Extra Funds paid into a loan in addition to the minimum monthly payments.

Party authorised to act on behalf of another in legal dealing.

The period of time repayment of a loan is calculated over.

The fee charged by a lender to cover or partially cover the lender’s costs of setting up or establishing the loan.

The interest and fees incurred during a period, to be paid at the end of that period.

Money, property or goods owned

Lending institution that lends funds based on the value of the asset (which will be held as security)

Legal transference of a right or a title to a property to another party

The right of a bank to retain a customer’s security until a liability owed to the bank is discharged (see also General Lien)

A person, persons or entity borrowing money

Real Estate Agent acting on behalf of the buyer to find and negotiate on properties for the buyer.

the current value of your assets including your car, property, business, cash etc.

The financial gain from an appreciation in the price of an asset over time

A notice of warning given to a public authority (such as Titles office) by an interested party claiming entitlement to an interest in certain land. The caveat is registered and provides a warning to any party contemplating dealing with the property. It prevents any action from being taken without notification being made to the caveator.

Any right established over a borrower’s property to secure a debt or performance of an obligation

Additional or supporting security given in addition to the principal security

Legislation designed to protect the rights of the individual (personal consumer) by ensuring banks and other financial institutions adhere to set rules when providing personal, domestic or household credit. It is designed to ensure borrowers receive complete and honest information regarding potential loss.

A written agreement outlining the terms and conditions for the purchase or sale of property.

The legal process for the transferral of ownership of real estate

The company that holds credit information on everyone. CRAA is also known as “Veda Advantage Limited”.

Interest calculated on a daily basis against the daily account balance.

Someone who owes money to another and can be compelled to perform an obligation.

A document in writing which is signed, sealed and delivered by the parties thereto, to prove and testify to the agreement of the parties whose deed it is, to the things contained in the deed.

Where the lender debits (deducts) a payment from a customer’s bank, credit union or building society account

Solicitors’ incidental costs involved when dealing with client on behalf of the lender, e.g. searches, certificates etc.

Act of transferring money from a lending institution to the borrower after the loan has settled

A charge or liability over an asset, e.g. a mortgage.

An interest in land

Generally used to denote the financial interest of a person in a property or business enterprise, e.g. home equity in the difference between the property’s value and the amount owed to a lender. A person’s overall equity refers to his net financial worth, or the difference between what they own and what they owe. (i.e. Assets- Liabilities = Equity).

The legal point of time when the vendor and buyer swap documentation with a view to settlement

The estate in fee simple is the highest in the land, and is the closest the law comes to recognising absolute ownership for all practical purposes. Note, however while we refer to a proprietor of an estate in fee simple (who is the owner for all practical purposes) their ownership is legally absolute, for absolute legal ownership of all is with the Crown.

Items that can be removed from a property without causing damage to it.

An interest rate set for a specified period of time

Items that would cause damage to the property if removed. Their removal must be stipulated in the contract of sale and damage made good by the seller, e.g. bathtub.

A court order taken out by a creditor on a person’s employer or banker for the deduction of funds from their wages or bank account to repay a debt.

The system whereby all dealings on a property are made in the form of conveyances, whether the transaction is a sale, a mortgage, a reconveyance etc. Under this system the mortgage is in fact a transfer of ownership. When a conveyance is prepared it forms part of the chain of title and must be carefully preserved in order to prove the “root” to title.

Sets out in writing the bank’s right to retain property until all debt is paid. Includes power of attorney and other clauses generally contained in bank security forms.

Income from a person or company before tax, superannuation or payroll deductions.

A person who agrees to be responsible for the payment of another’s debts.

A refundable deposit based on the goodwill of the buyer to go ahead with the purchase.

Security against damage or loss; sum paid in compensation for loss incurred

Formal Legal document in writing, e.g. deed of conveyance

The lender’s charge for the use of funds or the return on deposited funds; the cost of money.

A loan where the principal is paid back at the end of the term and only interest is paid during the term. These loans are usually for a short period of time, #1 to 5 years.

The bank’s joint account authorities, guarantee forms etc. are structured to ensure joint account holders with debts due to the bank shall be SEVERALLY liable (i.e. individually) as well as JOINTLY). With Joint and Several Liability, a creditor has many rights of action as there are debtors; they can sue them jointly or severally until payment is obtained, and an unsatisfied judgement against one debtor will not be a bar to action against the others.

A debt for which one is liable; being responsible only to a limited amount.

A maximum loan amount allowing that amount to be borrowed again once it has been repaid

This type of loan allows the borrower to borrow funds (up to 80% of the property value) for any personal use. Repayments for this type of loan are flexible, which means the borrower can make repayments anytime. The repayment amounts also depend on how much the borrower wants to pay as long as he doesn’t exceed the credit limit. This loan has no fixed term.

An advance of funds from a lender to a borrower on the understanding the borrower pays interest on the loan, plus pays back the initial amount of the loan over an agreed time.

The amount lent as a percentage of the value of the security

The date of a debt or investment must be paid in full.

A charge over a property. This is distinct to a mortgage loan which is a loan that has been secured by a charge over a property. It provides the lender (mortgagee) with the right to repossess the property if the borrower fails to repay the loan.

The lender of funds

The person borrowing money in the terms of the mortgage

Gearing refers to the borrowing of money to invest. Negative gearing is where the cost of holding the investment (loan payments, council rates, maintenance etc.) outweighs the income produced by the investment leading to a cash shortfall.

Buying a property that has not been built as of yet but is considered based on the plans for the building.

Where a new property can be used as security for an existing loan, i.e. when the loan is transferred to a new security property without needing to repay the loan, reapply, or restructure.

A written authorisation to another party to perform certain acts for the grantor of the power

The capital sum borrowed on which interest is paid during the term of the loan

A loan in which both the principal and the interest are paid during the term of the loan.

A property may be tangible or intangible, and may have a monetary value, e.g. house, car, goodwill.

Borrower is able to draw from their loan surplus amounts (the difference between their limit and their balance)

To replace or extend an existing loan with a loan from either the same or another institution.

An examination to confirm the vendor is in a position to sell the property and that there are no encumbrances on the property.

The package of cash flow producing assets into a marketable security, e.g. mortgages bundled by lender in the form of mortgage-backed securities (bonds), and sold into the capital markets. Investors in the bonds include super and life companies.

An asset that guarantees the lender their borrowing until the loan is repaid, generally the asset the borrowed funds purchased.

Ability of the borrower to meet repayments on a loan, based on the borrowers expenses and income(s).

Finalisation of payment by the new owner and consequent taking of possession.

A group of people who collectively own and manage residential accommodation.

A person who makes themselves responsible for another’s payment of debt; also known as the guarantor.

Property in the names of two or more parties and in which each has a separate and distinct share. If one party dies, their share does not revert to the other owners but becomes part of their estate and will be paid to beneficiaries.

The length of a home loan or a specific portion within that loan.

Security provided for a mortgage by a third party ( someone different from the actual borrowers)

Registration showing the ownership of the property

Process to ensure the vendor has the right to sell and transfer of ownership

System whereby ownership and all dealings on a property are detailed on one document, i.e. a certificate of title or deed of grant. Under this system a mortgage is a charge or encumbrance on the title.

A property free of liabilities, restrictions or mortgages.

A report as required by the lender, detailing a professional opinion of a property’s value.

A rate that changes in accordance with market rates

Changing any part of the original loan contract

A person selling a property who is the current owner