Home Loan Borrowers Dictionary
AAPR: Is the average annual percentage rate. This is rate is the average of all the rates that are offered with a particular product. This figure will include all the fees and charges that accompany loans.
Accelerated approval: Is a fast home loan approval service that will generally cost more than regular home approval.
Accelerated repayment: A repayment plan that allows the borrower to pay off the loan faster by paying more.
Account fee: Is a charge that is applied to some mortgages that will cover the costs of opening up a loan account and maintaining the account.
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Agent: Is a person that can act on behalf of the borrower when the property is being sold, bought or managed.
All-in-one facility: An all-in-one facility is a facility that allows you to deposit all of your money onto the loan account. You can use the all-in-one facility as you regular transaction accounts.
Allotment: Allotments are smaller areas of land within a larger block.
Application fee: The application fee is a charge that is incurred at the start of a loan. The costs will pay for the set up costs of the loan.
Assets: Assets are items that you own that are worth money.
ATM: Automatic Teller Machine.
Auction: An auction is a public sale of a property where people will bid to buy.
BAD: Bank Account Debits Tax.
Body corporate: Body corporate is a charge that people who buy in a unit block will incur. It will cover the costs of maintaining the group living area.
Bond: Is money that will have to be paid by the tenant that will protect the owner against non-payment and damage to the property.
Boundary: The boundary is the line that defines the property.
Breach of contract: A beach of contact is when the conditions of the contract are not met.
Bridging finance: Bridging finance is short term finance that will allow you to buy a home while you are waiting for the money from the sale of your old home.
Building line: The building line is a line where you will not be able to build anything.
Building regulations rules: The building regulation rules control the public health and safety, the manner and safety standards of all construction.
Building society: Building societies are places that will give loans but aren’t governed by the Reserve Bank.
Capital gain: Capital gain is the increase in value of your property while you own it up until you sell it.
Capital growth: Capital growth is the increase in value of your property while you own it.
Caveat: The caveat is a warning that comes with a property purchase that will tell you about how third parties have some right or interest in the property.
Caveat emptor: A caveat emptor is a clause that describes that the buyer must be happy with what they buy.
Certificate of title: The certificate of title is a document that outlines the title of the property and it dimensions.
Chattels: Chattels are moveable possessions, such as furniture, that are included in the sale of a property.
Collateral: The collateral is an asset that will have to be given to the lender if the loan is not repaid.
Commission: Commission is the money that a mortgage broker will get for setting up a loan with a lender. This will be paid by the lender.
Common law title: The common law title is a series of documents that are called the chain of title. The title will be secure if the chains are secure.
Common property: Common property are areas in strata property that is owned by everyone.
Company title: The company title is the older form of title when all the owners are shareholders in a private company.
Comparison rate: The comparison rate is a percentage that captures the costs of similar types of loans. This rate will include some of the fees and charges that will be charged to the loan. All lenders must provide comparison rates when they advertise an interest rate.
Comparison rate schedule: The comparison rate schedule is a list of comparison rates that are ordered in how similar they are to your loan.
Contract of sale (contract): The contact of sale is a legal document that outlines all the conditions of the sale of the property.
Conveyance: Conveyance is the transfer of ownership of the property from the seller to the buyer.
Conveyancing: Conveyancing is the process of transferring of ownership of the property from the seller to the buyer.
Covenant: The covenant is the terms and conditions that relate to a particular property.
Credit union: A credit union is a lending company that is controlled by the people who use it.
Deposit: A deposit is a required upfront payment that is payable at the start of a loan. The deposit will usually be 20% of the value of the home unless agreed otherwise.
Deposit bond: The deposit bond is a payment that will ensure that the borrower will pay the deposit when it is due. You will get the money back when you pay.
Downpayment: A downpayment is the money that you will pay to the seller when you buy a property. This will ensure that you will pay the rest of the due amount.
Easement: The right of one person to use another person’s property in a particular way.
EFTPOS: Electronic Funds Transfer Point of Sale is one way that you will be able to make purchases.
Encroachment: Encroachment is when the owner of a property uses another property without consent.
Encumbrance: Encumbrance is an impediment to use the property in the form of a right of interest of the property.
Equity: Equity is the amount of money that you have available in your house after you take into account the amount you still owe on the loan.
Establishment fee: The establishment fee is a fee that is charged to establish the loan.
FID: The FID stands for financial institutions duty. This is a duty that lenders will have to pay against the money that they receive.
First Home Owner’s Grant: The first home owners grant is a grant that will give first home owners a lump sum payment.
Fitments: Fitments are furnishings such as baths and stoves that can’t be moved from the property without causing damage.
Fittings: Fittings are items such as light fittings that will not be included in the contact as they can’t be removed without causing damage to the property.
Fixed rate loan: A fixed rate loan is a loan that allows you to lock in an interest rate for a period of time.
Fixtures: Fixtures are built in items such as the kitchen cupboards.
Flat interest rate: A flat interest rate is an interest rate that is calculated from the original loan amount throughout the term of the loan.
Freestanding: A freestanding building is a building that stands apart from all others.
Gazumping: Gazumping is when a seller will accept an offer to raise the price of another offer which they will take.
GST: GST is a government tax that is charged to goods and services.
Holding Deposit: A holding deposit is a deposit that is paid to a real estate agent to hold a property.
Home Loan Consultant: A home loan consultant is a consultant that will help guide you through the application process.
Home Loan Manager: A home loan manager is someone that will organise buying a property and managing it for the life of the loan.
Honeymoon rate: A honeymoon rate is a discounted interest rate that is offered for the first period of a loan.
Interest: Interest is a charge to the loan account and is calculated as a percentage of the amount of money you owe.
Interest only loan: An interest only loan is a loan that requires you to pay only the interest. At the end of the loan term the loan will have to be paid out in full.
Internet banking: Internet banking is a way to pay all your bills and transfer money between accounts by logging on to an online account.
Joint tenants: Joint tenants are two people that buy a property in equal shares.
Land tax: A land tax is a tax that is charged to owners.
Lease: A lease is a document that gives the tenant possession of a property for the predetermined period of time.
Lender: A lender is a bank, building society, credit union or a specialised home lender that lends money for a home purchase.
Lessee: A lessee is a person that leases a property.
Lessor: A lessor is the owner to a property that is leased.
Liabilities: Liabilities are the amounts that you will have to pay people you owe money to.
Limited title: A limited title is a title where the boundaries of the property are not certain. This will usually be solved when a survey is conducted.
Line of credit: A line of credit account is a loan that allows people to draw on a credit limit as they lease, instead of getting money in a lump sum payment.
Loan-to-value ratio: The loan to value ratio is the ratio of the loan amount and the value of the property. This value will be used when calculating a deposit.
Mortgage: A mortgage is a document that outlines the terms and conditions of lending money.
Mortgage broker: A mortgage broker is a person that will help you find a loan from a panel of lenders.
Mortgage insurance: Mortgage insurance is insurance that is taken out by the lender that will protect them against any money they may loose from lending money. The borrower will usually have to pay the insurance payments.
Mortgage offset account: A mortgage offset account is an account where you will be able to deposit your savings so you will save money on interest. The funds in the account will be offset against the loan amount when interest is calculated.
Mortgagee: A mortgagee is a person or legal entity that lends money.
Mortgagor: A mortgagor is a person or legal entity that borrows money.
Old system title: The common law title is a series of documents that are called the chain of title. The title will be secure if the chains are secure.
Option (to buy): The options to buy are documents that will allow a person to buy a buy a property at a particular time. This will usually be offered to the tenants of a property.
Overcapitalising: When you overcapitalise you will be spending more money on your home than you will get when you sell the home.
Portability: A loan that is portable is a loan that can be moved to a new house if you move.
Prepayment: Prepayment is the act of paying off a loan before the due date.
Principal: The principal is the money that a lender will give you to buy a home. When you repay a loan you will be paying both the interest and principal.
Private sale: A private sale is when a person will decide to sell a house themselves and not through a real estate.
Private treaty sale: A private treaty sale is when the sale of the property is through an estate agent.
Qualified title: Is the form of title that is given to title transfers from the old system. This means that the title may not have been fully investigated.
Real property: The real property is the land without or without improvements.
Redraw: A redraw facility allows you to make additional repayments onto the loan and take them out at anytime.
Reserve Bank: The Reserve Bank of Australia is the body that is responsible for controlling the Australian financial market. They will determine when interest rates should rise and fall.
Reserve price: The reserve price is the minimum price that a seller will accept at an auction.
Right of way: The right of way is when the public have a access to the property.
Semi-detached: Semidetached buildings are buildings that are partially attached to each other.
Serviceability: The serviceability is the ability of the borrower to make the repayments.
Setback: Setback is the distance from the wall to the boundary of the property.
Settlement: The settlement of the property is when the balance of the property is paid and the ownership is transferred.
Specification: The specification is a written document that will outline all the conditions and materials that have been used in construction.
Split loan: When you split a loan you will be subjecting different parts of the one loan to different loan types.
Stamp duty: Stamp duty is a tax that will be charged by the government on most property sales.
Strata title: The strata title is a system of ownership of property based on the horizontal and vertical subdivision of air space of a building into lots with separate titles where rights of transfer, lease or mortgage are unrestricted.
Tenancy: The tenancy is the right to occupy the property.
Tenants in common: The tenants in common are when one of the tenants die and the share of the responsibility moves to the other tenant.
Term: The term of a loan is the life of a loan.
Terrace: A terrace is a row of buildings all connected together.
Torrens title: The Torrens title is the system of recording the title of property.
Town house: A town house is a strata-titled two-storey attached building.
Transfer: The transfer is a document that confirms the change of title.
Unencumbered: A property free of encumbrances, covenants and restrictions.
Valuation: A property valuation is an estimate of what the property is worth.
Variable rate loan: A variable rate home loan is a loan where the interest rate will change over time.
Vendor: The vendor is the seller of a property.
Villa: A villa is a single story attached villa.
Yield: The yield is the income a property will receive and will be expressed as a percentage.
Zoning: The zoning of a property will outline what your property will be used for.
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