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Jargon Buster

Not sure what it all means?

Take a look through our Jargon Buster…



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 MIG - Indemnity Guarantee Premium and Mortgage Indemnity Premium.


Annual Percentage Rate. The true cost of a loan.


Property sale. If you win the bid, you are legally bound to buy the house.



A place to go & ask nicely for Mortgages & Loans !

Bridging Loan

An expensive temporary loan to tide you over when having to buy your new house before selling your old home.


An intermediary who will give advice and offer a range of mortgages.

Building Society

Another place to go & ask nicely again for Mortgages & Loans !

Buildings Insurance

Insurance to cover any structural damage to your house.



The sum borrowed in a mortgage.


This occurs when the seller needs the sale of their house to occur before they can complete the purchase of another property. The same situation may exist for others in the chain. As a result, the whole chain can collapse if one link breaks.


The term used for the security that the lender relies on when granting a mortgage.


The point when contracts have been exchanged and ownership legally passes to the buyer.

Contents Insurance

Insurance to cover any loss or damage to your possessions.

Contract Race

When two parties have made an offer on the same house. The vendor will sell to the first party to exchange contracts.


The legal documents needed to transfer the ownership of property.


Legal work involved in buying and selling a house.


Direct Lenders

A new form of mortgage lender who deals solely over the telephone.


Expenses paid by the solicitor on behalf of the purchaser.

Discounted Rate

A reduced mortgage interest rate which is subtracted from the Standard Variable rate.


Endowment Mortgage

Type of mortgage where monthly payments are made into a endowment (life assurance) policy. The loan is paid off in one lump sum at the end of the loan period.

Estate Agent

Property agents who link up buyers and sellers. Estate Agents advertise houses & arrange viewings.


The initial sum you have to pay on an insurance claim.

Exchange of Contracts

The point at which buyer and seller are legally bound to the sale and purchase of the property.


Failed Valuation Survey

When the lender turns down your mortgage application after reading the surveyor's valuation report.


Absolute ownership of property and land.



'Gazumping' is the term used to refer to when a seller accepts an offer from one potential buyer, but then accepts a higher offer from someone else. The first buyer is left in the lurch, and either has to offer a higher price or accept that they have lost that home and continue looking. This practice tends to occur in a market when house prices are rising and there are more buyers around than sellers.

The problem is that until contracts have been exchanged the sale agreement is not legally binding. Once your offer has been accepted, either you or the seller can pull out at any time until the exchange of contracts. Unfortunately agents are legally obliged to inform sellers of all offers made on their property, even after one offer has been accepted. But during this period between the acceptance of your offer and exchange, you as the buyer spend a considerable amount of money on surveys, solicitor's fees, and confirmation of your mortgage offer. If the sale falls through you do not get this money back. If you are part of a chain of sales, you could even be affected by someone else being gazumped.


Indemnity Guarantee Premium

The Mortgage Indemnity Guarantee Premium is a payment often demanded by a lender in order for them to lend.


Joint Agents

When the seller commissions two independent Estate Agents to sell their house.


Land Registry

Carried out by the solicitor to register buyer as the new owner of the house.


Document in which the owner of a freehold property lets out their premises to a named party at a certain price and for a specified time.


The ownership of a lease.

Lender's Arrangement Fees

Charge passed on to the buyer by 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.

Lender's Valuation

A valuation of the proposed property carried out by the lender before agreeing to give out a mortgage. This is only a valuation survey. A separate full structural survey will be needed by the buyer.

Life Assurance

An insurance policy which pays out a fixed lump sum on death of an individual. Life Assurance helps protect from financial difficulties.


A percentage expressing size of mortgage value of house. For example, House Value=£100,000, Mortgage Size=£90,000. Loan-to-Value=90%.



A long term loan to fund the buying of a property.


The lender of a mortgage.


The house buyer who takes out a mortgage.

Mortgage Term

Period over which mortgage is to be repaid.

Multi Agency

When a vendor instructs many agents, with the one that finds a buyer taking all the commission. The disadvantages of Multi Agency are:

  1. Commission rates are similar to "Joint Sole Agency" so it can be an expensive way to sell.
  2. Having a house marketed by many agents may be seen as an act of desperation and could cause potential buyers to become suspicious of (or dismiss) the property.
  3. Agents don't like doing business this way and some will refuse to market the property in this way.
  4. Agents prefer exclusive rights to market properties and will prioritise the sale of homes on which they are instructed as "Sole Agent" over multi agency properties.

The obvious advantage of multi-agency, however, is that the house should gain more exposure to would-be buyers.


Negative Equity

When the value of your house falls to less than your mortgage.



The monthly amount payable to an insurance policy.


The sum of the loan on which interest is calculated.

Public Liability Insurance

Insurance which covers injury or death to anyone on or around your property.



When a mortgage if fully repaid.

Relocation Agents

Specialists in finding houses, raising finances, organizing surveys and completing negotiations.

Repayment Mortgage

A basic mortgage capital and interest on the loan are paid off in monthly installments.


When the mortgage lender takes away your home because you have fallen too far behind on your mortgage repayments.


Sole Agent

When a seller chooses only one Estate Agent to sell their home.


Legal Professional who acts on behalf of the buyer in the purchase of a house. The solicitor will check the legal position of the house, carry out a local authority search and oversee the exchange of contracts between the two parties.

Stamp Duty

This is the tax that most people will pay when they buy another property. It is generally the purchaser who pays this tax via their solicitor although some sellers will pay this tax for you as part of a sale agreement. The percentage you pay depends on the sale price of your property and is currently only payable on a sale value above £125,000 - the current rates are as follows:

  • Up to £125,000 - 0%
  • Over £125,000 to £250,000 - 1%
  • Over £250,000 to £500,000 - 3%
  • Over £500,000 to £1,000,000 - 4%
  • Over £1,000,000 - 5%

From 25th March 2010 - First time buyers threshold increased to £250,000 (ie:0% stamp duty paid for homes valued up to £250,000 for first time buyers only). This will last until 31st December 2011.

Note that the stamp duty rate shown is payable on all the amount and is not split according to the percentages. So if you have a sale price of £260,000 then your payment rate is 3% of all of the £260,000.

Structural Survey

A report constructed by the surveyor detailing firstly, whether the house is structurally sound and secondly, listing the major/minor defects, (including the necessary work which needs to be done).


The person who carries out a structural survey of the property, examining the structure and general state of the house.



The period in which a mortgage is taken out.


The legal right to ownership of a property.

Title Deeds

The document which shows the ownership of a property.


Valuation Survey

A survey carried out by the lender to ensure that the house's value is not less than the proposed loan. Often the lender will arrange the survey and bill the buyer. This cannot be used as a structural survey.