Property terms and acronyms that you’re not familiar with! Buying a property is a huge achievement...

Buying a property is a huge achievement and a very exciting time, but we’ll be honest with you - it can have stressful and confusing moments.

You’ll likely hear lots of new terms and acronyms you’re unfamiliar with, and it can be easy to lose track of what it all means. It might sound a little daunting, but worry not! We’ve compiled this list of common phrases you might encounter while navigating the home-buying process. 

Buy-to-let mortgage (BTL)...

You might see this term pop up when you’re looking at properties and at what your different mortgage options are. Buy-to-let mortgages are specifically for people who buy a property solely for renting it out (an investment) rather than living in it themselves.

Chain-free property... A chain-free property is one where the seller isn’t reliant on buying a new property to sell their current one. If you are a chain-free buyer (for example, a first-time buyer), you may be more attractive to sellers as your purchase of their home doesn’t rely on you selling yours, meaning the sale is less likely to fall through. In reality, most houses on the market are not chain-free, meaning the sale relies on another property being sold simultaneously.

Completion...

This word will be music to your ears! Completion is the exciting moment you’ve completed the process, and the property is yours!

Deeds...

Deeds are legal documents that state the ownership and boundaries of the property and land.

Deposit...

A deposit is a sum of money you put down towards your property, usually between 10 - 20% of the property’s price. Your mortgage lender will loan you the remaining balance.

Exchange of contracts...

Exchanging contracts is one of the final stages of the home-buying process. It’s the point where both the buyer and seller have signed and exchanged contracts, and the sale becomes legally binding.

Freehold...

Freehold means that you own both the property and the land it is built on, meaning you will be responsible for maintaining both.

Ground rent...

You might have to pay ground rent to the freehold owner if you buy a leasehold property. Since the land on a leasehold property is owned by someone else, you’ll be paying rent on the ground that your property is on (if detailed in the lease agreement).

Joint mortgage...

A joint mortgage is where there are two or more people on the mortgage agreement, for example, if you are buying a property with someone else. In this scenario, you can usually borrow more as mortgage lenders use your combined income to calculate your affordability. Everyone named on the mortgage then becomes responsible for making the repayments.

Leasehold...

A leasehold means that you own the property but not the land that it is built on - the land is owned by the freeholder. You will then own the property on that land for a set period (this will depend on the length of the lease). Once the lease has expired, the ownership technically passes back to the freeholder, but the lease can be extended.

Mortgage...

A mortgage is a loan that you take out to buy a property, which is secured against the value of the home until it’s paid off. A typical mortgage term is 25 years, but it does vary depending on what mortgage you take out. Since it is a loan, if you can’t keep up the repayments, the mortgage lender can repossess your home.

Offers over...

This usually means the seller hopes to sell their property for a price higher than the market property value.

Stamp Duty...

Stamp Duty is the tax that buyers usually have to pay when purchasing a residential property over a specific price in England and Northern Ireland. There are many different rate bands for Stamp Duty, and the amount you will pay depends on a few factors. See our post here https://m.facebook.com/story.php?story_fbid=164274086259306&id=110293208324061

Under offer...

This means that a seller has accepted an offer on their property - at this point, the exchange of contracts has not yet taken place, so the offer isn’t technically set in stone.

Guarantor... A guarantor is someone, usually a family member or friend, who helps another person borrow money or get credit (for a loan or mortgage). They 'guarantee' they will cover the repayments if the other person can't.

Equity loan...

In-home buying terms are where you receive funds towards your purchase (from a bank, private investor, friend or family member) in return for a share (equity) of the property. You’ll then repay this loan according to the terms you’ve agreed with whoever has lent the money.

Service charge... Mainly found on flats and new builds situated on a development of properties, a service charge is a monthly cost that covers the upkeep of an area and any communal benefits of that area (e.g. management company fees, cleaning and gardening of communal areas, concierge services etc.)

Shared ownership...

An alternative to standard mortgages, shared ownership makes it more affordable for some people to get on the ladder by allowing them to purchase a smaller share of the property (usually 25-75%) and then pay rent on the remaining amount.

Surveys... An essential part of the home buying process, surveys are carried out to inspect several things, such as the property’s physical condition, energy efficiency, and actual value. These are necessary for identifying potential issues and are typically recommended and arranged by your solicitor or mortgage lender.

Buying a home can be quite a rollercoaster, and with Our Agents you’re not alone! 

We have lots of help and information to help lighten the load. If you are buying, selling or thinking of selling your home or just want some friendly advice, call us on 01670 613203.