A
AAPR: Average annualised percentage rate. This is a figure that includes costs associated with a loan, and creates an average interest rate for the purpose of comparison.
Acceptance: Agreeing to an offer on real estate.
Additional repayment: Money paid on a loan, in addition to scheduled monthly mortgage payments.
Affordability: A figure derived by comparing disposable income to total obligations, in relation to considering the price of a piece of real estate.
Agent: A person or company that is authorised to act on behalf of another in real estate transactions.
All-in-one loan: A type of loan where you deposit all of your income into an account, and then withdraw it as needed.
Amortisation period: The amount of time allowed for repayment of a loan.
Application fee: A fee charged by a lender for establishing a loan.
Appraised value: An estimate of how much a property is worth.
Arrears: Amount of money that is overdue on a loan.
Assets: Anything of value that is owned.
Asset lender: A lender that provides loans based on the value of an asset that is provided as collateral.
Assignment: Transferring a property title from one party to another.
B
Banker's lien: A document allowing a bank to claim assets used as collateral until a loan has been satisfied.
Basic variable: A type of variable interest rate loan with lower rates, but less features than the standard variable loan.
Bankruptcy: When an individual cannot meet debts, a state of bankruptcy is declared by the courts either at the request of creditors, or of the debtor directly.
BayCorp Ltd: The company that records credit information on all individuals.
Body corporate: A corporate entity that is comprised of multiple owners of units in a common building.
Borrower: Any person or entity that borrows money.
Break costs: Additional fees and expenses incurred when a person pays off a loan ahead of schedule.
Bridging finance: Financing used to purchase new property before you have sold your old property.
Buyer's agent: A real estate agent who acts on behalf of a buyer.
C
Capital: Existing value of all assets.
Capital gain: The additional funds that are realised when a person sells something for more than it was purchased.
Capped loan: A type of variable loan where the interest rate may rise and fall over time, but may not exceed a pre-determined level.
Caveat: A notice that claims entitlement to land.
Certificate of title: A document that shows the dimensions of a piece of land, all encumbrances, and the details of ownership.
Charge over property: The rights that exist over a borrower's real estate that has been used to secure a debt.
Collared rate: A type of variable rate loan which may rise and fall over time, but only within a pre-determined upper and lower level.
Collateral security: Security provided for a loan in addition to the principal security.
Combination loans: Any type of split loan, or form one loan.
Comparison rate schedule (CRS): A schedule that shows the annual percentage rate of a loan for an amount over a pre-determined period of time.
Compulsory comparison rate (CCR): A standardised interest rate calculation that includes the extra costs involved in a loan.
Construction loans: A type of loan used for building a new dwelling.
Consumer credit code: A piece of legislation that protects the rights of consumers by imposing standardised rules on financial institutions.
Contract of sale: A contract that shows the terms of the purchase of a piece of property.
Conveyancing: The process whereby legal ownership of a piece of real estate is transferred between two parties.
CRAA: Credit Advantage Limited, or the company that formerly held credit information on all persons. Now known as BayCorp Ltd.
Credit limit: The maximum amount that can be borrowed.
D
Daily interest: Interest that is calculated daily, and varies according to the daily account balance.
Debtor: An individual or entity that owes money to another individual or entity.
Deed: A document that records and proves that certain listed property is owned by a stated individual or entity.
Default: When a debt payment has not been met by a due date.
Default rate: An interest rate that a loan adjusts to at the end of a fixed period.
Deferred establishment fee: A fee levied when a loan is paid back shortly after taking it out.
Deposit bond: A guarantee that a buyer will pay a deposit in full by a pre-determined date.
Depreciation: A method of accounting where the cost of an asset is spread out over the life of that asset.
Direct debit: A banking system where a lender deducts payments automatically from a borrower's account.
Disbursements: The incidental costs that a solicitor incurs when working on a client's behalf.
Draw down: When money is transferred from a lender to a borrower after settlement of a loan.
E
Encumbrance: A liability, such as a mortgage loan.
End loan. The amount left over after an existing home has been sold, and proceeds have been paid for the bridging loan.
Equity: The financial interest actually owned free of other encumbrance in a piece of property or other asset.
Equity loan: A loan that is secured by the value of one's equity in a piece of real estate.
Establishment fees: Fees a bank may charge to set up a loan.
Estate: An interest in a piece of land.
Exchange: A meeting between seller and buyer for exchanging documents for the purpose of settlement.
G
Garnishee order: A court order that can be issued to demand that an individual's employer or bank deduct money to repay a debt.
Gearing: A ratio of a borrower's own money to borrowed funds when making an investment.
General law system: A system in which all transactions concerning property are made through conveyances.
General lien: A document that shows that a bank has the right to retain any property or asset until a debt is repaid.
Government fees: Fees charged by governmental entities, such as stamp duty, at the time of settlement.
Gross income/profit: The income a person or entity has generated before taxes, superannuation and payroll deductions have been taken.
Guarantee: A promise to abide by terms of a contract.
Guarantor: A person who agrees to take responsibility for another's debts.