Legal Jargon Explained
Have you ever read your legal documents and wondered what everything means? We asked our Legal Administrator, Gina Hudson to explain it for you.
When dealing with conveyancing several acronyms and forms can be used that don’t make much sense if you don’t work in the Legal industries! Here is Part I of our guide to help you navigate the world of conveyancing.
- Remo – Remortgage
- Unencumbered – When you either pay off your current mortgage to take out another, or when you take out a mortgage on a property you already own that does not already have a mortgage. This would make your property unencumbered
- TofE ‘ Transfer of Equity’ – This is when someone’s name is being added or removed from the property without the property being sold on the open market. The best example of this is when someone either gets married or divorced and wishes to transfer the property to a new spouse or remove an ex-spouse. This can be by way of a gift and no consideration can paid or you can transfer a share of the property for a consideration
- Red Stat ‘Redemption Statement’ – This a document provided by your current mortgage lender showing how much is outstanding on the mortgage and required to be repaid on a specific date. In some cases, the redemption statement may also contain the daily interest amount so it can be used past the stated date until the expiry date of the statement
- MD ‘Mortgage Deed’ – This is a document that is signed by borrowers taking out a mortgage on a property; it states that you agree to the terms and conditions of the mortgage. Signing this document does not legally bind you to continuing with a mortgage on the day that you sign it, this happens on the day of completion when the mortgage deed is dated by the solicitor
- ERC ‘Early Redemption Charge, also known as an Early Redemption Penalty’ – This is a charge that will be owed if you redeem your current mortgage while you are still in the fixed interest term. The earlier you are into your fixed term the higher this charge will be, most people try to complete their remortgage to their new fixed term rate mortgage the day after this term expires to avoid higher payments. Alternatively, you can port your Early Redemption Charge to a new mortgage if you are purchasing a new property but would need to discuss this with a mortgage advisor.
- MOS ‘Memorandum of Sale’ – This is a document normally provided by the estate agent working on the sale of a property that outlines all the parties involved (buyer, buyers solicitor, seller and seller’s solicitor) helping to insure both sides can communicate effectively
- BTL ‘Buy to Let’ – This is a property that is being bought by someone who does not plan to live in the property but rent it out. This will need a special kind of mortgage.
Stay tuned for Part II!