A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

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.

F

Fee simple: The highest estate in the land that recognises absolute ownership for practical purposes.

Fittings: Items that an individual can remove from property without causing damage to the underlying structure.

Fixed interest: A fixed interest rate that is set at a pre-determined rate for the duration of the loan.

Fixtures: Items that, if they were removed from property, would cause damage to the underlying structure.

Freehold: A structure and the land it stands on, which is owned indefinitely by an individual or entity.

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.

H

Holding deposit: A deposit to show the buyer's intention to purchase.

I

Indemnity: Security against damages or losses.

Instrument: A legal, written document. Interest: The amount charged by a lender for using funds.

Interest adjustment: A charge meant to compensate a lender for loss of revenue if advance payments are made on a fixed loan.

Interest only loans: A type of short-term loan where monthly payments are for interest only, and the principal is repaid in lump sum at the end of the term.

Introductory loan: A home loan where a lower rate is offered for an introductory period.

J

Joint and several liability: When multiple individuals borrow for a single piece of property, the promise that all parties are each liable for the debt in full.

Joint tenancy: When a piece of property is owned by two or more persons, and each person has an equal interest in the entire property.

L

Liability: A type of debt one is responsible for.

Land tax: A tax levied on a piece of property unless it is a principal place of residence.

Land transfer registration: When the transfer, or conveyance, of ownership is transferred to a buyer.

Lien: A right to hold property as security against a debt.

Line of credit: A loan with a specified maximum, from which funds can be taken at any time up to that maximum amount.

Loan: When a lender provides funds that are to be repaid periodically with additional interest over an agreed upon time.

LVR (loan to value ratio): A ratio of the amount of funds being borrowed, to the property's value.

M

Maturity: The date when a debt or investment must be fully paid.

MIOS: Mortgage Industry Ombudsman Service.

Mortgage: Security for a real estate loan.

Mortgagee: A lender of funds for a mortgage loan.

Mortgagor: A borrower of funds for a mortgage loan.

Mortgage broker: An entity acting as a middleman to help a borrower select the best loan product from a variety of lenders.

Mortgage discharge fee: A fee levied to cover costs that are incurred in closing out a loan.

Mortgage insurance: A type of insurance taken out by lenders and paid for by borrowers, which covers any losses the lender may incur if the borrower defaults.

Mortgage manager: A company that manages a borrower's loan.

Mortgage originator: A lender that sources secured funds and packages them as loans.

Mortgage protection service: A type of insurance that covers loan payments if a lender is not able to meet them.

Mortgage registration fee: A state fee for registering a mortgage.

N

Negative gearing: An investment where maintenance costs exceed the income generated by the investment.

Net income: Income received after taxes have been deducted.

Net profit: Profit from a business after all expenses have been deducted, but tax has not been calculated.

Non-conforming borrowers: An applicant that would not ordinarily be eligible for a loan from a mainstream lender.

O

Off the plan purchase: When a piece of property is purchased from plans, and not the finished product.

Offset account: A savings account that is tied to a mortgage, so that the savings interest is applied to reduce the mortgage interest.

Ongoing fee: A loan maintenance fee that is levied over the life of a loan.

Overdraft: A limit set that allows a person to exceed an account balance.

P

Passed in: When at auction, the high bid on a piece of property does not meet reserve price.

Portability: When a new property is used as security for an existing loan.

Power of attorney: Authorisation for another person to act and sign contracts on one person's behalf.

Principal: The sum borrowed, without interest.

Principal and interest loan: A loan where both principal and interest are repaid in regular payments.

Private treaty sale: A sale of a piece of property where the buyer and seller negotiate with each other directly.

Property: Tangible or intangible asset, such as real estate or leasehold interests.

Q

R

Redraw: When a borrower is able to draw against pre-paid funds.

Refinancing: When an existing loan is extended or replaced with an additional loan.

Rental guarantee: When a developer makes a promise that an investment will generate a certain level of return.

Reserve price: A minimum acceptable price set at an auction.

Residential investment loan: A loan for a piece of investment property.

S

Search: Examination and confirmation that a seller is legally entitled to sell a piece of property and that it is free of other encumbrances.

Securitisation: When assets that generate a cash flow are packaged into a security that can be marketed, for example, in the form of bonds.

Security: Any asset that serves as a guarantee against funds that have been borrowed.

Serviceability: The ability of a borrower to meet the terms of a loan.

Settlement: When a new owner of a piece of property takes possession and finalises payment.

Stamp duty: A state tax on the purchase price and mortgage amount of real estate.

Standard variable: A type of mortgage loan with several features, with an interest rate that may rise and fall over time.

Strata title: A title of ownership in a unit of a larger building, which can be bought and sold.

Stratum title: A title of ownership in a unit of a larger building, where the owner is a shareholder in the company that manages the entire structure.

Surety: A guarantor, who is responsible for another's repayment of debt.

Susceptibility report: The likelihood of pest infestations on a piece of property.

T

Tenants in common: When a piece of real estate is owned by two or more individuals, with each having a separate share.

Term: The length of a loan.

Third party security: The security provided by a third party for the purpose of guaranteeing a mortgage.

Title deed: A registration that shows the ownership of property.

Title search: A process that shows that a seller has the right to sell a piece of property and that it is free of encumbrances.

Torrens system: A system of conveyance where all historical transactions of a piece of real estate are documented.

Transfer: A document that shows change in ownership of property.

U

Unencumbered: When a property is free of liabilities.

V

Valuation: A report that shows the property's value.

Variable interest rate: An interest rate that may rise and fall over the duration of the loan.

Variation: When a part of an original loan contract has been changed.

Vendor: An owner who is selling a piece of property.

Z

Zoning: Local guidelines that indicate which uses are permitted on distinct areas of land.