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– Definitions for the Irish home buyer or seller.
The Complete List of Irish Conveyancing Terms
An abbreviation for Annual Percentage Rate. The APR is the actual cost of your credit taking into account the costs associated with the loan.
An old common law term meaning: Let the buyer beware. Although there are statutory protections in place with implied conditions and certain warranties, it is most prudent to heed the warning and ask as many questions as possible.
Means “Security”. You give the Lender the Title Deeds to your property as security for the loan.
Closing is when you pay the balance of the purchase money and you get the keys. We arrange for you to sign the necessary documents and finalise the matter on your behalf.
Contracts are documents setting out details of the transaction. The contract is drafted by the seller’s solicitor.
Conveyancing is the legal procedure by which ownership of property and land is transferred. This is usually done by a solicitor.
This is the money needed to secure the property. It is usually paid in two parts, ie, A booking deposit and later, a contract deposit.
Legal documents confirming the owner’s legal interest in the property.
Paid out on your behalf by the Solicitor. Disbursements include searches, registration fees, postage, photocopying, and courier’s fees.
Exchange of Contracts:
When the deposit has been paid, both the purchaser and the vendor sign the contract. Now, both parties are legally bound by the transaction.
an interest in land, usually a fee simple. A party whose ownership in the land is absolute has a fee simple.
Annual rent due on a leasehold title. This can usually be ‘bought out’ for a fee.
Family Home Declaration :
A Family Home Declaration is a sworn statement declaring the use of the house as a family home – or not.
Home Bond :
This is provided by the National Housing Building Guarantee Scheme and provides a guarantee that prevents one from losing one’s deposit if the builder goes through bankruptcy or liquidation. It is a warranty: 1) for defects against major structural flaws that occur within 10 years of completion; and 2) against water damage and smoke damage up to 2 years following completion of the building.
This is an insurance bond taken out by the lender as additional security.
Interest is the cost of borrowing funds. Interest rates can be fixed (for a specified period of time); or variable, often referred to as “Tracker” because they track a particular index. The interest rate on a variable loan can fluctuate up or down depending on the circumstances and the “Powers That Be”.
This is a Government Department, which keeps records of most real property in the State.
Land Registry Fee :
This fee is paid to the Land Registry to enter your property’s information in their records.
The ownership interest created by a lease. With this interest you have a right to use and occupy the property but you do not own the fee simple.
Lessee: The person who is leasing the property.
Lessor: The person who grants the lease – usually the owner.
Loan application Fee :
A Loan Application Fee is a fee that may be charged to you by your Broker. The more reputable Brokers will only receive a fee from the Lender.
Loan to Value (LTV) :
This is most easily described as a fraction and expressed as a percentage. The numerator is the loan amount and the denominator is the value of the property.
Mortgage: A loan secured by a property.
Mortgagee: The financial institution that lends the money.
Mortgagor: The person borrowing the money.
Mortgage Indemnity Bond :
This is further insurance protecting the lender against loss on a sale of repossessed property when the loan exceeds 75% of the purchase price.
Life Assurance cover provided to protect the Lender in case of your death prior to paying off the loan.
Mortgage Redemption :
Mortgage Redemption is the amount of money still owed on your loan when your property is being sold. This is usually paid from the sale proceeds of your property.
Principle: The amount of money borrowed from the financial institution. Interest is calculated on the principle.
Registration of Title:
The title deeds are registered in the Registry of Deeds; or in the Land Registry.
Registry of Deeds:
Similar to the Land Registry except the properties are unregistered.
A legal investigation to establish what, if any, mortgages or judgments attach to the property being bought. It will also provide judgment information regarding the seller.
Stamp Duty :
Simply stated, this is a government tax that is paid when you purchase property. It is based on a sliding scale based on the value of the property. First-Time Buyers are no longer subject to this tax.
Structural Survey :
This is an inspection of the property to ascertain its structural soundness.
Subject to Contract:
This means that no legally binding agreement or contract exists until the contract has been executed by the parties. For added protection, solicitors very often state in their correspondence: “subject to contract, contract denied.”
Private Treaty Contract:
A Contract that is negotiated privately and is not the product of an auction.
A valuation is an inspection carried out on behalf of the Lender to determine the property’s value.
Home Buying Checklist – Making sure all your proverbial ducks are in a row during your home purchase.
Buying A Home Checklist
Remember, buying a house is probably the biggest and most important financial decision you may make in your lifetime. So, before you sign any contracts to buy a house, there are many details that must be considered and carefully planned. There are two basic ways of purchasing a house, 1) by private treaty, and 2) at auction. Whether you plan to purchase a house by private treaty or at an auction, the following matters need to be attended to prior to purchase.
• Be realistic. Don’t just look at the positive aspects of owning a house. Remember, when you borrow money, you must have the ability to make the monthly payments. So, take off the ‘rose coloured glasses’ and consider your entire financial situation.
• Ask yourself the question: can I afford to make the monthly payments? When doing your calculations consider all the outgoings for you and your family. As a general rule of thumb, your monthly mortgage payment should not exceed one third of your monthly income. Also remember, if you take out an adjustable rate loan, the sad fact of the situation is that these rates tend to go up – not down, and that means your monthly repayment may go up.
• Plan financing to cover all possible expenses associated with the purchase. These expenses will include the purchase price of the house, stamp duty, legal fees and costs, Surveyor’s costs, building insurance, and mortgage costs. If you have borrowed money from family or friends to help with the purchase, make sure you can afford to repay the loans. These days it is not unusual for parents to make gifts to their children to help with the purchase.
• Before making any offers, Make sure you have enough cash to complete the purchase. Get pre-qualified with a bank or other financial institution for the amount you need.
• Ask questions of all parties concerned, most especially, the Seller.
• Have a Surveyor inspect the property to determine the property’s condition. The Surveyor should also ensure that there are no problems with the boundaries. Make sure that the property is serviced by the Local Authority and check that there are no outstanding problems with planning permission requirements.
• Make certain that you and the seller fully understand exactly what will be included in the purchase, i.e., chandeliers, curtains etc. Also ensure that the contract accurately enumerates and describes those items included in the sale.
This checklist is merely a brief outline of what you need to do. Contact a Solicitor to assist you.
“Do I need a Solicitor? As far as this office is concerned, the answer is a resounding YES! Remember, you are talking about committing yourself to a loan for hundreds of thousands (maybe even millions, these days) of Euro. The legal costs, in relation to the value of the house, are minimal and a Solicitor can help you through any pitfalls. Obviously, we would prefer if you used the services of this office, but if not, please utilize the services of a competent Solicitor to help you. Good Luck!
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