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REAL ESTATE Vocabulary - GLOSSARY

REAL ESTATE Vocabulary - GLOSSARY

You will hear a lot of “property “speak. The following may be a useful glossary to understand the alien you will encounter while hunting your dream home:

Advance: The amount of your mortgage

Annuity Mortgage: A mortgage where the interest and part of the loan is repaid each month

APR: An abbreviation for Annual Percentage Rate: The total finance charge (interest, loan fees, etc.) expressed as a percentage of the loan amount.

Building Insurance: insurance to cover structure, fixtures and fittings of a property.

Capital: The amount of money borrowed to buy a home.

Collateral: Title deeds of your property or properties given as security against the repayment of the mortgage.

Completion / Closing: The final legal transfer of the property, where the outstanding balance is paid to the seller and the buyer receives the keys of the property.

Contract: The written legal agreement between the seller and the buyer binding both parties to the sale of the property.

Contents Insurance: Insurance to cover any loss or damage to possessions within a property.

Conveyancing: The legal work involved between the seller and the buyer.

Deeds / Title Deeds: Legal documents signifying the owner’s legal entitlement to the property.

Deposit: The amount of money the buyer must pay when the contracts are exchanged. (Usually 10% of the agreed property price)

Disbursements: Expenses paid out by the Solicitor on behalf of the Purchaser (e.g. Postage / Couriers)

Endowment Mortgage: A mortgage where you take out an assurance policy that replays the mortgage either on death or at some other fixed time in the future. In the meantime only the interest portion of the mortgage is paid off. Nothing is paid off the principal until the policy matures.

Equity: The difference between the value of the property and the amount of any loans secured against it.

Exchange of Contracts: Where the buyer and seller are legally bound to the transaction of the property.

Freehold: Unqualified ownership of property and the land it stands on.

Ground Rent: Annual rent paid on a leasehold property.

Guarantor: A person who agrees to guarantee a loan, i.e. they promise to be responsible for the mortgage payments if the borrower fails to pay them.

Home Bond Guarantee & Premier Guarantee Schemes: A guarantee scheme protecting new houses and apartments against structural defects, and to ensure property standards are maintained in the building industry.

Indemnity Bond: An insurance bond taken out by a mortgage provider as additional security where the loan and the property valuation is similar.

Land Registry: The State Body where the Solicitor registers the title deeds of the property i.e. registers the buyer as the new owner of the property.

Mortgage Protection Policy: An insurance policy which pays out the balance due on a mortgage on the death of the policy holder.

Leasehold: Leasehold gives a person the right of the possession, but not the ownership, of a property for an agreed period of time. Ownership remains with the freeholder, but the lessee must pay ground rent annually and is subject to the terms of the lease. Only under certain lease agreements the lessee has a right to acquire the freehold.

Premium: The amount of money the borrower must pay to the insurer regularly for an insurance policy.

Principal: The original amount of the loan i.e. the amount borrowed without any interest included on it.

Search Fees: This is the fee a solicitor charges when they carry out ‘searches’ to ensure that the person selling the property has a legal right to sell it and that there is no other interest shown on the title.

Valuation: An estimate of the property’s value.

Article Source: Real EstateTips from top notch experts

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