Buying A Home Glossary

Are you buying a home? Amazing news!
We can guess why you’re here, though. Have you noticed that your solicitors and estate agents seem to be speaking a different language?

Yep, from conveyance and keys to getting the deeds, it’s complicated. But we can make it easier.

Keep this glossary handy and use it to decode complicated emails, letters and phone calls, and just watch - it will all start to make sense.

Let’s get into it.

The key house buying terms, made simple

Money and mortgages

Advance (mortgage or home purchase loan)
The money you borrow to buy your home.

‍APR (Annual Percentage Rate)
The total cost of your mortgage, all in, including interest and fees. It’s usually shown as a percentage so you can compare deals quickly.

‍Deposit
The cash you put towards your home. Most people try to save a deposit of between 5% and 10% of the value of their future home. You may save up a bit more than that to cover things like stamp duty, solicitor’s fees and moving costs.

‍Equity
The part of your home you actually own (the value of your home minus what you owe on your mortgage).

‍Fixed-rate mortgage
‍A mortgage where your payment stays the same for a specific length of time, which is usually two, three or five years, but may stretch into seven or 10 years in some deals.

‍Fees
‍There are a few that might crop up when you’re buying a home:

Booking fee: Your lender might charge you to access a particular mortgage deal, also sometimes called an arrangement fee
Broker fee: Something you pay a mortgage advisor to get some advice
Valuation fee: Charged by your mortgage lender to find out how much the property you’d like to buy is worth

Variable-rate mortgage
‍The cost of your mortgage payments will rise and fall, usually tracking the Bank of England’s base rate, or your lender’s Standard Variable Rate (SVR).
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‍Interest-only mortgage
You only pay the interest each month, not the loan itself. You’ll need a plan to repay the full amount later.
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‍Mortgage
‍A mortgage is a loan to buy a home. The bank lends you the money, and the house is its security (this is done through what is called a ‘first legal charge’) and you pay it back monthly over time, with interest.
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‍Mortgage calculator / Mortgage deposit calculator
‍These tools help you compare mortgage details and work out how much deposit you need for your new home. It means you can do the research without the help of a broker, which is super empowering, but sometimes brokers have access to deals and information no one else does. It might be worth asking for their perspective, too.

‍Mortgage interest rate
‍It’s a percentage charged by your lender, on top of the amount you want to borrow to buy your home. Think of it as the cost of borrowing, ideally you want to pay as little interest as possible, so compare all the deals and weigh up which will be most affordable for you.

‍Repayment mortgage
A mortgage where you pay back both the loan and interest every month. At the end of the mortgage, you fully own your home.

‍Offset mortgage
Your savings reduce the interest you pay on your mortgage. It means you can pay less interest on your mortgage. If you had an offset mortgage of £300,000 and savings of £15,000, you’d only pay interest on £285,000 of your mortgage - winning! The interest rates aren’t always as competitive as interest-only or variable rate deals, so shop around to find the right one for you. And be mindful that the savings you use to offset will not earn any interest.

‍Overpayment
‍An overpayment to your mortgage is where you voluntarily pay any extra money towards your loan on top of your regular repayments. Depending on your agreement, you could slowly increase your mortgage repayments or pay one lump sum. Sounds exciting, right? Just make sure you check with your lender so you don’t get charged an early repayment charge (see below).

‍Early repayment charge (ERC)
If you are able to pay off your mortgage sooner than planned, sometimes you’ll need to pay a fee - the early repayment charge. Exactly how much it is will be in the terms and conditions of your mortgage, so dig out the paperwork.

The buying process

Offer
It’s what you’d like to pay for a home. You’ll tell the seller, or their estate agent, your ‘offer’ and wait to see if they accept it. Nerve-wracking, yes, but incredibly exciting. It’s not legally binding yet, so you can change your offer if you need to.

‍Sale agreed / Under offer
The seller has accepted, hooray! But hang in there, it’s not final until…

‍Exchange of contracts
This is the moment when the sale becomes legally binding. From here, you're committed. You would often pay the agreed property deposit (usually 5-10%) on or around this date as well.

‍Check out our guide on how to buy a home to learn about the timeline of when you’ll reach this stage.

‍Completion date
‍This is where it gets real. On the completion date, your money’s transferred, you’ll get your keys, and the home you’ve worked so hard for is officially yours!

Legal and admin words

Conveyancing
The legal and admin process of transferring ownership from the seller to you.

‍Conveyancer / Solicitor
The people who handle the legal side for you. Conveyancers are specialist support, whereas a solicitor has a broader skillset. There are subtle differences between them.

‍Contract
The legal agreement between you (as the buyer) and the seller.

‍Conveyancing searches
No one likes surprises, especially when they cost a lot of money. The ‘searches’ are official checks made by your solicitor to protect you from surprises, so you know what you’re getting into. They’re essential and look over the water supply, planning applications, flood risks, and so much more.

‍Title deeds
Your title deeds prove who owns your property, or land, your legal rights, and may even detail the history of your property if it’s very old.

‍Land Registry
The official record of property ownership in England and Wales. It sometimes replaces the need for physical title deeds, but in any situation, it’s mandatory to register your home with the HM Land Registry. Registration happens when you buy, sell, mortgage or gift a home.

Types of ownership

Freehold
You own your home and the land it’s built on. Within your boundary lines, it’s all yours.

‍Leasehold
Buying a flat, or a maisonette? It’s likely a leasehold. It means you’ll own the property and the right to live there for a set time, but you don’t own the land. Sometimes the value of leasehold properties decreases as the lease life gets shorter. If your lease is less than 80 years, you will need to extend it. If your dream home has a lease with less than 80 years remaining, it might be harder to get a mortgage, but your solicitor will help you to get things sorted out with the seller.

‍Shared ownership
This is a government-backed scheme that helps you to buy part of the property and pay rent on the rest, which is owned by a housing association. There’s an eligibility criteria to access shared ownership options, but if you qualify, you’ll pay a lower deposit and be able to buy more shares in your home over time. The more of the home you own, the less rent you’ll pay. It’s an accessible way to get on the housing ladder sooner.

‍Joint tenancy
You own the property equally with someone else. It’s 50/50. If one of you dies, ownership is given to the other person.

‍Tenants in common
You own your home with someone else, but unlike joint tenancy, it’s an unequal split. How much you own is based on your financial contributions. You might own 60%, and the other person owns 40%, for example.

Surveys and protection

Survey
A professional check of the property’s condition to spot (potentially expensive) problems with the home. If the roof needs replacing, it should show up in your survey. It’s often called a RICS Home Survey, and you can pick between three different levels:

Level one for new properties
Level two for homes in a reasonable condition
Level three for larger, older homes

Mortgage valuation
A basic check for the lender to confirm how much your home is worth.

‍Buildings insurance
An insurance policy that covers the structure of your home, like the walls and roof. Most lenders will ask you to have a buildings insurance policy in place as a condition of lending the money.

‍Contents insurance
This is an insurance policy that covers your belongings inside your home. Imagine you pick your home up, turn it upside down and shake everything out. All the items that fall out are covered by contents insurance.

‍Energy Performance Certificate (EPC)
Rates how energy efficient the home is (on a scale of A–G). The more efficient it is (with A being the most efficient and G being the least), the cheaper your utility bills should be. This is why it’s worth having a closer look at the rating, and whether it could be improved.

Key terms to know when under offer

Chain
A line of buyers and sellers linked together is called a chain. Moving days often fall on a Friday, the whole chain ‘completes’, and everyone moves at the same time. If one link in the chain breaks, it can delay everyone.

‍Gazumping
Gazumping is when someone outbids you after your offer is accepted. It’s frustrating, but if it happens to you, you’re not alone. It’s part and parcel of the experience when it’s a competitive market.

‍Gazundering
A buyer lowers their offer at the last minute. It’s a cheeky tactic that puts pressure on the seller to accept. They don’t want the sale to fall through, and risk the chain collapsing.

‍Down value
This is when a surveyor assesses your property and discovers it has a lower value than the agreed sale price. It can be quite a big deal because it can disrupt your mortgage application, but on the flip side, it saves you from overpaying. It’s an invaluable reality check.

Other words worth knowing

Buy-to-let
Buying a property to rent it out.

‍Bridging loan
It’s a short-term loan to “bridge” a financial gap during a house move. You might use it if you buy your next home before you’ve sold the one you’re in. It’s a risky situation, so make sure you get expert support before you move ahead.

‍Gifted deposit
Money given to you to help you buy. Money you’ve won, birthday presents, inheritance - it’s all a step towards owning your home.

‍Stamp duty
The tax you pay when buying property. How much stamp duty you’ll pay depends on the value of the house. It has a slightly different name in Wales, Land Transaction Tax, and Land and Buildings Transaction Tax in Scotland.

‍Council tax
Local tax for services like waste collection and schools.

Make your next move

You’ve decoded the complex stuff, and you’re owning the conversation, nice work!

Now, let’s pick something to focus on next:

You’ve got this. Make this the house move where you really know your stuff, and every step towards owning your home is completely on (and in!) your terms. If you have any doubts or want more information, do speak to a financial adviser or your solicitor.