11 Mortgage Words You Should Learn When Buying a House

Arranging your mortgage and buying a new build property is an exciting time. However, the jargon that is used throughout the process can be confusing. We’ve put together a jargon buster to help you along the way during your house buying process.

Your property may be repossessed if you do not keep up repayments on your mortgage.

 

1. Agreement in Principle

This is the agreement provided by the mortgage lender which states the amount they are prepared to lend to you subject to a full mortgage application with supporting documentation and their enquiries during underwriting being satisfied. It’s useful if you haven’t found a property to buy but would like to know how much you could potentially borrow.

2. Conclude Missives

The contract is normally formed by missives of sale between the solicitors on behalf of each the seller and purchaser. Missives are letters of body of which contain proposed sale contracts and negotiate terms. Once all the contractual terms are agreed, the missives are said to be concluded, and these serve as a binding contract for the sale of the property.

3. Conveyancing

The process of transferring the legal title of property from the seller to you.

4. Disbursements

This is money that your solicitors have had to pay to third parties during the conveyancing process, and which they will claim back from you. Disbursements will include things like search fees and land registry fees. Check that disbursements are included in your quote (most are known in advance) otherwise your bill could be a lot higher than you expect.

5. Land & Buildings Transaction Tax

This is the tax charged by the Scottish Government for buying a property/land. The amount varies depending on the value of the property.

6. Land Registry Records

These records state who owns what land/property. When a property changes hands your solicitor will make sure this transfer is recorded at the Land Registry.

7. Local Authority Search

A search that asks the local authority about things that may affect the property, such as : whether the road the property stands on is maintained by the council, planning applications that may affect  the property, possible planning restrictions, and rights of way.

8. Mortgage

This is the loan used to buy a property. Because it is secured on the property being bought the property cannot be sold until the mortgage is paid off (either at the end of its term or, if you are selling, by using proceeds from the sale to pay off the balance).

9. Mortgage Deed

The legal charge that gives the mortgage lender rights over the property until the mortgage has been repaid.

10. Mortgage Valuation

This is the valuation survey carried out by your bank or building society before they will lend on a property. This will help determine how much a lender is willing to lend.

11. Title Deeds

The documents that prove ownership of a property and which set out any rights or obligations affecting the property. If the property is mortgaged then the deeds may be held by the mortgage lender.

For any queries speak to our expert mortgage advisers at Aberdeen Mortgage Company, call 01224 316200 or fill in our online enquiry form.

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Lifetime Finance Group Limited trading as Aberdeen Mortgage Company is an appointed representative of PRIMIS Mortgage Network, a trading name of First Complete Limited, which is authorised and regulated by the Financial Conduct Authority for mortgages, protection insurance and general insurance products. The Financial Conduct Authority does not regulate some forms of Buy to Let. Lifetime Finance Group Limited.