Accrued Interests
Interest calculated and added to the interest amount payable, but which is not yet paid.
Amortisation
Scheduled repayment of a loan through regular installments over a period of time (e.g. weekly, fortnightly or monthly repayments over a 30 year term). The borrower pays the interest and part of the principal in each repayment. Contrast to “Interest Only Loan”.
Application fees
Fees that Lenders charge to consider a loan application. These are paid up front and are usually not refundable unless the loan is refused.
Arrears
The total of overdue loan repayments.
Assets
Real estate, securities, cash and other goods owned by individuals.
Bridging finance
A short term Loan that covers a financial gap between the purchase of a property and the sale of a current property.
Capped Rate Loan
A Loan where the interest rate is guaranteed not to exceed a stated rate for a fixed period of time. The interest rate can fall.
Certificate of Compliance
A certificate issued by Council (for a fee) confirming that all buildings on the land comply with Council’s building regulations.
Certificate of Title
A certificate issued by a government body that describes a title reference to a particular parcel of land, the registered owner of that land and any encumbrances (such as a mortgage) registered against the title.
Community Title
A property title where several dwellings are erected on an estate, where the owners have access to a community club house, swimming pool, barbecue area, tennis court etc. The owners have to pay levies for upkeep on the community facilities.
Company Title
A type of ownership for a unit/flat/apartment in a building that is owned by a company. A purchaser of a unit/flat/apartment buys particular shares in the company which gives the purchaser the right to occupy the unit/flat/apartment. Lenders are generally not enthusiastic about lending on company title properties.
Covenant
Imposes conditions on the use of, or the nature of the dwellings erected on, a parcel of land.
Credit Bureau
An organisation to which Lenders subscribe that holds credit information on individuals. For a fee, it is possible to obtain a listing that details your credit history.
Equity
The amount of an asset not subject to any Lender’s interest e.g. property worth $300,000, with a mortgage loan of $150,000 – equity is $150,000.
Equity Loan (or Line of Credit)
A loan usually secured by the proportion of the home in which one has equity. It usually operates like an overdraft, where the borrower has a set credit limit to which they can draw funds.
Establishment Fee
A fee charged by a Lender to set up a loan.
Fixed Interest
An interest rate set for a fixed term. Penalties may apply if the loan is paid out or additional repayments made before the term expires.
Garnishee
To legally divert whole or part of someone’s money to another party.
Loan to Valuation Ratio
The ratio of the amount lent to the valuation of the security. Commonly called LVR. An example would be a Loan of $120,000 on a home valued at $130,000. The Loan to Valuation Ratio is $120,000 multiplied by 100 and divided by $130,000 – 92.3%.
Mortgagee
The party taking a mortgage over land, usually to secure a loan.
Mortgagor
The party granting a mortgage over land, usually to enable borrowing from a Lender.
Strata Title
Similar to Torrens Title, but usually over units. With Torrens title, the land is owned plus everything thereon. With Strata Title, only a particular unit is owned.
