- Agreement in Principle (AIP): Also known as a mortgage in principle or decision in principle, this is a document from a lender indicating how much they may be willing to lend you based on a preliminary assessment of your financial situation.
- Appraisal: An evaluation of the property’s value conducted by a qualified surveyor to determine its market worth.
- Chain: A chain in property buying refers to a series of linked property transactions, where the sale of one property is dependent on the purchase of another.
- Completion: The final stage of the property buying process when ownership of the property is transferred to the buyer, and all legal and financial aspects are finalised.
- Conveyancing: The legal process of transferring property ownership from the seller to the buyer, carried out by a solicitor or conveyancer.
- Deposit: A lump sum of money paid by the buyer. This is usually a percentage of the property’s purchase price.
- Equity: The difference between the property’s value and the amount of mortgage debt remaining. It represents the homeowner’s ownership stake in the property.
- Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant for a specified period, typically two, three, five, or ten years.
- Freehold: Ownership of both the property and the land it stands on. The homeowner has full control over the property.
- Gazumping: When a seller accepts an offer from one buyer but then accepts a higher offer from another buyer before the sale is completed.
- Homebuyer’s Report: A survey conducted by a surveyor to provide a detailed assessment of the property’s condition, highlighting any issues that may need attention.
- Leasehold: Ownership of a property for a specified number of years, often in a multi-unit building. The land on which the property stands remains with the freeholder.
- Mortgage Broker: A financial intermediary who helps buyers find the most suitable mortgage product from various lenders.
- Negative Equity: When the outstanding mortgage balance on a property is higher than its current market value.
- Stamp Duty: A tax paid by the buyer on properties above a certain price threshold. The amount varies depending on the property’s value and the buyer’s circumstances.
- Survey: An inspection of the property to assess its condition and identify any potential issues. Different levels of surveys are available, including a basic valuation, homebuyer’s report, and full structural survey.
- Title Deeds: Legal documents that prove ownership of a property, including information about its boundaries and any restrictions on its use.
- Valuation: An assessment of a property’s value conducted by a lender to determine how much they are willing to lend.
- Vendor: The person or entity selling the property.
We hope this helps any of you first-time buyers navigate the complex terminology associated with purchasing a property. It’s essential to understand these terms to make informed decisions throughout the home-buying process.