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Mortgage in United Kingdom
GLOSSARY
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Checks carried out by a Solicitor or Licensed Conveyancer with local authorities and other official organisations to ensure there are no planning proposals, existing restrictions or other matters that will adversely affect the value of the property.
Second Charge
A legal charge that ranks behind a first charge. The holder of the second charge has a legal call on the property in the event of the borrower defaulting on repayments, but only after all liabilities to the holder of the first charge have been settled, e.g. a secured loan plus a mortgage. also known as a Subsequent Charge.
Second-Hand Endowment Policy (SHEP)
Endowment policies part-way through their term can sometimes be sold on the open market. Disposing of an unwanted policy in this way often produces a better price than the traditional route of early surrender. also known as Traded Endowment Policies (TEP).
Second Home
An alternative to your main residence which is subject to capital gains tax. see also holiday home.
Second Mortgage
A further loan on a property which ranks after the first charge mortgage.
Secured (loan)
A loan that is secured on the property.
Self-Build
The lender normally pays out the loan in stages to ensure that it doesn't at any stage exceed the value of the property at its current stage of building. A qualified architect will need to be involved.
Self-Build Mortgage
See Self-Build
Self Certification
A mortgage intended for borrowers who are unable to categorically prove their income by conventional means such as payslips and fully audited accounts, but can provide alternative evidence and thereby demonstrate the level borrowing is affordable. Typically the lender will charge higher rates of interest, or require a larger deposit to reflect the extra risk involved.
Self Employed
An individual working on own account as a sole trader. For mortgage purposes this will include partners in unlimited liability businesses and professional practices.
Semi Commercial
A property that has at least part commercial use. A semi-commercial mortgage is a loan on security that is not entirely used for residential purposes, e.g. A shop.
Semi-detached
A property which is joined to one other house.
Service charge
See Maintenance Charge.
Shared Equity
A scheme whereby a borrower purchases part of a property and the other part is purchased by a third party, such as a housing corporation. A shared equity scheme differs from shared ownership in that no ongoing rent is paid to the third party. However, any future increases to a property’s value results in the third party’s share of equity in the property increasing proportionately. In other words, a borrower does not fully benefit from future increases in a property’s value.
Shared Ownership
A scheme similar to shared equity. However, the third party receives a monthly rental payment from the borrower in respect of their share in a property.
Simple Valuation
This just tells you the value of the property, it does not tell you if it is structurally sound.
Sitting Tenant
A person currently renting and occupying a property, who has a tenancy agreement with the current owner, and who is legally protected against being removed. Most buyers will want vacant possession, which means that properties with sitting tenants are generally worth at least 30% - 40% less than their open market value with vacant possession and few mortgage lenders will lend on property without vacant possession.
Sold subject to contract<
Sold 'Subject to Contract' (STC or SSTC) means that the homeowner has accepted an offer from a buyer but the paperwork is not yet complete.
Sole Agent (Sole Agency)
When a seller chooses only one estate agent to sell their property. This does not affect the owner's right to sell privately.
Sole Occupancy
A property that is occupied (lived in) by only the mortgage applicant(s) and their direct family. No paying tenants are in residence.
Sole-selling rights
Where one agent has complete control of the sale, and is entitled to his fee however the property is sold.
Solicitor
Legal expert handling all documentation for the sale or purchase of a property.
Special Conditions
Specific terms, usually outlined on the mortgage offer document, that apply to a particular loan offer.
Stamp duty
A government tax payable on property purchase by the buyer. Currently based on the following rates:
exempt: if the purchase price of the property is under £120 000*
1% of the purchase price on any sales exceeding £120 000 and under £250 000.
3% of the purchase price on any sales exceeding £250 000 and under £500 000.
4% if the purchase price on any sales exceeding £500 000.
*This does not apply if the purchase is part of a larger transaction or series of transactions.
Disadvantaged Areas Stamp Duty Exemption may apply for properties within the Government's designated wards. For more information please go to www.inlandrevenue.gov.uk/so
Standard Construction
A building that has been constructed using conventional techniques and materials, for instance bricks and stone with a tiled or slate roof.
Standard Variable Rate (SVR)
A mortgage lender's main interest rate, which is subject to increasing or decreasing at the discretion of the lender
Start-up Business
Any business that does not have accounts dating back three years.
Status - ability to prove income
If you are able to prove your income with pay slips/P60 then you are able to take a 'Status' mortgage. See "Non-Status Loan".
Stepped Rate Mortgage
A mortgage where the interest rate charged rises in stages over time.
Structural Survey
The most comprehensive form of detailed inspection of the condition of a property, undertaken by a qualified chartered surveyor, and for which the surveyor is responsible. A structural survey is the most detailed and most expensive of the property reports available. A structural survey report will normally provide a full and detailed description of the structure, list all the defects and alert the recipient if a specialist report is required covering drainage, damp or subsidence. Also known as a "Building Survey." A structural engineer's report is a different type of survey carried out by a chartered building engineer and should not be confused with a structural survey.
Studio Flat
A flat consisting of one main room or open-plan living area incorporating cooking and sleeping facilities and sometimes a separate bathroom/shower room.
Subject to Contract
Status of an agreement is not yet legally binding.
Surrender
The encashment of an investment vehicle, such as a mortgage-linked endowment policy. Doing this often produces a poor return for the money invested to date in the policy's early years.
Survey
Inspection of the property by an independent surveyor, aimed at discovering any structural flaws or repairs needed or the property forms a good security for a loan. Available in three types: Valuation, Home Buyers and Structural.
Survey Fee
The fee payable to a surveyor for surveying a property.
Surveyor
Professionally-qualified expert who carries out the survey to estimate the value of land and property.
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