Dictionary - Mortgages

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Annual Percentage Rate (APR)

This is the total cost of the loan in terms of a yearly percentage of the amount you borrow, taking into account interest payments, repayment of capital, all costs, arrangement fees, and the like, based on projections for the payments applicable during the term of a mortgage expressed as a rate of interest. It allows you to compare like with like when comparing offers from different lenders.

Burdens

Conditions in Scottish title deeds about the use of the property.

CAP

A maximum rate that a mortgage cannot go above for a set period of time.

Completion

The moment when you become the legal owner of a property, and consequently, the moment when you can move in.

Conveyancing

The legal work involved in buying and selling properties.

Conclusion of Missives

The point in Scotland at which buyer and seller have committed themselves to the deal.

Exchange of contracts

The point in England, Wales and N. Ireland at which buyer and seller have legally committed themselves to a deal.

Fixed interest rate

An interest rate that's fixed for a length of time: it will not go up or down - even if the variable mortgage rate does.

Freehold

If you have a freehold property, you own it.

Feuhold

Similar to Freehold under Scottish law.

Ground rent

The annual fee a leasehold pays a freeholder (usually pretty low). Ground rent generally applies to flats.

Mortgage Interest Relief At Source (MIRAS)

MIRAS was removed by the Government in April 2000.

Mortgagee

An institution that gives someone a mortgage (i.e., the building society).

Mortgagor

Someone who takes out a mortgage (i.e., the borrower).

Stamp Duty

Government tax on property purchase: 1% of the purchase price on any property bought for more than £60,000, 3% for properties over £250,000 and 4% for properties over £500,000.

Title

The legal right to ownership of a property.

Title deeds

Documents showing who owns a property.

Total Amount Payable (TAP)

The total cost of repaying a mortgage over the loan period, including the initial money borrowed, interest charges, etc.

Transfer deed

Purchase document which transfers ownership from the seller to the buyer.

Variable interest rate

An interest rate which can go up or down in line with general interest rates.