called "The Buyer"
Redemption
The final payment of a mortgage loan
Redemption Fee/Redemption Interest
The charge made by some lenders if a mortgage is ended early
Stamp Duty Land Tax
A Government tax. The amount payable changes from year to year in line with the Budget. Tax is currently payable on properties over £175,000.00 (due to revert to £125,000.00 later in 2009) assuming no change of heart by the Government in this respect) in value. There is a sliding scale applicable
Subject To Contract
Ordering of any agreement before exchange of contracts which allows either party to withdraw without incurring any penalty
Survey
Full inspection of the property by a surveyor, usually on behalf of a buyer
Term
The length of time over which a mortgage loan is to be repaid
Valuation
Inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower must pay
Vendor
The person selling the property more commonly called "The Seller" now
