Advance
The mortgage loan.
Agreement in Principle Certificate (AIP)
A document indicating how much a bank or building society will lend based on the applicant’s monthly income and outgoings.
Annualised Percentage Rate (APR)
This is the cost of credit which assists you in comparing the true cost of different types of loan on an annual basis. It is a percentage rate, which considers the interest rate, the amount financed, the term of the loan and any other fees and charges.
Annuity Mortgage
This is the most common type of mortgage, also known as a Repayment Mortgage. Each month the borrower repays both monthly interest and a portion of the loan amount. Repayments in the early years of the mortgage are mainly comprised of interest. The balance of the mortgage loan owed decreases as the period progresses until the loan is fully paid at the end of the mortgage term.
Bridging loan
A short-term loan to bridge the period between when you buy a new property and sell your previous home.
Capital
The amount you have borrowed on the mortgage and on which interest is charged.
Closing/Completion
The point when the buyer becomes the legal owner of the property. This occurs when solicitors from both sides complete the transaction on behalf of the buyer and seller and the balance of the purchase price is paid, in return the buyer receives the keys to the house.
Communal Areas
The areas of the building and grounds which are used by some or all of the residents. These can include hallways, gardens and parking areas.
Contract
The legal document which transfers the ownership of the property from the seller to the buyer. This document will set out all the details of the transaction and will be drawn up by the solicitor for the seller.
Conveyancer
A solicitor or licensed conveyancer who does the legal work involved in selling and buying property.
Conveyancing
Legal process for transferring the ownership of property and land.
Credit Reference Agency
An organisation that keeps details of individuals and their credit histories. Lenders will check with a credit reference agency to see if someone applying for a mortgage has any known credit problems.
Deed
Also known as a “conveyance” this is a formal written instrument by which title to real property is transferred from one owner to another.
Deposit
Initial downpayment for a house. This is payable to the seller of the house usually an auctioneer or an estate agent. It will usually be 10% of the agreed purchase price.
Disbursements (conveyancing and outlay)
The cost your solicitor has to pay to carry out their work such as searches, registration fee, stamp duty, photocopying, postage and couriers. These costs will be charged to you.
Early Redemption Fee (Early Repayment Charge)
The charge some lenders make if a mortgage is paid off early.
Energy Rating
The energy rating is a measure of how energy efficient a home is. The higher the rating the more energy efficient the home is and the lower the fuel bills will be.
Equity
The total market value of your property less the amount of the mortgage and any other outstanding liens on the property. The property's equity increases as the debtor makes payments against the mortgage balance and/or as the property value appreciates.
Exchange of Contracts
The point where the property sale becomes legally binding.
Family Home (Statutory) Declaration
This is a sworn statement required by the Buyer’s lender and the Buyer’s solicitor. It clarifies the ownership of the house and declares whether it was used as a family home or not. In the case of marriage separation/divorce, sections of Separation/Divorce Agreement would be produced.
Gazumping
When the person selling a property cancels their agreement on an offer from one buyer in order to accept the higher price of another offer.
HomeBond
This is a service provided by the National Housing Building Guarantee Scheme through registered builders to people buying new, privately built houses and apartments. The certificate ID is called ‘HB47’ and it provides:
A guarantee against losing your deposit if the builder goes into bankruptcy or liquidation.
A 10 year Defect Warranty against major structural faults which happen within 10 years of completion.
A 2 year Defect Warranty against water and smoke damage after completion.
Insurances
There are three main types of insurances associated with a mortgage.
These are:
Life Assurance: This is compulsory if you are taking out a mortgage.
The two main types of life assurance are:
Mortgage Protection: This means the amount outstanding on your home loan will be repaid in the event of your death. The amount that is paid out reduces in line with your mortgage over the years.
Term Assurance: This is life assurance that does not reduce during the term of the loan. In the event of death the mortgage is repaid and the rest of the money goes into the estate.
Mortgage Payment Protection: This form of insurance is not compulsory. This policy will cover the repayments on your mortgage (and more if you wish) for a period of time usually up to 12 months if you cannot work because of an accident, illness or because you have been made redundant.
House Insurance: This is also compulsory if you are taking out a mortgage. This insures you against damage to your home up to and including rebuilding your home should it be destroyed.
Interest
This is the cost of borrowing money. If the interest rate was 10% per annum and you borrowed €100 for the year, the interest payable would be €10. Interest rates can be either:
Fixed: A loan where the payments are based on a constant interest rate for a set period of time.
Variable or Tracker: This means that the interest rate charged on the mortgage can go up and down over the term of the mortgage.
Interim Interest
Interest begins to accrue once you draw your loan. However, the first mortgage payment only falls due on the following month. The interest that accrues between you drawing the money and the first repayment is known as interim interest. This can be paid at the time or added to the loan.
Land Registry Fee
A fee paid to the Land Registry to update their records after you buy your home. This fee will be included in the legal costs charged by your solicitor.
Lease
A legal contract which gives the ownership of a leasehold property to the buyer for a fixed period of time.
Leaseholder
Someone who owns a property but not the land it stands on for a fixed period of time.
Lender
The bank or building society with whom you have your mortgage.
Lien
A legal hold or claim on property held as security for a debt or charge.
Loan Application Fee
This may be charged by your Broker or Lender for processing you mortgage application. These are not usually refunded if you do not go ahead with the mortgage. Some lenders will only charge such fees for specific mortgage deals and the application fees may be negotiable.
Loan to Value (LTV)
The amount you wish to borrow expressed as a percentage of the value of the property.
Market Value
The highest price which a buyer, ready, willing and able but not compelled to buy would pay and the lowest price a seller, ready, willing and able but not compelled to sell would be willing to accept.
Mortgage
A loan to buy a property. The property acts as security for the loan and so can be repossessed and sold if the mortgage repayments are not made. A lien or claim against real property is given by the buyer to the lender as security for money borrowed.
Mortgage Indemnity Bond
This is a type of insurance that covers the lender in the event that they make a loss on the sale of a repossessed property. It usually only comes into effect when the loan amount exceeds 75% of the purchase price or property value.
Mortgage Redemption
This is the amount of money owed to your Financial Institution on the remainder of the loan for the property being sold. This will usually be paid from the proceeds of the sale of your property.
Registration of Title
The title deeds are registered in the Registry of Deeds or in the Land Registry. The cost of this will be included in your outlays.
Searches
These will be carried out on the day the transaction is due to be completed. They will determine whether any judgments have been registered on the property or against the sellers. It will also indicate whether there are any planning restrictions or planning changes. The searches are carried out by a firm of law searchers under your solicitor’s instruction.
Security/Collateral
The mortgage is secured against your home. A mortgage lender is entitled to sell the house if you do not make the necessary repayments.
Stamp Duty
This is a tax paid to the government when you purchase property.
Structural Survey
A full inspection of a property to check that it is structurally sound.
Valuation
An inspection carried out by a qualified valuer for the benefit of the mortgage lender to access if the property will provide suitable security for a loan. This is not a structural survey – see above.