Accident, Sickness and Unemployment insurance (ASU)
This is designed to cover your monthly mortgage repayments should you be made redundant or unable to work through ill health.
Advance
Another term for the mortgage loan itself.
Adverse credit
This term would be used when dealing with an applicant who has a poor credit history, such as having County Court Judgements (CCJs) listed against their name.
Affordable housing
Housing provided with some form of public subsidy for rent or low cost home ownership for people in housing need who would otherwise not be able to access the housing market. The government’s programme for affordable housing is called HomeBuy.
Allocation
An offer of accommodation by a council or a housing association.
Annual Percentage Rate (APR)
This shows you the true cost of borrowing and all lenders should calculate it in the same way. Arrangement fees and any other charges must be included together with interest. Check that you are being quoted the APR and not the monthly rate of interest when you borrow money.
Balanced Communities
Communities containing a mix of different tenure housing and meeting a variety of different housing needs. These are often referred to as “sustainable communities”.
Base Rate
The rate of interest set by the Bank of England at its monthly
meeting.
Completion
The final legal transfer of ownership of the property from the
seller to the buyer. Completion should take place within 28 days of exchange of contracts but often happens sooner than that.
Conveyancing
The term for the legal work involved in buying a property. It is usually done by a solicitor.
Credit Score
As assessment based on your financial record which is carried
out by lenders so that they can decide whether to accept you
as a new borrower.
Decreasing Term
A type of life assurance benefit designed to cover repayment
mortgages. It means that the amount of cover provided decreases
in line with the mortgage balance over the term of the mortgage.
Disabled Facility Grant (DFG)
A Disabled Facility Grant is a means-tested mandatory grant designed to help make the home of disabled person more suitable, and to help them manage more independently in the home.
Disbursements
Additional fees collected by the solicitor. They include stamp duty, land registry fees, local authority search fees, cost of transferring funds, bankruptcy searches and other small costs. These are fixed costs and are not part of the solicitor’s own charges.
Energy Efficiency Grant
Grants paid to home owners to enable them to reduce the amount
on energy needed to heat their home.
Exchange of contracts
This happens when both the buyer’s solicitor and the seller’s solicitor are satisfied that the sale can go ahead. Each solicitor literally exchanges a contract with the other. At this stage, you are legally committed to the purchase of the property.
Government Office for the South East (GOSE)
Government Department which oversees Local Authority planning
and housing issues in Kent and other areas of the South East.
Homebuyer’s Survey
A detailed surveyor’s report carried out on the property
you intend to buy. This report also includes a property valuation.
Home Energy Efficiency Scheme (HEES)
The Home Energy Efficiency Scheme allocates grants to low income
households for energy efficiency measures such as draught proofing
or loft insulation.
HECA (Home Energy Conservation Act)
Act introduced by central government which sets out targets and
requires local authorities to monitor and improve the energy
efficiency of all housing stock in their area.
HomeBuy
HomeBuy is the government’s programme to assist people, mainly first time buyers and public sector key workers, to purchase a home in areas where property prices are expensive.
Housing Organisations Mobility Scheme (HOMES)
A national organisation concerned with helping tenants exchange
between different landlords.
Housing Associations
A non-profit making organisation which provides and manages affordable
housing schemes. Also known as Registered Social Landlords
(RSLs).
Housing Benefit
A means-tested benefit to help tenants on low incomes to pay
their rent.
House Condition Survey
A survey gathering information on a sample of the housing stock
to assess its physical condition and estimate levels of unfitness.
Housing Corporation
Government body which exists to supervise and regulate housing associations and provide some of their funding for the provision of affordable housing.
Houses in Multiple Occupation (HMOs)
A house in which the occupants do not form a single household
Housing Needs Survey
A comprehensive sample survey carried out to identify all forms
of housing need, and especially the demand for affordable housing.
Housing Needs Register
The main method in the district for people to register their housing need and gain access to social housing in the district. The scheme is operated by a council in partnership with local housing associations and the voluntary sector. Applicants are placed into a series of five bands, in date order, according to their level of housing need. Applicants in band 1 have the highest level of need.
Housing Strategy Statement
Document produced every three years which sets out the activities that a council intends to carry out over the period to meet the housing needs of the district. The strategy is part of a council’s bid for government funds and is used to assess a council’s overall performance as a housing provider and enabler.
Income Reference
Most lenders will ask for proof of income, usually three months’ pay
slips and a P60 plus three months’ bank statements. They
will also write to your employer for confirmation of your employment
details, length of service and pay structure.
IFA
An Independent Financial Adviser is an individual or company
offering impartial advice about financial matters.
Interest Only
A type of mortgage where the monthly payments consist of only
the interest on the loan. It is usually linked with a regular
savings plan such as an ISA (individual savings account) or
to an endowment policy. In both cases, borrowers must be fully
aware that their savings or endowment may not produce enough
money to repay the loan in full
Kent County Structure Plan
County Council document which sets out the planning proposals
and guidelines for the whole county.
Legal Fees
The charges made by the solicitor for handling the conveyancing
process. These fees are subject to VAT at 17.5per cent.
Lender’s Base Rate
This is the lender’s own standard variable rate, set for
their own commercial reasons. Do not confuse it with the Bank
of England base rate.
Level Term Assurance
Life cover that can be taken out in a single name or joint names
to provide protection for the loan. The amount of cover remains
the same all the way through the repayment period of the mortgage.
This type of cover can also include illness benefit.
Lifetime Homes
Homes designed to meet an occupier’s housing needs throughout
their life, removing the need for them to move to specially adapted
homes. Homes developed to this standard are easily adapted and
include such measure as wheel chair size doorways and lower level
worktops.
Local Authority
The local council which works with housing associations to identify
areas where rented, shared ownership or special needs homes
are required.
Local Authority Search
These are enquiries made by solicitors to find out whether any
proposed planning applications are being considered near to
the property being bought. For example, a planning application
to build a major new road could have a major impact on the
value of the property.
Low Cost Home Ownership (LCHO)
Schemes designed to allow people on low incomes to access owner
occupation.
Making an Offer
When you have found the right property, you make a formal offer
to buy the property. This simply means agreeing a price that
is subject to contract and also to a satisfactory survey being
carried out.
Mortgage Indemnity Guarantee (MIG)
This is an insurance protection which the lender requires when
they are giving a loan which is a high percentage of the property
price.
Mortgage Offer
The formal paperwork which sets out the terms upon which the
lender will grant a mortgage. It should state the interest
rate, the term of the loan, the structure of the loan, the
monthly repayments and all of the lender’s legal requirements.
Mortgage Protection Clause
A clause inserted into any Shared Ownership scheme that protects
the lender’s investment in the property. This clause
means that you do not have to buy any mortgage protection cover
(MIG), as outlined above, in case of financial difficulty.
Mortgage Term
The amount of time you have to repay the loan. This is usually
25 years but this can be arranged over a different number of
years if the lender agrees.
Office of the Deputy Prime Minister (ODPM)
Government Department which oversees Housing Policy and resources
at a national level.
Redemption Fee
This is a penalty fee which may be charged by your lender if
you decide you wish to repay the loan earlier than the due
date. When making an application to a lender, always check
whether this type of penalty applies.
Repayment Mortgage
This type of mortgage allows for monthly payments of both capital
(the loan) and interest (how the lender is charging you for
borrowing). Under this type of mortgage, the balance reduces
gradually over the term (the length of time you have to repay
the loan).
Right to Buy
Enables Council tenants to purchase their home from a council
at a discounted rate.
Rural Housing
Housing provided in villages and other more smaller settlements
to meet local housing needs.
SAP Energy Rating
The Government’s procedure for producing an energy rating
for a dwelling, based on annual calculated costs for space and
water heating.
Staircasing
Most part-buy/part-rent schemes offer the option for the buyers
to buy more shares in their home, until they own the property
outright. As more shares are bought, the rent decreases (but
the mortgages increases).
Stamp Duty
Government tax payable when you buy a property worth more than £120,000.
For applications under shared ownership and Homebuy schemes,
the tax is worked out on the property value, not the share you
buy. This should be checked by your solicitor before you proceed.
Structural Survey
A very detailed survey carried out by a surveyor, usually only
on old properties or on a property of unusual design or construction.
A buyer could also get a full structural survey carried out
if they want specific problems to be carefully checked.
Sustainable Communities
Communities which meet a range of housing needs, providing housing
in all the different forms of tenures. Balanced communities
may also have a range of facilities to meet the day-to-day
needs of residents.
Valuation
A simple inspection of the property to assess its current market
value. It is not a full survey.
HomeBuy Agent
A HomeBuy Agent is a housing association appointed by the government to process applications for HomeBuy across a given area (usually a county).
Please be aware that the market value of properties can go down as well as up.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
|
