There is so much confusing jargon in property transactions. Here's our A-Z Jargon Translator to help you to understand everything about your property transaction.

 

  
  Additional security fee An up-front, one off fee paid to the lender to protect them against the borrower defaulting on the loan. Usually, charged on mortgages over 75% of the house value. Also known as Mortgage Indemnity Guarantee (MIG) premium and Mortgage Indemnity Premium.  
  Annual percentage rate (APR) The total cost of a loan, including all costs, interest charges and arrangement fees shown as a percentage rate and easily comparable with mortgage interest rates.  
  Arrangement fees Charged to arrange a loan on certain products. Usually applied to loans where a special interest rate applies e.g. fixed or capped rates.  
  Assignment The transfer of ownership of an insurance policy or lease.  
  Auction The sale of a property to the highest bidder.  
  Basic variable mortgage rate

Mortgage lender's standard rate of interest which may be increased or decreased periodically by the lender depending on prevailing economic conditions.

 		 
  Bridging loan A temporary loan providing financial cover which allows a purchaser to complete on the purchase of a new property before selling the previous property.  
  Building survey (formerly full structural survey) A full inspection of the property, conducted by a chartered surveyor, who then writes a detailed report including any property defects. Suitable for any house, particularly older properties and those which have been poorly maintained. Also for properties which have been extensively altered or extended, or any property you may wish to alter or extend.  
  Buy to let mortgage A type of mortgage specifically designed for people buying a property with the intention of letting it out.  
  Capital The amount of the loan on which interest is calculated.  
  Capped mortgage Normally agreed for a fixed period of time, many lenders provide mortgages with an upper limit on the interest rate. Thus if the standard interest rate is lower than the upper limit you will be charged the lower rate, but if the standard variable rate is higher you will be charged at the agreed rate.  
  Chain

The situation that occurs when a buyer is reliant upon completion of the sale of his existing property, in order to complete on the purchase of his new property.

  
  CML The council of mortgage lenders, which as devised the Mortgage Code to ensure lenders treat customers fairly.  
  Completion The point at which all transactions concerning the property’s sale are concluded and legal transfer of ownership passes to the buyer.  
  Conditions of sale The details which determine the rights and duties of the buyer and seller. These may be national, statutory, or the Law Society’s conditions.  
  Contents insurance Insurance to cover any loss or damage to your possessions within the property.  
  Contract A legal agreement between the seller and buyer of a property which binds both parties to complete the transaction.  
  Contract race When two parties have made an offer on the same house. The vendor will sell to the first party to exchange contracts, ie: it's a race!.  
  Conveyancer A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.  
  Conveyancing Traditional term for the legal work involved in the purchase and sale of a property.  
  Covenants Rules and regulations governing the property, contained in its title deeds or lease.  
  Deeds Legal title documents proving ownership. The deeds will be held by the mortgage lender.  
  Deposit A sum of money (usually 10%) paid by the buyer on exchange of contracts.  
  Detached Term used to describe a property that stands alone and is separated from all others  
  Development A newly built residence or an older property which has been refurbished and modernised.  
  Dilapidations Any disrepair or damage to a rented property.  
  Disbursements Fees paid by the buyer's solicitor on the buyer’s behalf such as stamp duty, land registry and search fees.  
  Discharge Paying off a mortgage.  
  Draft Contract Preliminary, unconfirmed version of the contract.  
  Early redemption charge (ERC) A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.  
  Endowment mortgage Interest-only repayments combined with monthly premiums into an endowment policy designed to pay off the loan at the end of the term.  
  Equity The difference between the value of a property and the amount of mortgage owed.  
  Excess The initial sum you have to pay on an insurance claim.  
  Exchange of contracts The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at the agreed price.  
  Failed valuation survey When the lender turns down your mortgage application after the surveyor’s valuation report indicates the property is not worth the sum sought.  
  Fixed rate mortgage A mortgage in which the interest rate is set for an agreed period of time.  
  Fixtures & fittings All non-structural items included in the purchase of a property.  
  Flexible mortgage An arrangement whereby you can increase or decrease your mortgage repayments.  
  Freehold Technical word for the ownership of the property, meaning that it belongs to the owner without limitation of time.  
  Gazumping This is when a seller accepts a higher offer from a third party on a property that they have agreed to sell to someone else, but have not yet exchanged contracts.  
  Gazundering When a buyer offers the seller a lower offer just before contracts are about to be exchanged.  
  Ground rent The annual charge levied by the freeholder to the leaseholder.  
  Guarantor The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrowers debt if the borrower defaults.  
  Homebuyer's survey and valuation (house/flat buyer's report) This is a survey report, which is not as detailed as a structural survey, carried out by a chartered surveyor to assess the state of a property and its value.  
  IFA Independent Financial Advisor.  
  Individual savings account
(ISA) mortgage		 An interest only mortgage linked to an Individual Savings Account fund, which is designed to pay off the loan at the end of the period.  
  Interest charges (mortgage) The charges that banks make on a loan, calculated as a percentage of the amount borrowed.  
  Interest-only mortgage There are 2 types of mortgage, interest-only or capital repayment. Interest-only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment vehicle are paid monthly. At the end of the term, the proceeds from the investment vehicle are intended to repay the mortgage. The amount will depend on the performance of the investment vehicle. If you choose an interest only mortgage you will be responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.  
  Inventory A list which describes the condition of furnishings and contents of a leased property at the commencement of the tenancy in order that any dilapidation during the tenancy can be identified.  
  Land registry fee Paid to the Land Registry to register ownership of a property.  
  Lease A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time, after the expiry of which ownership may revert to the freeholder or superior leaseholder.  
  Leasehold Denotes that the ownership of the property is by way of a lease.  
  Lender’s arrangement fees Charge passed on to the buyer by the lender for arranging a loan.  
  Lender’s legal fees The fees incurred by the lender when arranging a mortgage. These costs are passed on to the buyer.  
  Listed building One officially listed as being of special architectural or historic interest, which cannot be demolished or altered without (local) government consent.  
  Loan to value (LTV) The size of the mortgage as a percentage of the property’s value.  
  Local authority search

Procedure whereby a buyer's solicitor makes an enquiry to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area.

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