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A B C D E F G H I J L M N O P R S T U V W X Y Z
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AAPR
The Average Annual Percentage Rate (AAPR) also known as the comparison rate combines the establishment, ongoing fees with the interest rate to come up with a total cost interest rate.
Accelerated Payment
The option to make additional repayments to pay off your home loan quicker.
Acceptance
To confirm and agree to terms and conditions of an agreement or contract.
Account Keeping Fees
Generally a monthly or annual fee charged by the lender to cover loan administration costs.
Accrued Interest
Interest that is payable but charged at the end of each month (period can vary).
Additional Repayments
Extra funds paid into your loan, above and beyond the minimum repayment amount. By making additional repayments you are effectively reducing the term of the loan and saving interest.
Agent
An Agent is a representative who acts on the behalf of another person or organisation e.g. a real estate agent acts on behalf of a property owner who requests to sell his/her property.
Allotment
When a larger block of land is subdivided and made into smaller individual parcels of land.
Amortisation
The repayment of a mortgage through principal & Interest instalments.
Amortisation Period
The amount of time you have to pay off your home loan in full.
Application Fee
An upfront cost (also known as the establishment fee) charged by the lender to setup your mortgage.
Appraised Value
Real estate agent opinion on estimated value of a property.
ARM (A_R_M)
Another term for a Variable Rate Home Loan (Adjustable Rate Mortgage).
Arrears
An overdue payment that is outstanding or has yet to be paid in full.
Assets
Personal possessions of value, including cash, real estate, vehicles and investments.
ASIC
The Australian Securities and Investment Commission is an independent Commonwealth Government body that ensures that Australia’s financial markets are fair and transparent, supported by confident and informed investors and consumers.
Basis Point
Generally one hundredth of a percentage point (0.01 per cent) which is used in quoting interest rate movements.
Balance Sheet
Is a statement of financial position which contains the assets, liabilities and net equity (net worth) of an individual, company or other legal entity.
Balloon Payment
Generally associated with a lease agreement, a balloon payment is the large final repayment required at the end of the loan term.
Bank Lien
The bank having the right to hold a customer’s property as security until the mortgage is paid in full and discharged.
Body Corporate
A body corporate provides a legal framework in which unit owners or occupiers can enjoy common property together. Common property may include driveways, paths, stairs, passages, lifts, lobbies, common garden areas and other facilities set up for the use by all property owners and occupiers of the units.
Borrower
A "legal entity" being a person or structure that obtains funds from a lender for a particular purpose and period of time.
Boundary
A line that separates adjoining properties.
Breach of Contract
Breaking the terms and or conditions of an agreement and or contract.
Break Costs
A charge that is payable when paying out a fixed rate loan before the fixed rate period ends or expires.
Bridging Finance
A short term loan facility, (higher interest rates generally apply) used by people who have bought a house while waiting for theirs to be sold, or when a normal mortgage and their savings fall below the asking price.
Broker
Trained professionals with a wealth of knowledge and experience who’ job is to find the mortgage that best suits the client’s needs, from a large selection of lenders that include most major banks and non bank lenders.
Building Inspection Report
A comprehensive report completed by a qualified and licensed property inspector which ensures the property is structurally sound and secure.
Building Regulations
Rules of a legal nature, where local councils control the quality, health and safety requirements of buildings being constructed.
Building Society
An organisation owned by its members, which pays interest on deposits and lends money against property to enable, members to buy their own homes.
Buyers Agent
A licensed consultant who signs a legally binding contract with a prospective purchaser to locate an ideal property at the right price.
Buyer
An individual or legal entity who wishes to purchase a property.
Cancellation of Settlement Fee
A fee that is paid if a home loan is cancelled when settlement has been already instructed by the representative solicitor.
Capital
Assets that are available for investment purposes to generate further wealth.
Capital Gain
The financial gain made when an asset is sold or disposed.
Capital Gains Tax
A federal tax on capital gains, payable only when the investment is sold or disposed (except the home that you live in).
Capitalising Interest
Interest that is owed and added to the original loan balance other than being paid off each repayment cycle (week, fortnight, month).
Cash Out
Releasing a desired amount of equity from your home by increasing your loan facility and drawing that equity as cash.
Caveat
The Latin word for ‘beware’. A document any person with a legal interest in a property can lodge with the Titles Office (Department of Lands) to ensure the property is not sold without their knowledge.
Certificate of Title
A document issued by the Land Titles Office for properties registered under the Torrens System, which serves as evidence of the present ownership and state of the property.
Chattel
Anything tangible and owned, other than a real estate property. The same as personal property such as furniture and clothing.
Collateral Security
Additional Security or assets supplied by the borrower to obtain a home loan.
Commission
The fee that is paid to a real estate agent or broker for their services.
Comparison Rate
Also known as the Average Annual percentage Rate (AAPR). Is the interest rate plus fees combined into a true rate.
Compound Interest
The interest that is paid on the principal balance and accrued and unpaid interest of the home loan.
Conditional Approval
This is the initial approval granted on a home loan application subject to required information being provided e.g. valuation and income details.
Consumer Price Index
The Consumer Price Index is a way the government measures the level of inflation. The CPI stands for the cost of goods and services used by the average consumer.
Contract
An agreement between two or more people, or an entity, that creates or modifies a legal commitment. This is enforced by law.
Consumer Credit Code
The Consumer Credit Code also known as the UCCC is parliamentary legislation which is designed to protect the rights of the consumer by ensuring all lenders stick to the same rules of the lending practice.
Contract of Sale
An agreement between a buyer and seller outlining items such as the purchase price, terms, and conditions necessary for both parties to communicate and come to an agreement.
Conveyance
The transfer of ownership for a property from one person to another person or entity.
Conveyancing
The legal process of transferring the ownership of a property from one person to another person or entity.
COSL The Credit Ombudsman Service is a free and independent External Dispute Resolution scheme. It provides consumers with an alternative to legal proceedings for resolving disputes with COSL Members operating in the Credit marketplace.
Cover Note
A document issued by an insurance company giving temporary insurance cover until a formal policy has been issued.
Company Title
This Title applies when a company owns the whole of the property. By purchasing shares in the company, the purchaser obtains an entitlement to occupy a particular part of the property. See your solicitor before buying.
CounterSigned
An additional signature or signatures to guarantee the legitimacy of a document.
Covenant
A clause in a mortgage that obligates and places restrictions on the borrower. If a violation occurs it can result in foreclosure.
Credit
Money that is borrowed under an agreement with the understanding that it will be repaid.
Credit History
A record of an individual's repayment of finances. Credit history is assessed by lenders as it forms part of the lending approval criteria.
Credit Limit
The maximum funds available on a line of credit facility or credit card account.
Credit Union
A not-for-profit institution that is operated as a cooperative and offers financial services such as savings accounts and loans, to its members.
Creditor
A person or entity that money is owed to.
Debt Servicing Ratio
A measure of the borrower's ability to repay a loan facility. A lender usually calculates the Debt Servicing Ratio by taking into account the borrower’s expenses (including the proposed loan) and total income.
Debit
The process of deducting a specified amount from the balance of an account.
Debtor
An entity that simply owes money to another entity.
Deed
A signed document that transfers ownership of property from one party to another party.
Delinquency (Default)
The failure to make repayments on your home loan when they are due.
Deposit
A deposit is normally paid by the buyer at the time of exchange when purchasing a property. It is generally 10% of the agreed purchase price.
Default
A default usually occurs when a party is unwilling or unable to pay their debt obligations. Defaults are recorded through credit reporting agencies such as Veda Advantage.
Depreciation
The decrease in the value of real property (improvements) due to age, market conditions and wear and tear.
Direct debit
A deduction of funds from a customer’s bank account e.g. monthly loan repayment.
Disbursement
Are fees and charges which are usually charged by the solicitor when establishing a loan.
Discharge of Mortgage
The release of borrowers from the obligation to repay their loan. It is also when a debt is paid in full and the property title is handed back to the borrower.
Disposable Iincome
A term referring to surplus income left over after all general and necessary expenses are paid e.g. the mortgage, car payment and insurance.
Draw Down
A draw down is the transfer of funds from the lender to the borrower once their loan has settled.
Duty (Stamp Duty)
A Government tax payable on financial transactions. Duty is paid on the purchase of real estate and is also payable on mortgages (mortgages only secured by investment properties).
Early Termination Payment
A fee or penalty paid to the lending institution if the loan is paid in full and or discharged within a specific period of time.
Easement
A right held by a person or entity to enjoy or make limited use of another person’s property.
Electronic Funds Transfer
The process of transferring funds from one account to another account(s) electronically.
Encumbrance
A registered claim for debt against a property e.g. as a mortgage.
Endorse
The process of signing the back of a cheque to transfer ownership to another party.
Escrow
A transaction in which a third party represents both the buyer and the seller or the borrower and the lender. This process involves the handling of legal documents and the disbursement of funds.
Establishment Fees
Fees payable to the lender to setup a home loan.
Estate
The personal effects and assets such as property left by an individual who has passed.
Exchange
The legal process of a purchaser and seller committing to the purchase and sale of a property.
Fair market value
The price a property would sell on the open market.
FBAA
The Finance Brokers Association of Australia established in 1992 represents finance professionals nationally.
Fee Simple
The owner has absolute ownership of the property.
First Home Owners Grant
Is a one off $7000 Federal Government provided to assist individuals to purchase their first home.
Fittings
Items that can be removed from the property without causing damage e.g. carpets and curtains.
Fixtures
Items that are attached to property that can cause damage if removed e.g. kitchen cabinets and stove.
Foreclosure
The forced sale of a property as a result of the mortgage being in default.
Frozen Account
An account suspended by the financial institution on grounds of fraud, tax evasion or error.
Garnishee
The seizure of property belonging to a borrower that is in the hands of a third party.
General Lien
The right of a lender to have all of the borrower’s property sold to satisfy a debt.
Gross Income
The total amount you earn before tax has been deducted or taken into account.
GST (Goods & Services Tax)
A 10% tax imposed by the Australian Government from 1 July 2000 on most goods and services sold in Australia.
All of the revenue raised from this tax is distributed to the states and territories.
Guarantee
A pledge by a third party to repay the loan in the event that you cannot.
Guarantor
A person who gives a guarantee and agrees to pay another person(s) debt if they default on their mortgage repayments.
Home Equity
The difference between a home's value and the outstanding mortgage i.e. what you owe.
Holding Deposit
A small amount paid to the seller’s agent to indicate your interest in the seller’s property.
Home and Contents Insurance
A general insurance policy which covers the house, the garage and other structures on the property. It also covers personal possessions inside the house such as furniture, appliances, against a wide variety of risks including floods, fire damage and theft.
Honeymoon Interest Rate (Introductory Rate)
A low rate charged by a lender for an initial period to encourage borrowers to accept the loan terms. After the honeymoon period is over, the interest rate generally increases to the standard variable interest rate.
Inclusions
Items to be included as part of a property sale, typically all fixtures as well as appliances and window coverings.
Income Statement (Profit & Loss Statement)
A financial statement that displays a snapshot of a business’ sales, operating expenses, profits and losses.
Indemnity
Insurance or cover against possible loss or damage.
Index
The marker of current economic conditions used to determine changes in variable loan interest rates.
Inflation
The rate of increase in the general price level of all goods and services.
Instalments
Regular periodic payments that a borrower agrees to make to the lender.
Interest
The amount you are charged for a loan that has been advanced to you by a lender.
Interest Only Home Loan
The borrower pays only the interest that is charged on the loan balance each month. Each payment goes toward interest so the outstanding balance of the loan does not decline with each payment.
Interest Rate
The price tag associated with borrowing money, expressed as a percentage, usually over a period of one year (annually).
Introductory Rate (Honeymoon Rate)
A low rate charged by a lender for an initial period to encourage borrowers to accept the loan terms. After the Introductory period ends, the rate charged generally increases to the lender’s standard variable interest rate.
Investment Property
A property that is owned for the purposes of financial gain, either through capital gain (increase in value) or through income from the rental market.
Joint tenants
The equal holding of a property by two or more persons or entities. If one person has passed over, their share is transferred to the other joint tenant.
Judgement
A decision of a Court, usually ordering one party to pay a sum of money to another party.
Land Titles Office
A Government organisation that is responsible for the registration of land transactions.
Land Tax
A tax imposed by state governments that is calculated by the value land.
Lease
A contract by which the owner of a property allows another party to use it for a specified time, usually in return for
payment - rent.
Lender
A financial institution that provides money in the form of a loan to a borrower.
Liability
Anything that is owed to another party.
Loan Maintenance Fee
An ongoing loan administration fee charged by the lender.
Lenders Mortgage Insurance (LMI)
Lenders Mortgage Insurance protects the lender if the borrower is unable to repay the mortgage. The lender will then recover costs by selling the property and will make a claim for any losses via the mortgage insurer.
Loan
Money borrowed that is usually repaid with interest.
Loan to Valuation Ratio (LVR)
Used to determine the percentage of borrowings against the total value of the property being used as security.
Low Document Loan (Low Doc or Lo Doc)
Purely designed for the self employed who cannot provide verification of income such as the traditional tax returns and financial statements.
Lump Sum Repayments
Extra or Additional payments that are made over and above the minimum repayment requirements.
Margin Lending
A lending facility that enables you to borrow against assets such as shares to invest and purchase more shares.
Market Value
The highest price that a purchaser is willing to pay and the lowest price a seller would accept.
Maturity
The date which a loan is to be paid off in full.
Maximum Home Loan Amount
The maximum amount that can be borrowed based on an individual’s borrowing capacity.
MFAA
The Mortgage & Finance Association of Australia established in 1980, is a leading provider of service and representation to mortgage and finance professionals to assist them to develop, foster, and promote the mortgage and finance industry.
Minimum Home Loan Account
The minimum amount that can be borrowed based on an individual’s borrowing capacity.
Minimum Repayment
The amount that you are legally required to pay for your loan on each repayment cycle so it is paid within the agreed loan term.
Mortgage Protection Insurance
Can assist in covering your home loan repayments in the event of losing your income due to serious illness or temporary disablement.
Mortgage Registration Fee
A state government fee charged for the registration of a mortgage. Fees and Charges vary between states.
Mortgagee
The party lending the money (Lender).
Mortgagor
The person who borrows the money (Borrower).
Negative Amortisation
The result of a borrower making payments that are less than the interest that is due. Unpaid interest is then added to the outstanding loan balance, causing the outstanding loan balance to increase instead of decrease.
Negative Gearing
This is where the total income from an investment property doesn’t cover all the related expenses.
Non Conforming Loans
Lending solutions available for borrowers who fall outside the traditional square or lending policies e.g. poor credit history, no verification of income, non resident borrowers, short working history.
Office of State Revenue (OSR)
The OSR is a Government Body that administers State taxation, collects revenue, outstanding fines and penalties, develops policy and implements legislation relating to State taxation for and on behalf of the people of NSW.
Off the Plan
Where a property is being purchased at the planning stage and is yet to be completed.
Old Systems Title
Is common law title which documents the original owners of the property. This title system is not so common these days.
Option to Buy
A Legal agreement that gives the buyer the right to purchase the property at an agreed time and at an agreed price.
Overdraft
A pre-arranged or agreed amount by which your bank account can be overdrawn.
Passed in
If a property is put to auction and the highest bid fails to meet the reserve price it is not sold.
Power of Attorney
A legal document that authorises an individual to act on behalf of someone else.
Portability
A home loan option that enables you to simply swap the property that is currently securing a mortgage with another property.
Pre Approval
An indicative approval issued by a lender, prior to the borrower(s) locating the property that will be purchased.
Principal
The original amount of the loan, excluding any interest.
Principal and Interest Repayments
A loan where the repayments include the interest charged and a portion of the original amount borrowed (the principal).
Private Sale
The sale and marketing of a property without the use of a real estate agent.
Private Treaty
A sale of a property at a price agreed by both purchaser and seller.
Re-amortise
To recalculate the minimum repayment required to pay off the outstanding loan balance over the remaining loan term (mainly where the loan balance has significantly increased or decreased from the original loan amount).
Redraw Facility
A home loan feature allowing the borrower to make additional payments and then access those funds when required. There may be a minimum redraw amount depending on the loan product.
Repayment Holiday
A feature which enables the borrower to suspend loan repayments for a specified period. During this period interest still accrues and repayments are usually adjusted after the holiday period ends so that the home loan is still repayable within the original term.
Reserve Price
The minimum sale price, which a seller will accept at auction.
Searches
Searches are usually carried out by the solicitor acting for the purchaser of a property. The purpose is to check if there are any problems or hidden issues which might affect the value of the property.
Security
Property is the usual security offered to guarantee a loan. The Security may be sold by the lender if the borrower defaults or doesn’t pay the loan on time.
Securitisation
The pooling together of similar loans (e.g. home loans) and transferring them into bonds or mortgage-backed bonds. These bonds then use the interest paid on the primary loans to pay the interest to the bondholders or investors.
Seller
The person who is selling their property. A seller is often referred to as a Vendor.
Settlement
The day that the lender confirms that the lending facility is active.
Split Home Loan
A combination of lending products e.g. half discount variable and half fixed rate.
Strata Title
This type of title gives you ownership of a small piece of a larger property. You have sole right to a particular unit and can lease, sell or legally dispose of your unit as you desire. You also have an undivided share of the common land.
Survey
A document that illustrates the property boundaries, size and specifies the location of buildings or dwellings on the property.
Switching Fee
A fee that is charged when a borrower wishes to change from one loan product to another loan product e.g. switch from a variable rate loan to a fixed rate loan.
Tenants in Common
Two or more people owing a property together in equal or unequal shares (unlike joint tenants). Tenants in common can leave their interest in the property to nominated beneficiaries instead of the other owners.
Term
The length of time that the loan must be repaid in.
Title Deed
A legal document proving a person's right and ownership of a property.
Title Fees
Fees and charges payable for services provided by the State Land Titles Offices e.g. Title Search, Mortgage Registration, Mortgage Discharge.
Title Search
A check of the title records to ensure that the seller is the legal owner of the property and that there are no loans, guarantees or other outstanding issues with the property.
Torrens Title
Title that grants ownership of a piece of property. Also known as Certificate of Title.
Transfer
A legal document registered at the Land Titles Office and noted on the Certificate of Title which validates the change of property ownership.
Unencumbered
A property without any loans, encumbrances or restrictions against it.
UCCC
The Consumer Credit Code was developed in response to business and consumer concerns as a national initiative to standardise credit practice in Australia. It covers all regulated credit or lending nationally.
Valuation
A report completed by a registered valuer, detailing their opinion of a property’s value.
Variable Interest Rate
Rate that may change or fluctuate according to the change in the ‘cash rate’ and/or market conditions and pressures.
Variation
An amendment or change to an original loan agreement.
Variation Fees
Fees associated with changing a home loan agreement.
Vendor
Party that places their property on the market for sale.
Why Group
A personalised, unbiased and tailored source of mortgage advice.
Xtra
Our friendly team is always striving to give our clients that something Xtra!
Yes
We know lender loan policy inside out, making it even easier for them to say YES!
Zoning
The control of land-use by local authorities and responsible planning authorities.
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