Glossary of terms
Loan which "bridges" the gap between the sale of one property and the purchase of another
A loan for the purpose of building a property whereby the loan is drawn down over stages of construction.
Legal fees on a property purchase are called conveyancing fees.
The amount of cash you require to contribute towards your home loan application.
When building a home rather than buying, funds can be accessed in small lump sums at various intervals to suit the building process.
The amount of value you have in a property that is unencumbered, therefore the balance of the homes value once any loans are deducted which use the home as security.
First Home Buyer
A person purchasing a property who has not ever purchased another property in their name.
First Home Owners Grant
A government incentive grant for purchasers of their first residential property to assist with the costs of purchase.
Fixed Rate Loans
Interest rates that are locked in (fixed) for a defined period of time.
Otherwise known as a mortgage, is a loan that is securitised against a property.
Where the interest is not paid on a regular basis but is instead added to the total loan amount.
Introductory or Honeymoon Rate Loan
So named because they give you a low rate for the first year (honeymoon period) before they revert to the market variable rate.
Line of Credit
This is essentially an equity redraw facility where extra money paid in can be withdrawn again on the same loan.
Loan to Value Ratio (LVR)
The percentage of the total loan the lender will lend you based on the total value of the property. Eg 80% LVR
A loan which is securitised against a property.
A specialist loan broker who acts as a middleman between the borrower and the lender to facilitate the negotiation and application for a home loan or financial product.
This is a way of paying off your mortgage faster by linking your everyday transaction account to the loan and using the balance to reduce interest.
Mortgage insurance safeguards the lender in case of borrower default and is generally required when the borrower does not have sufficient deposit.
Ongoing fees are those charged periodically over the life of the loan.
When you have paid extra money into your loan and withdraw it back if you need it in the future.
Refinancing simply means taking out a new loan to pay out an old one.
Dividing your loan into one-portion fixed and one-portion variable interest rates giving you the best of both worlds.
Stamp Duty is a State Government duty on financial and other transactions.
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