How to buy: Jargon-busting

As part of our How to Buy series, we’re back jargon-busting those words and phrases that are commonly used throughout the home buying process so you can understand what everyone is talking about. If you haven’t already, take a look at the first part of this blog here.

Appraisal

This is the process to determine the value of your home, either your existing property, the one you are planning to buy, or both.

Chain

This is a number of linked property sales where exchange of contracts must take place simultaneously.

Deeds

The legal documents that assign the ownership of a property.

Deposit

The amount of money paid by the buyer to the seller on exchange of contracts in order to secure a property, also known as the Down Payment.

Equity

This is the difference between the value of a property and the amount of mortgage owed. For example, a house valued at £150,000 bought with a £100,000 mortgage has £50,000 equity.

Freehold

The absolute ownership of both a property and the land on which it stands indefinitely.

Independent Financial Advisor (IFA)

A qualified person who uses specialist knowledge of the marketplace to select financial products, like mortgages, to suit you.

Leasehold

The ownership and right to occupy a property by way of a lease agreement for a given period of time subject to an annual payment of rent to the owner of the freehold.

Types of mortgage:

Fixed rate

The interest you pay stays the same for a specified period of time, typically two to five years, regardless of interest rates in the wider market.

Variable rate

The interest you pay can change at any time, so make sure you’re prepared and have savings set aside so you’re covered if your payments do increase.

Interest only mortgage

This is where you only pay the interest on the amount you borrow. Savings or other assets are used to pay off the total amount borrowed at the end of the mortgage term, so it’s important to plan ahead.

Early repayment charge

This is a charge made by the lender if the borrower terminates a mortgage in advance of the terms of the mortgage. This is normally because the borrower has benefited from reduced payments of cash back in the early period of a mortgage.

Don’t forget our friendly Sales Teams are always on hand to answer your questions and help you through the buying process, just pop into the Sales and Marketing suite or give them a call.