Home Buying Jargon Explained
Posted on September 13th, 2019Buying a home is probably the biggest financial investment that most people will have to make in their lives. However, the process of buying one is laden with paperwork and technical terms that make it more stressful than many would imagine. Here’s some useful home buying jargon explained.
Agreement in Principle
An agreement in principle (also known sometimes as a Decision in Principle) is something that is given to you by a lender (Bank or Building Society), which outlines the exact amount that you are eligible to borrow from them. This is not only useful for you as you will then know your maximum budget, but it also proves that you can actually afford the home before you put down a deposit.
Completion
Completion is the last stage of the buying process, where the legal ownership of the property is transferred from seller to buyer.
Conveyancing
Conveyancing is the name of the process wherein the legal ownership of a home is transferred from seller to buyer.
Deposit
The deposit is the minimum cash amount needed for you to reserve a home. Most homes require at least a 10% deposit of the home’s total value, but with the government’s Help to Buy scheme, you only need a 5% deposit.
Exchange of contracts
The point of exchanging contracts is where the process of buying a home becomes legally binding. Before contracts are exchanged, both the seller and the buyer can back out of the sale at any time.
Freehold
Freehold describes the tenure of a home. This particular tenure is where you own both the home and the land that it resides on.
Ground rent
Ground rent is the annual fee paid to the freeholder of a property. As such, ground rent only applies to leasehold properties, not freehold.
Leasehold
Leasehold is another property tenure. With leasehold properties, you own the home, but not the land it is built on. You will therefore have to pay ground rent to the freeholder that owns the land.
Mortgage
A mortgage is a loan that is specifically for buying a property. Mortgage types vary, and the amount you will need to take out on a mortgage depends on the value of your chosen home.
Solicitor
A solicitor is a legal professional that is responsible for managing the conveyancing process of your home.
Stamp Duty
Stamp Duty is a tax paid on any property above £125,000 that is bought in either England or Northern Ireland. The amount of stamp duty that you pay will depend on the value of the property you are buying.
Tenure
Tenure pertains to the conditions under which a property or its land are occupied. You can have either a freehold tenure or a leasehold tenure.
Title deeds
Title deeds are documents which state the names of the legal owners of a property or piece of land.
Has our home buying jargon buster cleared up your confusion?
Hopefully, this blog has made you more comfortable with the home buying process. We understand that much of the jargon used can be confusing and this only adds to the stress of moving home.
Since you’re in the home buying mindset, why not take a look at our stunning new build homes? We have a selection of developments in locations all across the country and our variety of house types is sure to offer you something that fits your needs.
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