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| Term | Description |
|---|---|
| Acceptable Referree | Referee Includes accountants, Solicitors, magistrate, Doctor & Justice of the Peace |
| Acceptance | To agree to the terms and conditions of an offer or contract |
| Additional Repayment | Extra funds paid into the loan over and above the minimum prescribed payments |
| Allotment | The area of land that is subdivided into smaller portions of land |
| Amortisation | To pay off principal and interest under a loan over a period of time, usually by instalments. |
| Application Fee | The fee that is charged by a lender when you lodge a loan application |
| Appreciation | When the value of the property increases from its original value |
| Body Corporate Levy | The fee paid to a Body Corporate to cover various administrative cost relating to the common property |
| Bridging Finance | A shorter term loan that is taken out to purchase a new property before selling your existing property |
| Break Cost | Relates to fixed rate loans where the borrower terminates the loan contract before the expiry of the fixed rate period |
| Capital Gain | The amount by which proceeds from the sale of property exceeds the original purchase price. |
| Certificate of Title | This document details the land dimensions and ownership details, and whether there are any encumbrances. |
| Certificate of Currency | A certificate issued by an Insurance Company showing that a building is insured |
| Company Title | The title where the unit holders are Shareholders in a private company |
| Comparison Rates | A comparison rate is a tool to help consumers identify the true cost of a loan. It is a rate which includes both the interest rate and the ascertainable fees and charges relating to a loan, reduced to a single percentage figure. |
| Contract of Sale | A written agreement outlining the terms and conditions for the purchase or sale of property. |
| Default | Failure to meet repayment on due date |
| Depreciation | A non cash expense that reduces the value of an asset as a result of wear and tear, age or obsolescence |
| Drawdown | Debiting of loan funds at settlement |
| Deferred Establishment Fee | Fee imposed by some lenders where the borrower has sought to discharge within the first few years of the loan |
| Equity | The difference between what you owe and what your property is currently worth |
| Fixed Interest Rate | An interest rate that allows you to lock it in for a set time period and does not fluctuate during that period. |
| Formal Approval | Is when the lender formally approves your loan application and prepares a letter of offer. |
| Gross Income | Total income before tax |
| LOC | An LOC is a revolving line of credit secured by your house. This allows you to use the funds for any purpose such as the purchase of a second property, or shares or other investments. The interest rate is generally higher than a standard variable rate. |
| Honeymoon Rate | The rate is generally variable for the first 12 months of the loan. At the end of the term the loan reverts to the standard variable rate. The rate applied to the Honeymoon period (Introductory Loans) is usually set at a discount below the Standard Variable Rate. |
| Interest Only | Loan up to a ten year term arrangement whereby payments are made on the interest only, not the principal. |
| Joint Tenants | The holding of property by two or more people in equal shares. |
| Loan to Valuation Ratio (LVR) | Refers to the percentage of the home loan against the value of the proposed security. |
| Mortgage Insurance | Lenders may provide up to 100% of the value of the security for a loan if you agree to take out mortgage insurance (LMI). This figure is a one off payment usually made at the time of settlement. This payment allows the lender to recoup the unpaid principal in the event of default and the borrowers debt is transferred to the Mortgage Insurer. |
| Redraw Offset Account | An offset account is a separate account where the balance is offset daily against the loan amount.For example, if you have $5,000 in your offset account, 'notiational' interest is earned on these funds, at the same interest as your linked loan. This 'notional' interest is offset against the interest payable on the loan. |
| Mortgagee | The lender who lends the money |
| Mortgagor | An entity which has borrowed money and pledge their asset as security |
| Net Income | Gross income less tax |
| Portable Loans | A portable loan allows you to sell your house and move to a new one without having to refinance. The main benefits of portability apart from not having to refinance is utilisation of stamp duty and not having to pay break costs if you are on a fixed rate. Most lenders however insist that the loan amount is the same or less. Make sure you know the terms of your loan. |
| Pre Approval | When a lender advises you in writing how much they will lend you, subject to lending terms and conditions |
| Principal & Interest Loans | A loan in which both the principal and interest are paid during the term of the loan. |
| Settlement | Is the completion of the sale transaction. Final payments are made at settlement in exchange for the relevant documents. The purchaser can then take ownership of the property. |
| Stamp Duty | Stamp duty is a state government tax which is calculated on the sale price of the property. Stamp duty is also payable on mortgage documents and is calculated on the amount borrowed. |
| Strata Title | Title that is commonly used for units, which forms part of an owners/ strata corporation. |
| Switching Fee | The lender may impose a switching fee where an existing borrower wishes to change from one loan type to another e.g. Variable Rate Loan to Fixed Rate Loan |
| Tenants in Common | The holding of property by 2 or more people in equal or unequal shares |
| Torrens Title | A system of title where a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register |
| Transfer | A document registered in the Land Titles Office recording the change of ownership. |
| UCCC | The Uniform Consumer Credit Code Legislation - a Federal act of Parliament to ensure uniformity amongst all credit providers. E.g. all loan contracts must now adhere to a uniform format as specified by the act. It must set out all fees / charges that the borrower (and, if required, guarantor) are liable for under the loan contract. |
| Valuation | A report as required by the lender detailing a professional opinion of the property's value. |
| Valuation fee | Fee which may be charged if the lender seeks to cover the cost of valuing the property taken as security for the loan. |
* Terms conditions & lending criteria applies. Full details of terms & conditions available upon application