THE LANGUAGE OF HOME BUYING

Completion

The finalising of the sale when all the monies are passed over and the buyer has legal right to the property.

Contract

Entered into by the seller and buyer of a property. This only becomes binding on exchange, i.e. when both parties have signed the contract and the purchaser has handed over the agreed deposit to the solicitor.

Conveyance

The legal transfer of a property from one owner to another.

Covenant

A restriction or condition affecting the property, which must be complied with.

Deeds

All the legal documents relating to the property.

Deposit

A part payment of the agreed purchase price by the buyer on exchange of contracts.

Disposition

A legal document which transfers ownership of a property to the buyer.

Freehold

The full ownership of both the property and the land on which it stands.

Ground Rent

This applies to leasehold proprieties and is a sum paid annually to the freehold by the leasehold.

Home Information Pack

In the future the sellers of properties in England and Wales will need to create a Home Information Pack (HIP) before the property can be marketed. The pack is a set of documents about the property: an Energy performance Certificate, local authority searches, title documents, guarantees, etc. this new legal requirement has now been phased in over a period of time.

Insurance

This is usually discussed with the mortgage advisor or lender when making mortgage arrangements. You will need:

Contents insurance: to work out how much cover you need for a household contents insurance policy, you need to add up the value of all the possessions in your home.

It is recommended that any items of particular value – jewellery for example – are specified and covered by an “all Risk” policy, which applies even when the items are not in the home.

Building Insurance: cover the bricks and mortar of your home. It is advisable to review insurance cover regularly (Normally included in the management service charge of a leasehold property).

Land Certificate

A Certificate issued by the land Registry as proof of ownership.

Land Registry Fees

These are paid through your solicitor to register your ownership of the property with the Land Registry. The scale of fees is fixed by the government.

Leasehold

Land held under a lease for a number of years, on which ground rent is paid.

Local Authority Search

Carried out by your solicitor, this establishes if your new home is likely to be affected by any planning decisions.

Management Company

Apartment buildings usually have a management company responsible for maintaining the main structure, common parts (E.g. stairs and hallways) and landscaped areas. On some developments a management company may also maintain roads, street lighting and open spaces. The management company recovers its costs from each owner through a service charge.

Mortgage.

Most people will need to take out a mortgage – or loan – to buy a house. There are many different types of mortgages available to home buyers – your mortgage advisor will explain.

Mortgagee.

The Lender

Mortgagor.

The Borrower (whose property is secured for the loan).

Mortgage Indemnity insurance / Guarantee.

Your mortgage lender will usually require additional security if the loan is in excess of 70% or 80% of the purchase price. This involves a once-only payment which can normally be added to your mortgage. The amount of the payment varies with the amount borrowed and the term of the loan.

Mortgage Protection Policy.

An insurance policy often arranged in conjunction with a repayment mortgage, which is taken out to ensure that the loan will be paid off should the borrower die before the end of the mortgage term. Insurance may also be available to protect your payments in the event of redundancy.

Mortgage Valuation Survey.

Prior to making a mortgage offer your lender will have the property valued for “mortgage purposes” you will pay a fee (variable on the purchase price of the property).

National House Building Council.

A non-profit making body whose role is to both protect the home buyer and help the industry to construct good quality new homes. NHBC inspectors carry out spot checks and regular examinations on all properties at varying stages of construction. The NHBC also provides a 10 Year Build mark warranty.

Registered Land

Land (including buildings on it) the title to which is registered at the land registry and legal ownership of which is guaranteed