When buying a property, even just a couple of words in the bank can help improve your property buying experience. Here\’s a quick list.
Do you have a dream of owning a property but don’t know how to go about it? Maybe you’ve already started planning. Maybe you’ve already started saving. Whatever stage you’re at having a sound knowledge of the vocabulary involved will save you from any mix-ups or embarrassment. It can be hard understanding new information especially when it’s all facts and figures spoken in jargon. Even just a couple of words in the bank can help improve your understanding about the world of property buying. Here’s a quick list of what’s what so you know what you’re talking about.
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APR (Annual percentage rate)
This will be a number that represents how much interest you will be paying on any money that you have loaned or borrowed.
A deposit is a sum of money usually a small percentage of the total house price. It acts as the first installment of your payments.
A mortgage is a form of loan specific to gaining ownership of a property i.e. Buying a home. This will most likely be a long term loan usually taken out over twenty-five to thirty years. The loan can be obtained from either the bank, a building society or any lender willing to take on the title of the property whilst you pay back the debt. There are many options you can take when choosing a mortgage and a lot of people seek out the help of a financial adviser to do so. They are like the ‘compare the market’ search engines of the property world. Fixed mortgage, interest-only mortgage, first time buyer mortgage, the list goes on and you’ll be able to find out what works best for you when you start taking your first steps to buying.
This will be the documents showing who legally owns the property.
Shared equity is an option you can opt for when choosing a mortgage. This means that you can split the bill in a way. You would share the debt of the property with another lender until you are able to buy back your share. If you sell the property before then they will also share the profits.
This is essentially a place where you can purchase property. It offers an opportunity for more than one buyer to bid on the price of the property. The sale in most cases going to the highest bidder. However sometimes there are closed auctions where you can secretly bid how much you want to pay and the property owner can then decide who they wish to sell to.
This is the amount of money you will be willing to pay for the property.
This will be a set fee paid to a company and in return they will guarantee you compensation should your home be subject to varying degrees of specified damage. On some occasions you may not need to pay so always double check but for properties unfortunately it will always be needed.
As you can see, there are a lot of terms being thrown around and it’s easy to fall victim to ignorance. These are just a few but the more you know the better equipped you will be in finding the best deal out there.
This is a contributed post.
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