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Glossary Over It

Learning the lingo - how to talk the talk when buying your first house

EA? BER? WTF? We’re here to explain it all.

BUYING YOUR FIRST home is a huge step, and a stressful one at that.

You have to work out a budget, narrow down location, research amenities, all while trying to sound the part when dealing with estate agents and lawyers.

You need to be as informed as possible, which makes it extremely frustrating when you find yourself nodding cluelessly while real-estate jargon soars over your head.

Take the first step by familiarising yourself with this lingo to make sure you’re fully informed.

1. Entry level

Let’s start off easy, with the basics. These are the nuts and bolts of what you’ll read in descriptions and chat about with the estate agents.

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  • EA: An EA is an Estate Agent. (We did say that we’d start off easy…)
  • BER Certificate: Building Energy Rating Certificate. This cert measures the energy efficiency of a property, and assigns it a grade ranging from A1 to G.
  • Equity: The difference between the current value of your property and the amount you owe on your mortgage.
  • Square Footage: While 100 square feet may sound like the foundation for a grand manor, it’s actually the size of an average storage unit. Make sure you’re familiar with size measurements, which will allow you to narrow down your options efficiently.

2. Trading up

Getting a touch more difficult now, but don’t worry, just like Clarissa – we’re here to explain it all.

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  • Freehold vs Leasehold: If you purchase a leasehold property, then you are purchasing the building but not the land that it sits on. Be sure of the difference, buying a leasehold means paying ground rent to the owner of the land (usually a local council). Purchasing a freehold property means that you are buying both the building and the land, lock, stock and barrel.
  • Fixed Rate Mortgage: With a fixed rate mortgage, you’re locked in to paying the same rates for the duration of the mortgage regardless of any differences in the housing market. The payment amounts are set in relation to the bank’s rates at the time the mortgage is set up.
  • Probate: A probate is a legal document, proving that the will of a deceased person is valid and that his/her property can now be re-distributed to their beneficiaries. I know it’s all a bit morbid but remember, you’ll need to take out life insurance too.
  • Variable Rate Mortgage: Taking out a variable mortgage means that the payments you make will fluctuate based on the market. In other words, you’ll benefit from low rates or pay extra for higher rates based on the state of the housing market. It’s the gamblers’ choice. Do you feel lucky, punk?

3. The penthouse

Top level jargon! Beware – if you start sprinkling these phrases into conversations with friends who don’t know their semi from their duplex, their eyes WILL glaze over. (And no, that’s not a subtle reference to double-glazing.)

Nocookie Nocookie

  • Amortisation: Amortisation is the process by which the amount owed on a mortgage is decreased with each payment. Each mortgage payment is split into paying off the balance of the loan and the interest owed. You can use an amortisation calculator to determine the length of time required to repay the full amount. Negative amortisation occurs when the amount owed on the mortgage increases due to not paying interest.
  • Conveyancing: Thankfully, one for your solicitor to sort out. Conveyancing includes all of the legal red-tape involved in transferring ownership of a home, including payment of stamp duty and filing records with state registries.
  • Land Registry: A state-guaranteed title that confirms you own the property. The Land Registry includes the names of the owners, details of the property and the original ordinance survey map. You all have Junior-Cert level geography so ordinance survey maps should be second nature.
  • LVR: Loan to Value Ratio is the proportion of money you borrow compared to the value of the property you are purchasing. It is calculated by measuring your initial deposit against the current market value of the property. The higher your LVR, the more of a risk you are to banks.

Congratulations! You’ve made it. After glancing over this glossary, you can now do property chat with the best of them. Here’s a gold star.

Got any other jargon-busting for us? Let us know in the comments. 

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