Copy of `Edwards and Associates - Homebuying terms`

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Edwards and Associates - Homebuying terms Category: Legal > Buying a house Date & country: 26/03/2011, UK Words: 42

advance
The total amount of loan provided by the lender.

annual interest
A method of interest calculation where the level of interest is set by the lender at the start of the year, for the whole year. Less efficient than Daily interest.

arrangement fee
A charge by a lender to arrange a specific type of product.

asu
Accident, Sickness and Unemployment insurance.

best advice
The requirement under the Financial Services Act 1986 to ensure the products and services recommended are suitable for your needs.

booking fee
A charge by a lender to reserve mortgage funds on a particular type of product.

capital
The amount of loan.

completion date
The day on which a buyer is legally liable to complete a purchase and the owner (vendor) is legally liable to sell.

contract
Written legal agreement drawn up by the vendors solicitor between both purchaser and vendor, setting the price terms and date for the property to complete.

covenant
A condition on the property deeds. Covenenents can be positive (example, you must keep a shared access clear), or a negative covenant (example, you are not permitted to allow hedges to grow above a certain height).

credit reference agencies
Organisations licensed under the the Consumer Credit Act 1974, which hold information about individuals regarding their residential movements, status and financial credit transactions. Lenders may give information to as well as seek information from these organisations.

credit score
A computer based underwriting system used by lenders to assess a borrowers credit worthiness, potential ability to pay and overall risk of the borrower to the lender. Credit Scoring systems use historic information as well as a borrower

daily interest
A method of interest calculation where the lender calculates the level of interest charged daily, based on the amount owed on that day.

deposit
The difference between the net mortgage advance and the purchase price.

equity
The amount of money held in a property, being the value of the property less any money owed on mortgages on it.

exchange of contracts
The point at which a purchaser is legally obliged to buy at the price and the vendor is legally obliged to sell to the purchaser. A deposit is generally paid and a future completion date is fixed.

freehold
Where both the land and the property are both owned by the purchaser.

gazumping
Where a seller accepts a buyers bid and subsequently accepts a higher bid from from an alternative buyer before exchange of contracts.

guarantor
A person who provides a guarantee to a lender that the person borrowing the money on a mortgage will meet their commitment. In the event that the borrower defaults it is ultimately the responsibility of the guarantor to meet the mortgage payments. Generally lenders do not like this arrangement.

interest rate
The charge set by a lender to borrow money.

joint tenants
An agreement between joint borrowers where in the event of death, the surviving owner takes ownership of the others share.

land registry
The government organisation that controls registration of ownership, boundaries, rights of way etc for all property in England and Wales.

leasehold
The land on which a property stands is not owned by you, but by a landlord, with an agreement for you to use this land for an agreed period. Leases are commonly 100 years and most leasehold properties are flats and maisonettes.

loan to value
The loan required expressed as a percentage of the purchase price.

mortgage deed
The formal agreement signed between mortgagee and mortgagor.

mortgagee
The lender.

mortgagor
The borrower.

multiple agency
Where an owner instructs various estate agents to market their property.

net advance
The gross amount of mortgage less any fees, charges or retentions.

redemption
Full repayment of a loan.

redemption penalty
A charge made by the lender for repaying your loan early.

retention
An amount of money withheld from the mortgage advance until certain work has been carried out to the property. Generally this has been identified as a result of the survey. Alternatively a lender could impose a retention pending other requirements contained as conditions within the mortgage offer.

settlement (scotland only)
The final legal transfer of ownership of property.

sole agency
Where the owner of a property gives exclusive selling/ marketing rights to an Estate Agent for a given period. The fee charged by an Agent for Sole Agency is generally significantly less than for Multiple agency agreements.

stamp duty
A Government tax on your purchase based on the purchase price.

subject to contract
The agreement of a buyer to purchase a property, subject to certain conditions and satisfactory title being provided by the seller.

tenants in common
An agreement between purchaser where in the event of either death the value of that person

term
The period over which the loan is repaid.

title deeds
Documents showing ownership of a property.

transfer deed
Document which formally transfers ownership from the seller to the buyer.

valuation
An assessment of the property offered as security by the lender, to ensure the property is of merchantable quality and the purchase is price/ value is accurate. Also see Types of survey available for other options.

vendor
The seller of the property.