New to mortgage and insurance jargon and terms??
No need to panic..
We have put together a handy , easy-to-use glossary.
Get to grips with all the terms and definitions you are likely to encounter along the way.
So, from your APR’s to your LTV’S you will be completely up to speed.
Accelerated Serious Illness Cover
Most life cover only pays out on the death of the person insured. However, if the policy includes accelerated specified illness cover, some or all of the life cover amount will be paid out early if the person covered is diagnosed as having one of a number of specified medical conditions, as defined in the policy. The life cover benefit is then reduced by the amount paid out.
A loan of money, the mortgage.
Annual Percentage Rate (APR)
The total amount charged for the loan including fees and interest expressed as a percentage.
Mortgage payments which have not been paid on time.
A public sale in which property is sold to the highest bidder.
A loan given by a lender secured against an existing property to allow a purchaser buy a property, and borrow against their own home.
An insurance policy to cover your home in the event of fire. (A letter of indemnity will be required by your lender to confirm this is in place In order to clear their loan before payment of any claim)
The amount you owe excluding costs and interest outstanding.
Central Bank of Ireland
The Central Bank is the financial services regulator of Ireland.
Security for repayment of debt. The property, which the lender can sell to repay the loan if the borrower does not keep up the mortgage payments.
1. The final legal transfer of ownership of the property – when the property becomes yours. 2. The start of the mortgage (also known as ‘drawdown’).
Cover for all the items in your home including furniture, fixtures, fittings and personal items.
A written agreement, which will decide ownership of the property between the vendor (seller) and the purchaser (buyer).
What your solicitor does, legal work involved in the sale and purchase of land.
A document, which decides the legal ownership of a property.
Two deposits may be payable: 1.A booking deposit (this is refundable) the amount paid to secure your property. You normally have 21 days after paying this deposit before signing the contract.
Dual Life Cover
A dual life policy refers to a policy where benefits will be paid out on the death of each of the insured individuals.
European Central Bank. The bank who decide what rate which will be applied to interbank lending, this is the rate which directly effects the rate of your loan.
The difference between the value of the property and the amount of any loan secured against it.
Work required to be carried out on the property, this may appear in your valuers report.
Outright ownership of the property and the land on which it stands.
Management of money invested, typically, in stocks and shares, fixed interest, property and cash on behalf of individual and institutional customers. Also known as asset management or investment management.
An additional loan by the lender to the borrower, which may be for any purpose and secured by the existing or a second mortgage deed.
When an offer, having already been accepted by an auctioneer or a vendor but before contracts are exchanged, accepts another, higher offer from someone else.
An annual charge payable by leaseholders to the landlord.
A person who promises they will pay the borrower’s debt.
A certificate issued by the National Home Builders Guarantee Scheme Ltd
Help to Buy incentive
Government scheme introduced in 2017 Budget to assist first-time buyers in purchasing a new build property. Those FTB’S purchasing/ building a new property between 19th July 2016 and 31st December 2019 may be entitled to claim a refund on income tax and DIRT paid over the previous 4 years. You may claim up to a maximum 5% on the purchase price, up to a value of €400,000.
This scheme was established by the Construction Industry Federation and the Irish Home Builders Association, in conjunction with the Department of the Environment. It ensures that proper building standards are maintained and protects purchasers by underwriting any major structural defects. Homebond provides a ten-year warranty for structural defects to new properties built by registered builders. Under the scheme builders and developers register properties with Homebond and pay a fee for each of them. The buildings are inspected by Department officials during construction and when everything is completed satisfactorily, a certificate is issued. This certificate more or less guarantees the property for up to ten years against major structural faults. Should a fault or defect occur, the builder or developer is responsible for rectifying it. Homebond has a complaints scheme for non-structural defects in new houses, arising within a year of buying the house with effect from 1 January 2001. Non-structural defects covered under the scheme include leaky plumbing, uneven flooring, breaches of fire requirements such as smoke alarms and lack of insulation. The register of builders is available in local libraries, building societies and local authorities. Buyers should check that their particular builder or developer is registered. If a problem arises, the buyer must notify the builder in writing. If the builder fails to rectify the problem, Homebond will mediate and possibly refer the issue to arbitration.
An insurance policy taken out by the lender when they lend above a certain percentage of the property value, whish they make a claim against when they loose money having repossessed a property.
Any payment due for the period from the day the mortgage began up to the first repayment date.
Interest Only Mortgage
A mortgage where only interest is paid during the mortgage term. The capital is repaid at the end of the term.
Irish Credit Bureau
A credit referency agency that maintains a database of an individuals credit history. Under the data protection act everyone is entitled to obtain a copy of the information they hold. more here – www.ifha.ie
Joint Life 1st Death
A joint life first death policy is a policy where the death benefit will be paid only in the event of the death of the first of the individuals insured under the policy. The policy usually ceases when the benefit has been paid on the first death. This is different from a dual life policy where the benefit is paid on the death of each of the insured individuals
Land Registry Certificate
Provides details of the property including a plan and, if the property is leasehold, a copy of the lease.
Land Registry Fee
A fee paid to the Land Registry to register ownership of a property.
The right to possession, but not ownership, of a property for an agreed period of time. Ultimate ownership remains with the freeholder.
The bank/building society where you have your mortgage.
An assurance policy that pays a lump sum on death. This is a requirement under Irish law although most lenders have expanded on this law and insist that in the case of joint borrowers a policy must be taken out by both people.
Loan to Income (LTI)
The ratio allowed between an individuals gross annual income and the loan amount.
Current Central Bank guidelines specify an LTI borrowing limit of 3.5 times gross annual income.
Loan to Value (LTV)
The size of a mortgage as a percentage of the value of the property or its purchase price.
Has a specific meaning in law but has come to mean a loan with property as security.
A policy designed to pay the balance of your mortgage if you die.
The period over which the mortgage loan is to be repaid.
NDI (Net Disposable Income)
NDI refers to the amount of income an individual has to spend or save once all direct taxes have been deducted . NDI guidelines vary between lenders.
When the value of the property has fallen and is less than the loan secured on it.
Insurance which pays your monthly mortgage payments, usually for a specified period, if you lose your income through sickness, injury or unemployment, business failure.
An investment plan, which can provide a lump sum on, and an income after retirement.
The amount of the loan on which interest is calculated.
Repaying one mortgage by taking out another secured on the same property, possibly to take advantage of a particular mortgage product or better interest rate from a different lender.
The amount due to be paid each month on your mortgage.
A process carried out by your solicitor to confirm the title of the property is devoid of any judgement, liens or other conditions, which might affect you obtaining good title to the property.
A report required by the lender into particular defects discovered at the property to be purchased, such as dry or wet rot, damp, etc, before they will agree the mortgage.
A government tax payable on exchange of contracts on properties of a certain value.
A full inspection of the property by a surveyor on behalf of and paid for by the buyer. This should not be confused with a valuation report.
Subject to Contract
The phrase used before exchange of contracts, which allows either party to withdraw without incurring a penalty.
A simple form of life assurance that a person takes out for a set period of time (for example, 10, 20 or 25 years) and guarantees to pay out a specified sum if the person dies during that period of time.
Title Deeds/ Title Documents
The legal documents, which provide proof of ownership of a property.
A form which provides details of the transfer of ownership to be entered on the Land Registry register.
An inspection carried out by a valuer (paid for by the borrower) on the property to be mortgaged, for the purposes of confirming the market value of the property and while it may point out some defects should not be relied upon to confirm the property is structurally sound.
A person appointed by the lender to carry out a valuation.
The person(s), (including developers) you are buying your new home or investment property from.
Whole of Life Cover
This means that the life cover policy is not limited to a specific time period