Completion date - This is the date of legal transfer of ownership of the property to the purchaser, in the case of a re-mortgage it is the date that the new lender takes over the mortgage and replaces the original lender with a legal charge on the property. The completion date is normally agreed between seller and purchaser at exchange of contracts.

Exchange of contracts - This is where legally binding contracts are signed and exchanged between seller and purchaser. On exchange of contracts the vendor (seller) is legally obliged to sell and the purchaser to buy based on the terms agreed.

Flexible mortgage - This is where you have a mortgage facility agreed up to a specific amount or % value of your property and you can increase or reduce the monthly payments or even have a payment holiday to suit the borrowers specific circumstances. The flexibility means that a borrower can pay higher payments or pay off lump sums ,thereby reducing the term of the mortgage. Also this type of loan normally carries a cheque book facility where additional funds up to the facility level may be drawn. This facility could be used to finance alternative purchases such as a car or be used to pay off creditcards etc. The advantage being that as the loan is secured against the borrowers property the interest rate will normally be lower than that offered by hire purchase or creditcard borrowing. In addition the interest on this type of loan is normally calculated on a daily basis.

Freehold - A freehold property is where the property and the land it stands in is owned by the borrower.

Leasehold - A leasehold is where the property is owned for a limited time and then ownership passes back to the freeholder. For example a property with a 99 year lease means that the property is owned for 99 years. Generally freeholds apply to houses and leaseholds apply to flats. The shorter the lease the less the value of the property and in some cases for example where a lease has less than 50 years to run many lenders will not offer a mortgage on the property. It is therefore most important that you find out the length of a lease when purchasing a leasehold property. If you find a property that has a shorter lease than is desired, it may be possible to extend the term of the lease for an additional payment to the freeholder. Your solicitor / conveyancer will deal with the legal work involved.

Loan to value - The loan to value is the amount of loan compared to the value/purchase price of the property. For example where the borrower puts down £10,000 deposit on a £100,000 property the loan to value is 90%.Generally the greater the deposit or equity on the property the lower the interest rate may be secured from the lender.

Disclaimer: Information is for guidance purposes only. If you are in any doubt as to the suitability of the contracts offered please consult an independent financial adviser. PIA do not regulate mortgage protection and not all forms of critical illness insurance and income protection products.