Owner Occupied

A property in which you live

Principal

The capital sum borrowed on which interest is paid

Principal & Interest

Refers to the way that repayments are calculated to the loan, E.g. part to Principal & part to interest with the amount owing reducing with every payment to principal received.

Private Funds

These monies are obtained from Private Investors who choose to invest in mortgages. These funds are managed sometimes by Solicitors and established mortgage managers. The loan purposes may vary and are subject to being risk rated –this means that for each individual loan, its’ purpose and the financial standing of the customer carry a determined interest rate relative to the proposed risk.

Professional Packs

A discounted product usually offered to borrowers with higher incomes or with high loan amounts. Discounts are usually given for the life of the loan & attract a monthly or annual fee

Re-Draw

The borrower is able to redraw funds that have been pre-paid.

Refinancing

To take your business elsewhere. To take your current Mortgage to a different Lender

Standard Variable Rate Loans

These loans are probably the most common of principle & interest loan facilities. They are usually fully featured ie; Redraw, extra repayments, internet & phone banking and so on. The rate being variable will fluctuate with market movement usually set by the Reserve Bank of Australia from time to time. They are extremely flexible.

Securitisation

Mortgage securitisation is a cost effective way of raising funds, directly from the money markets of Australia, Europe & the USA. As the funds cost less they are passed on to the consumer at cheaper rates. This has been one of the reasons that home loans have become cheaper since the deregulation of the banking industry

Security

An asset that guarantees the lender their borrowing until the loan is repaid in full. Usually the property is offered to secure the loan

Settlement

Is the completion of the transaction once documents & funds have been swapped between sellers & purchasers or their respective representation. The lender will receive a signed transfer & mortgage document that must be lodged with the Dept of Natural Resources to secure the Lenders interest in your property

Split Loan

Gives you the ability to be able to split your loan into different Products, Values & Interest repayment

Strata Title

This title gives you ownership of a Unit of a larger building, which may sell, lease or transfer at your discretion. This also entitles you to membership of the Body Corporate

Term

The length of time of a mortgage

Term Loans

Usually a 30 year term, each repayment that is received reduces the amount owing on the loan

Title Search

Process to ensure that the vendor has the right to sell or transfer ownership

Valuation

An independent report required by the lender detailing the professional opinion of a property’s value

Variable Interest Rate

This is a fluctuating rate of interest charged by the lenders. Variable interest rates change as the official interest rates rise & fall. These variances are determined by the Reserve Bank in Australia

Vendor

The word vendor is used to describe the owner /seller of an asset.