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Account keeping fee – Fee charged by the lender for administration of the account.

Administration fee – Fees charged by the lender for administering the loan account.

Application fee – A fee paid by the borrower) for the processing of the loan & mortgage documents.

Approval period – The length of time the approval is available to be taken up before the offer
is withdrawn.

Arrears – When a loan is behind in the normal repayment schedule.

Arrears fee – A charge for administering the arrear position.

Bank – A financial institution generally offering a wide range of financial services. Regulated by Commonwealth & State legislation. Funds are raised from various sources but regulated by the government.

Borrower – The person being provided funds in the form of a loan.

Building Society – A financial institution generally offering a wide range of financial services.
A co-operative owned institution raising funds from individuals & the wider market.

Capital gain – The result of an asset value rises over a period of time.

Capital loss – The result of an asset value decreases over a period time.

Caveat – A warning that there is another interested part in that property.

Certificate of title or Title deed – The document proving ownership & displays financial encumbrances & restrictions on a specified property.

Commercial loan – Where the property is of a commercial nature or the funds are for commercial purposes.

Community title or Company title – Consists of a one owner either a company or group in
which units / shares are purchased as part of the property.

Conditional Approval – Approval subject to certain conditions. Once the conditions are satisfied a full approval may be granted.

Construction loan – Where the funds are predominately being used for the construction of a home.

Consumer Credit Code or CCC – Is a law to protect the borrowers of owner occupied properties. The law gives borrowers rights & requires lenders to give certain information about the loan.

Contract for sale – A legally enforceable contract for the transfer of ownership of property relating to the sale of the property.

Cooling of period – A predetermined time between a deposit has been paid & contracts being signed. This gives the parties concerned time think about their decision.

Credit Union – A financial co-operative supervised by the Australian Financial Institutions Commission. Generally funds come from an individual, community or employment.

Deferred Administration Fee – Some lenders discount the application fee but will charge the full fee should the loan be repaid prior to the normal expiry of the loan over the term.

Delayed settlement – When both parties to agree to a settlement date beyond the normal 45 days.

DSR – Debt servicing ratio measures the capacity to repay the loan by taking the borrowers expenses as a proportion to their income.

Early discharge penalty – Should you wish to repay a loan earlier than agreed a penalty may be incurred. Generally this penalty refers to a fixed loan.

Easement – A restriction placed on the title of the land generally pertaining to drainage.

Equity loan – A loan to assist purchase for any worthwhile purpose using the equity or value in your property.

Establishment fee – A fee paid by the borrower) to establish the loan & mortgage.

Exchanged contract – when both parties sign the contract (agreement) to purchase the property & generally a deposit is handed over at this exchange.

Finance Company – A non-bank institution generally offering funds at a higher rate than banks but credit restrictions are looser. Funds come from the public through debentures & note prospectuses.

First Home Buyer – Purchase of the first home for owner occupation.

Fixed rate – Generally you are able to lock in a rate from 6 months to 5 years. Heavy break fees may apply should you wish to exit the fixed rate before the end of the chosen term. Generally linked to the bond market.

Home loan – A loan taken out to assist with purchase a home and land, refinance a home for owner occupation or investment or any other worthwhile purpose. Generally using a property
as security.

Honeymoon rate – Discounted or introductory rate for a short period of time to entice you to borrow from them. At the end of the honeymoon period the interest rate generally reverts to the standard variable home loan rate.

Interest only repayments – Where interest only payments on the loan are made - no principal repayments. The repayments are for the interest component of the home loan - generally for the previous month.

Investment loan – Where the property is used to gain income &/or capital gain. A tax benefit may apply – our advice is to consult your accountant for further assistance.

Joint nomination - Where 2 or more applicants can nomination 1 person to receive copies of any notice or documents. It assists with the lender sending out documentation to each borrower, applicant or guarantor.

Land loan – Where the funds are predominately being used to purchase land for eventual construction.

Lender – The person or institution granting the funds / loan.

Lender’s legal fees – Fees paid by the borrower) to the lender's solicitor for the work involved in establishing the loan & mortgage.

Line of credit – A flexible loan similar to an overdraft where you have a maximum limit which
you can access & operate as a day-to-day account. To simplify think of it as a very big credit card.

LVR – Loan value divided by valuation or security value multiplied by 100 gives a percentage. This percentage is used to assist with calculating the lenders maximum amount they can lend. For example if the LVR exceeds 80% mortgage insurance may be applicable & extra costs have to calculate.

Mortgage – Security over an asset / property given to a lender for the repayment of the loan.

Mortgage insurance – Insurance taken out against the borrower by the lender against default. The insurance is for default purposes only. If the loan defaults you may have to meet any shortfall between the amount realized on the sale of the property & the amount owing to the lender. The mortgage insurance in most cases will pay the difference.

Mortgage Registration fee – Government fee payable for the transfer of title; discharge of mortgage; registration of mortgage; registration of a caveat; discharge of a caveat & other registrations such as leases.

Mortgagee – The person or institution granting the funds take out a mortgage to protect their investment.

Mortgage Stamp duty – Government duty payable on the borrower’s mortgage. The borrower generally pays the duty. The amount of duty varies from state to state.

Mortgagor – Person providing the security (usually the borrower)

Negative gearing – An investment strategy. Buy an income producing asset / property.
The interest & expense are deducted from the income produced. Should the sum be a minus (negative); the sum is deducted from your income therefore reducing your tax position.

Off the plan purchase – A purchase of a property not completely constructed & in most cases title would be unregistered.

Old system title or Common law title – Consists of each transaction listing all ownership
& mortgage transactions since the property’s origin. Not very common.

Originator – A non-bank lender generally offering better interest rates than banks. Funds generally come from money market or mortgage trust etc. not from bank funding.
Owner Occupied loan– where the owner lives & uses the property for their enjoyment.

Payment default – Where the normal repayment has not been made on the specified date.

Permanent Custodians Ltd – The credit provider. Holds the mortgages & other documents on behalf of EasyChoice Home Loans.

Permanent Trustee Australia Ltd – The credit provider. Holds the mortgages & other documents on behalf of EasyChoice Home Loans.

Perpetual Trustee Company Ltd - The credit provider. Holds the mortgages & other documents on behalf of EasyChoice Home Loans.

Positive gearing – An investment strategy. Buy an income producing asset / property.
The interest & expense are deducted from the income produced. Should the sum be a positive
the income is added to your income therefore enable your to purchase further assets.

Pre-approval – Approval of a loan subject to certain conditions generally used to ensure you qualify for a loan prior to bidding or searching for a property to purchase.

Principal and interest repayments – Most popular type of repayment where the accrued interest & aportion of the principal are calculated on the term, interest rate & loan amount.
These repayments are made by regular instalments either monthly fortnightly or weekly payments.

Privacy Act – Is a law to protect the consumer in regards to their privacy from information being shared about a consumer. By signing the Privacy Act Authority it gives the lender authority to access credit reports or credit reference associations.

Public Trustee – A body (semi-government) set up to monitor the wishes of a public member on behalf of the beneficiaries.

Purchase stamp duty – Government duty payable on the contract of sale.

Purchaser – The buyer

Redraw facility – Extra instalments, lump sum or higher instalments than normal can be accessed. Generally this facility available for variable rates only.

Right of way – A restriction placed on the title of the land generally pertaining to shared
driveway or access driveways.

Searches – Enquiries made to confirm ownership, encumbrances & restrictions on the property.

Securitisation – Converting an asset such as a home loan into a marketable commodities by pooling & selling mortgages.

Security – An asset used as a guarantee of a loan.

Serviceability – The calculation using income & various deductions to ensure the borrower)
can afford or able to meet the home loan commitments. Generally fluctuations in interest rates
are factored into the calculation.

Settlement – The completion of the sale/purchase when the final payments are made for the transfer of ownership of the property. This is when the lender receives the transfer & title deed & discharge of any existing mortgages. Generally the keys to the home are handed over at this time.

Standard variable rate – Most common rate charged by lenders. Generally linked to the official cash rate that can fluctuate (vary – rise and fall) due to the economic conditions.

Strata title – Right of title or ownership of a section or “unit” of a larger building.

Substitution of security – When a property or cash of equal value replaces a security for more than the LVR required.

Term – The length of time a loan or the predetermined length of time within the loan.

Torrens title – The right of title or ownership of the property.

Valuation or evaluation fee – A fee paid for a professional opinion of the value
of a property.

Vendor – The seller

Zoning – Local authority guide as to the permitted uses of the land & construction on said land.