Return to Homepage Step-by-Step Mortgage Guide First Time Buyers Guide Investor Guide Tax Guide F.A.Q’s Jargon Buster Mortgage Repayments Protection Worried about meeting your repayments, due to illness or redundancy? Call OBG Mortgage Services on +353 71 9194194 or email us Jargon Buster Advance This is the entire amount of the money lent to you to pay for the purchase of your house Annuity Mortgage This is a straightforward type of mortgage. Every month, over a set number of years you pay back part of the money you’ve borrowed along with the interest. When you make your final repayment, your mortgage is repaid and your home is yours. Annual Percentage Rate (APR) This can help you to compare the cost of different mortgages. It calculates the total interest to be paid over the whole term and includes any charges to be paid as well as the main interest rate. Arrears This is the payment(s) due when a mortgage payment is not made by the due date. Please remember that your house could be repossessed if you fail to keep up your repayments. Buildings Insurance This is an insurance policy to pay the costs of rebuilding of your home in the event of fire, flood, storms, etc. You must have buildings insurance in place when taking out a mortgage. Capital This is also known as Principal – the original amount of money borrowed. Closing This is the meeting between your solicitor and the seller’s solicitor where the actual purchase of the property takes place. Your solicitor received the title documents to the property from the seller’s solicitor and pays the remaining purchase money. The sale has “closed”. Conveyance The legal work involved in buying or selling a house. Cost per Thousand This is the cost of your mortgage repayments for each thousand euro borrowed. It is calculated based on the bank’s standard interest rate and the term of the mortgage. Debt Consolidation This means taking all your existing loans, such as car loans and personal loans and pooling them into one larger but easier to manage loan, repaid over the term of your choice. This option will only be available in certain circumstances. Drawdown After the exchange of contracts, the bank “draws down” the loan money and sends it to your solicitor which then enables him/her to purchase the property on your behalf. Equity This is the difference between what your home is worth and the amount you owe on your mortgage. For example, if your home’s market value is €250,000 and you owe €200,000 on your mortgage, then you have €50,000 equity. Equity Release This is when you increase your mortgage to release equity. European Base Rate This is the rate set by the European Central Bank (ECB) at which European Financial Institutions buy money. If the base rate rises, then usually the rate if interest charged on a loan will rise as well. If the base rate falls, so will the rate on the loan European Central Bank The European Central Bank (ECB) is the central bank for the euro. The ECB’s main task is to maintain the euro’s purchasing power and thus price stability in the euro area. Exchange of Contracts After you make your offer to purchase the property you have to sign two copies of a formal legal contract and pay a non-refundable deposit – usually 10% of the purchase price. If the seller is happy to proceed with the sale, he will also sign the legal contracts and send one back to your solicitor. This is the actual exchange of contracts and at this point you are committed to buying the property. Your solicitor will guide you through this part of the process. First Time Buyer This is a person who has not previously bought or built a house anywhere in the world, including Ireland, and who is purchasing the property as their principal place of residence. Fixed Interest Rate This is an interest rate set for an agreed period. At the end of this period, the rate converts to a variable interest rate. This type of interest rate means that you know for certain what your repayments will be for the fixed interest period, helping you to plan your finances. Freehold This is a form of legal ownership of property. It is absolute outright ownership. Guarantor This is a person other than the borrower who agrees to pay (guarantees) the mortgage repayments in the event of you being unable to. Home Bond This is a guarantee scheme available on many new houses and apartments. It ensures good building standards and guarantees to pay a certain amount for the repair of any structural defects that might appear within 10 years on construction. Indemnity Bond Some lenders, particularly when dealing with residential investment property purchase will charge a client a once off indemnity bond fee when the loan amount sought is more than 75% of the purchase price or value of the property. The purpose of the bond is to insure the lender against a potential loss in the event that they could lose monies following the repossession of the property, following defaulting loan repayments. In some instances your lender will pay this fee on your behalf. Interest-Only Mortgage With an interest-only mortgage, your monthly repayments only repay the interest charged on the loan. The original amount of the loan will have to be repaid on or before the end of the mortgage term. Land Registry The Land Registry is the State institution responsible for maintaining and updating the register of all properties in Ireland with registered titles. Your solicitor registers you (the buyer) as the new owner of the property with this institution. Leasehold A leasehold title is a right of possession, but not ownership, of a property under the terms of a Lease, with the payment of rent for an agreed period of time. Letter of Offer When your mortgage application is approved, you will be sent a formal Letter of Offer or Loan Offer that sets out the conditions of your loan. Your solicitor will also receive a copy of the Letter of Offer. Loan to Value This expresses your mortgage as a percentage of the value of your property. Owner-Occupier A term used to describe a person who owns and lives in their own property, which is their sole or main residence. Planning Permission If you are going to build a property you will need planning permission from your local authority before you start building Premium The amount you pay for an insurance policy which is usually paid monthly Redemption When you pay off a mortgage in full, including interest to date and all charges Registry of Deeds This is the first statutory system of registering the ownership of land and other interests, such as mortgages and was founded under the Registry of Deeds Act, 1707. It is similar to the Land Registry, but it registers deeds, not land, and cannot be accessed electronically. Both systems operate in Ireland to register property ownership and charges affecting property such as mortgages and rights of way. Re-mortgage This is the process of switching your mortgage from one lender to another, often for a more competitive rate. The new mortgage is used to pay the existing lender and at the same time you can also raise new funds for other purposes. Searches A solicitor carries out searches on the property to establish if the seller has a legal right to sell the property and to determine whether there is anything that might affect the title of the property. Searches will also be carried out against you to confirm that there is no reason why you could not enter into a mortgage. Security Your property is pledged to secure your mortgage therefore it can be referred to as “security” for a mortgage. Snag List It is highly recommended if you are buying a new home that you arrange for a qualified person to check if there are any defects that need to be fixed before the sale is complete. This “snag list” is then given to the builder. Stamp Duty This is a Government duty placed on the market value of a property. Please view our Tax Guide for further information. Structural Survey This is a survey carried out by a qualified surveyor to confirm the structural soundness of a property. The surveyor will produce a report determining whether a property is structurally sound and list any major and minor defects. This report is highly recommended and is particularly useful if you are buying a second hand property. Tax Relief at Source (TRS) This means that your mortgage interest rate tax relief is granted at source, i.e. by your lender. The tax relief on your mortgage interest is built into your monthly repayment making it lower. Please view our Tax Guide for further information. Term This is the length of time for which a mortgage loan is taken out. Title This is the legal ownership of a property. Title Deeds These are the chain of legal documents showing who owns a property. They also contain other information such as planning permissions affecting the property and certificates confirming that all taxes payable on the property have been paid in full. Tracker Rate This is a variable interest rate that tracks the European Base Rate with a margin that is fixed for the full term of the loan. Underwriting This is the process of analysing a mortgage application to determine the amount of risk involved. It includes a review of the potential borrower’s credit history and a judgment of the property value. It also sets suitable loan terms and conditions. Valuation This is carried out by a valuer who will assess the value of the property you wish to purchase to make sure that it is worth at least its asking price for mortgage purposes. Variable Interest Rate This is an interest rate that will rise or fall during the life of a mortgage. Mortgages 999 Poor credit history? Self employed with no accounts? Call Mortages 999 on 1890 777 999 or email us