Here is a glossary of the phrases and terms often found within the home buying process. If you can not find what you are looking for email us and we will endeavour to respond with the answer.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Advance - The mortgage loan. Adverse Credit - When someone has had previous financial difficulties that have shown up on their credit file.

AIP - Agreement in principle. This is offered by some lenders, so a client knows that providing the information they have given is correct and can be verified, then subject to the property being suitable security they can obtain a mortgage.

Annual Percentage Rate (APR) -The total charge for the loan including fees and interest expressed as a percentage. This is for the term of the mortgage.

Applied or Nominal Interest Rate - The rate used to calculate the interest due on the mortgage account.

AST or Assured shorthold tenancy agreement - This is a contract between a landlord and the tenants and is typically 6 or 12-mths long. This is the type of agreement needed for buy-to-let lenders.

ASU or Accident, Sickness & Unemployment cover - An insurance policy which pays your monthly mortgage payments, usually for a specified period, if you lose your income through sickness, injury or unemployment.

Bank base rate - This generally refers to the Bank of England base rate. Some mortgage schemes are linked to this base rate so when the rates move up or down the scheme rate follows. This type of scheme is often referred to as a tracker mortgage.

Buy-to-Let - Where a residential property is purchased with the intention of letting it out to tenants. Capital - The amount of money that you owe, excluding costs and interest outstanding.

CAT mortgage - Charges - Access - Terms. A CAT mortgage must have a rate that does not go over 2% above the Bank of England base rate. Did you know - a broker can not charge you a fee to arrange this mortgage?

CCJ - This is a county court judgement. It is issued against someone who owes money and has not repaid it as per an agreement.

Collateral/security - The property, which the lender takes first charge over and can sell to repay the loan if the borrower does not keep up the mortgage payments.

Completion - Has two meanings: 1, The final legal transfer of ownership of the property to you and the property becomes yours. 2, The start of the mortgage.

Contract - The written agreement between the seller and the buyer to transfer ownership of the property.

Contract race - The seller has received two or more offers on the property and will sell to whoever is ready to exchange contracts first.

Conveyancer - Solicitor or licensed conveyancer who deals with the legal aspects of buying or selling land. Most lenders insist on the firm having at least two partners.

Conveyancing - The term used for the legal work involved in the sale and purchase of land.

Credit File - This is information held about people and how they have conducted their financial affairs over a 6-yr period.

Deposit - Are normally paid at the exchange of contracts by the buyers to make up the difference between the mortgage amount and the purchase price.

Default - This is a when someone misses some payments on a credit arrangement. The creditor will issue a default notice and that usually appears on the debtors credit file.

Drawdown date - The date when the mortgage loan is paid to the borrower.

Early repayment charge - A charge payable on certain types of mortgage if it is redeemed or partly redeemed within the early repayment charge period. The amounts charged by the lender are normally disclosed on the mortgage quotation and within the mortgage offer letter.

Early repayment charge period (ERP) - A period of time that applies to certain types of loan, during which a charge will be made if the loan is repaid in full or in part or its terms are varied at the borrower's request. The amounts charged by the lender are normally disclosed on the mortgage quotation and within the mortgage offer letter.

Equity - The difference between the value of the property, against the amount of loan secured against it.

Essential repairs - Work that needs to be carried out on the property before the mortgage completes.

Exchange of contracts - The point when both buyer and seller are legally bound to the transaction and at which point the buyer should insure the property.

Endowment mortgage - Sometimes used to describe an interest only mortgage supported by an endowment policy.

Endowment policy - A combined life assurance and investment policy often taken out at the start of a mortgage to run for the same term. Premiums are paid to a life assurance company, usually monthly. The company invests the premiums and the investment should provide a lump sum at the end of the policy term (which can be used to repay the mortgage) or earlier if the borrower should die.

Freehold - Outright ownership of the property and the land on which it stands. Further advance - An additional loan by the lender to the borrower usually secured by an existing mortgage deed.

Gazumping - When the seller, having already accepted an offer but before contracts are exchanged, accepts another, higher offer from someone else.

Gazundering - When the buyer, having already had an offer accepted, but before contracts are exchanged, reduces his/her offer for no reason and then threatens to walk away. This may mean the seller putting the property back on the market and possibly losing their new house, thus creating pressure to accept the new lower offer. Both gazumping and gazundering ruin lives, don't do it.

Gifted Deposit - This is where the deposit has been given by someone such as family or builders and there is no obligation to repay the amount.

Ground rent - An annual charge payable by leaseholders to the freeholder.

Guarantor - A person who promises to pay the borrower's debt, usually if the borrower fails to.

Home-buyer's report - A surveyor's report on a property which is less extensive than a structural survey and is paid for by the purchaser.

Interest only mortgage - A mortgage where the capital is repaid at the end of the term, usually from the proceeds of an investment plan such as an endowment policy or an ISA. The borrower pays just the interest on the mortgage and the balance (amount owed) remains the same.

Interim interest - Any payment due for the period from the day the mortgage began up to the first payment date. Mortgage payments are usually paid monthly.

ISA (Individual Savings Account) - A means of investing in the stock market via unit trusts. Profits are not subject to capital gains tax. Sometimes used instead of an endowment policy as an investment to provide funds to repay an interest only mortgage.

Land Registry certificate - Provides details of the property including a plan and, if the property is leasehold, a copy of the lease.

Land Registry fee - A fee paid to the Land Registry to register ownership of a property.

Leasehold - The right to possession, but not ownership, of a property for an agreed period of time. Ultimate ownership remains with the freeholder.

Let-to-Buy - Where an existing property is retained and let out to tenants and a new let-to-buy mortgage is arranged on the new property to be used as a main residence.

Lessee - The person to whom a lease is granted - the tenant.

Lessor - The person who grants a lease - the landlord. Life assurance - An insurance policy that pays a lump sum on death. Often taken out with a mortgage to provide money for the loan to be repaid if the borrower dies during the term.

Local authority search - Questions to the local authority regarding plans for new road building, planning permission for any building work previously carried out, connection to the mains sewer, etc. This is required by the lender and requested by the solicitor.

LTV or Loan to Value - This is the amount of mortgage represented as a percentage of the property value. A mortgage of £60,000 on an £80,000 property would mean 75% LTV.

MIG or Mortgage Indemnity Guarantee - A payment to a lender for an insurance policy for the lender's benefit when they lend above a certain percentage of the property value. The higher the percentage of the property value you borrow, the more expensive this one-off premium is. The policy covers the risk of selling a repossessed property at a loss. (Also sometimes called a higher lending fee.) Most, but not all, lenders charge MIG when you borrow more than 90% of the property value or purchase price. On a 100% mortgage borrowing £80,000 a typical MIG premium will cost you £2,400.

Mortgage - Has a specific meaning in law but has come to mean a loan with property as security.

Mortgage Code - This is a voluntary code followed by lenders and mortgage intermediaries. It sets out minimum standards of practice followed by those who subscribe to it. Mortgagee - The lender.

Mortgagor - The borrower.

Mortgage term - The period over which the mortgage loan is to be repaid.

MPPI / ASU / Mortgage Payment Protection Insurance - An insurance policy which pays your monthly mortgage payments, usually for a specified period, if you lose your income through sickness, injury or unemployment.

Negative Equity - This is where the property is worth less than the outstanding mortgage secured against it.

NHBC guarantee - A 10-year guarantee provided by the National House Building Council, that the builder will put right serious defects on a newly-built property.

Offer - This has two meanings 1, When a buyer states a price that he/she is prepared to pay for a property. 2, When a lender puts in writing that they are prepared to give a mortgage and under what terms and conditions.

Pension Plan - An investment plan which can provide a tax-free lump sum on and an income after retirement. A pension plan is sometimes used as a way of providing a lump sum to repay the capital of an interest only mortgage.

Portability - The ability to move your existing mortgage onto a new property without penalty, providing the new property is suitable security to the lender.

Principal - The amount of the loan on which interest is calculated.

Remortgage - Repaying one mortgage by taking out another secured on the same property, possibly to take advantage of a particular mortgage product or better interest rate.

Repayment - When a mortgage is repaid.

Repayment mortgage - A mortgage where the capital borrowed is gradually repaid over the agreed term.

Retention - This is where a lender withholds part of the mortgage until requested repairs are carried out.

Sealing fee - A charge made by the lender to cover administration costs when a mortgage is redeemed.

Self Certification - Is where a lender will allow you to put your income down on the application form, however, they will not verify it leaving the onus on the client to make sure they do not over commit themselves.

Specialist report - A report recommended by a surveyor or valuer into particular defects discovered at the property to be purchased, such as dry or wet rot, damp, etc.

Stamp duty - A government tax of 1% of the full purchase price of a property costing between £60,000 and £250,000; 2.5% on those costing £250,001 to £500,000; and 3.5% where the price is £500,001 or more.

Structural survey - A full inspection of the property by a surveyor on behalf of and paid for by the buyer.

Subject to contract - The phrase used before exchange of contracts which allows either party to withdraw without incurring a penalty.

Surveyor/valuer - The person qualified by the Royal Institution of Chartered Surveyors or the Incorporated Society of the Valuers and Auctioneers to carry out valuations and surveys of properties.

Title deeds/title documents - The legal documents which provide proof of ownership of a property.

Transfer deed - A form which provides details of the transfer of ownership to be entered on the Land Registry register.

Unsecured - This is the term given to a loan where the lender has no security. A mortgage is normally secured against the property.

Valuation - An inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower may have to pay.

Vendor(s) - Is the person(s) selling the property.