Property Jargon Explained

A simple guide to property jargon

There can be a lot of jargon involved when it comes to buying a house, so here’s our straightforward guide to making sense of it all.

Wherever possible, Tulloch Homes will avoid using jargon. But you might well come across it at some stage in the buying process. Hopefully this will help!

Land Registry Fees

These fees are fixed by the government and are a compulsory cost when purchasing a new property. The level of fee is on a scale which will vary depending on the price of the property. This will then place your name on the Land Register as the new owners of the property.

Deposit

This is the money that the lender requires the purchaser to contribute towards the cost of the property. This is usually 5% or 10%. This is to demonstrate the buyer’s commitment and is the difference between the purchase price and mortgage amount.

Missives

Missives is the term used as the name for a contract. The missive is sent out by Tulloch Homes (the builder) to you (the customers).This is a legal document which you take to your solicitor for advice & discussion before signing and returning to the seller (the builder) Tulloch Homes. There may be some correspondence on the finer details between both solicitors and when these points are agreed on all the details of the offer, the missives are then said to be concluded. This now means that both parties have entered into a legally binding contract for your purchase of the new property. There are penalties for non compliances in terms of the missives.

Searches

This is one of the tasks that your solicitor will undertake when you are purchasing a property.

The Searches check the seller’s title to the property and also disclose any previous securities over the property which will be released at the time of purchase. The cost of obtaining Searches is met by the purchaser.

Local authority search

Future planning decisions can affect properties; therefore your solicitor may in some cases conduct a search to establish if the home you wish to purchase is likely to be affected by any adjacent planning consents.

Disbursements

All the costs that are incurred in the course of the purchase of the new property which your solicitors will settle and add to the purchaser’s account.

Mortgage

A mortgage is a loan obtained from a Bank or Building society. This loan is used to help purchase your new property and the lender takes a security over your property and may retain your title deeds until the mortgage is repaid.

Agreement in Principal

Your lender will run credit history checks on your financial conduct (credit cards, arrears) and subject to a satisfactory outcome and other key considerations such as affordability and also a satisfactory property valuation report to confirm value the lender will then issue a letter to confirm the mortgage is approved.

Term

The period of time that the mortgage is taken out over a number of years. This is usually 25 years but can vary to suit the purchaser’s requirements.

LTV

Loan to value is reference to the size of the mortgage as a percentage of the property value.

Building insurance

When you borrow money from a bank or building society, your lender will ask to see details of your Insurance policy before they transfer the funds for the purchase of the new property. This ensures their investment is secured against risk.

Title

The rights and obligation that are attached and affect the property. Title deeds – Prove ownership of the property. Report on title – The work your solicitor undertakes on your behalf will result in a certificate confirming that the title has been checked and is acceptable to the buyer. The lender will require this solicitors’ certificate before the mortgage money will be released for the new purchase.

CML

This “Council of Mortgage Lenders” CML Disclosure of Incentives form is completed by Tulloch Homes. It is supplied to the solicitor acting on behalf of the lender providing the mortgage finance for the property and to the valuer acting on behalf of the lender.

Tulloch Homes are obliged to disclose the value of any financial or non-financial/in-kind incentives received by the purchaser either before or after completion of the transaction. Any agreed part exchange figure would be declared on this form also.

Mortgage payment protection plan

This is an insurance policy which may be arranged in conjunction with a repayment mortgage. This type of policy protects your repayments in the event of redundancy.

Settlement

This is a term used to describe the handover of the purchase price on the agreed date which denotes the conclusion of the buying process. In exchange between solicitors of the purchase price being paid, the deeds and other documents relating to your new Tulloch home are delivered.

Date of entry

This is the day that you take possession of your new home and the purchase price is paid.

Land and Buildings Transaction Tax (LBTT)

Land & Buildings Tax (LBTT) is a tax charged by the Scottish Government if you buy a home for more than £145,000, or £175,000 if you are a first time buyer. It was introduced in Scotland on April 1st, 2015 and replaced UK Stamp Duty.

If you are buying an additional residential property in Scotland (such as buy-to-let or second home) of £40,000 or more, the Additional Dwelling Supplement (ADS) of LBTT now applies.

The current rate of ADS is 3% of the “relevant consideration”, usually the purchase price.

Check the LBTT property transactions calculator here.

Snagging

This word is used within the building industry to describe the process of checking for any faults or defects that may have occurred during the building process. These defects are documented by the sales consultants at the pre-handover meeting and rectified before and after the date of entry to the new property.

Factor

A professional property manager appointed to maintain the common areas within developments. An Annual payment is made by all properties on the development called a factor’s fee. An initial factor’s float is payable at settlement.

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