Jargon buster

An Agreement in Principle is a quick and easy way to gauge the amount of money a lender might be willing to lend you to purchase the property. Often you will be asked for basic information such as salaries, outgoings and any debt which you have. The Agreement in Principle is not binding on either you or the lender. In order to convert an Agreement in Principle to a mortgage offer your lender will require to run more detailed checks on you and the property.

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.

This “Council of Mortgage Lenders” CML Disclosure of Incentives form is completed by Springfield. 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.

Springfield 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.

The date of completion is when the terms of the Missives are exercised. In practice this means that you will pay the purchase price and, in return, get the keys to the property, deeds and documents relating to the property from Springfield.

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

This is the money that the lender requires the purchaser to contribute towards the cost of the property in order to be offered a mortgage. This is generally 5%, 10% or 15% of the total purchase price, but you are free to contribute more if you can.

These are costs incurred in the process of purchasing the new property (such as Land Register fees or mailing costs) which your solicitors will initially pay, but seek repayment of from you. These costs will usually be added to your final legal bill. 

A factor is a professional property manager appointed to maintain the common areas within developments (such as green spaces or play parks). 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.

In order to officially own your new property, your name(s) must be registered against the property in the Land Register of Scotland. The Register charges a compulsory fee for this service. Prices are fixed by the government and will vary depending on the purchase price of the property. 

Land & Buildings Tax (LBTT) - which replaced UK Stamp Duty - is a tax charged by the Scottish Government when you purchase a property. The rate of LBTT payable on your transaction will depend on the purchase price of the property. You can read more about it here.

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.

A Loan to Value ratio is used to show the size of the mortgage finance as a percentage of the total value of the property.

The Missives are just another name for the contract to purchase the property. The missive is sent out by Springfield (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, Springfield. 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 breaching the missives.

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.

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 that you can no longer repay.

Reservation is when your chosen plot is assigned to you and is no longer on sale. To reserve you will complete the reservation form with the help of your sales consultant and pay a £750 fee. The reservation form also contains details of our cancelation policy.

As part of the process of buying a new home, your solicitor will almost always order ‘searches’ on the property. The particular searches ordered will depend on the property and area, but some of the most common are a PEC, Coal Report and Environmental Search. The searches check the seller’s title to the property and disclose other information about the property such as whether there are previous securities over the property, planning conditions, coal mining nearby, and the conditions of roads and water facilities. The cost of obtaining Searches is met by the purchaser.

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 and may be rectified before or after the date of entry.

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.

Title deeds – Prove ownership of the property and show any conditions or rights which might benefit or restrict your use of the property. Your solicitors will complete a report on title prior to Completion. This 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.