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Interest
Interest calculated and added to the interest amount payable, but which is not yet paid.Amortisation
Scheduled repayment of a loan through regular installments over a period of time (e.g. weekly, fortnightly or monthly repayments over a 30 year term). The borrower pays the interest and part of the principal in each repayment. Contrast to "Interest Only Loan".
Application Fees
Fees that Lenders charge to consider a loan application. These are paid up front and are usually not refundable unless the loan is refused.
Arrears
The total of overdue loan repayments.
Assets
Real estate, securities, cash and other goods owned by individuals.
Bridging Finance
A short term Loan that covers a financial gap between the purchase of a property and the sale of a current property.
Capped Rate Loan
A Loan where the interest rate is guaranteed not to exceed a stated rate for a fixed period of time. The interest rate can fall.
Certificate of Compliance
A certificate issued by Council (for a fee) confirming that all buildings on the land comply with Council's building regulations.
Certificate of Title
A certificate issued by a government body that describes a title reference to a particular parcel of land, the registered owner of that land and any encumbrances (such as a mortgage) registered against the title. Community Title A property title where several dwellings are erected on an estate, where the owners have access to a community club house, swimming pool, barbecue area, tennis court etc. The owners have to pay levies for upkeep on the community facilities.
Company Title
A type of ownership for a unit/flat/apartment in a building that is owned by a company. A purchaser of a unit/flat/apartment buys particular shares in the company which gives the purchaser the right to occupy the unit/flat/apartment. Lenders are generally not enthusiastic about lending on company title properties.
Covenant
Imposes conditions on the use of, or the nature of the dwellings erected on, a parcel of land
Credit Bureau
An organization to which Lenders subscribe that holds credit information on individuals. For a fee, it is possible to obtain a listing that details your credit history.
Establishment Fee
A fee charged by a Lender to set up a loan.
Equity
The amount of an asset not subject to any Lender's interest e.g. property worth $400,000, with a mortgage loan of $180,000 - equity is $220,000.
Equity Loan (or Line of Credit)
A loan usually secured by the proportion of the home in which one has equity. It usually operates like an overdraft, where the borrower has a set credit limit to which they can draw funds.
Fixed Interest
An interest rate set for a fixed term. Penalties may apply if the loan is paid out before the term expires.
FHOG (First Home Owners Grant)
Your First Home Owners Grant is only given to you as a subsidy by the government and is a one off payment of $7,000, this is only issued if you are a First Home Owner purchasing a property below $500,000.
Garnishee
To legally divert whole or part of someone's money to another party.
Gearing
The ratio of income required to service debts.
Guarantee
A form of security for a loan where someone else promises/guarantees to repay the loan if the borrower defaults. Most Lenders will consider Guarantees in very limited circumstances only.
Interest Only Loan
A loan where the principal is repaid at the end of the loan term and interest only is repaid during the term of the loan. These loans are usually short term, say 1 to 5 years.
Joint Tenants
Where more than one person is the owner of the property. If one person dies, then the title reverts to the survivor(s), irrespective of the deceased's will. Refer also to "Tenants in Common".
Liabilities
A person's debts. There are also "Contingent Liabilities", which are Liabilities that are contingent on something happening e.g. where a guarantee is acted upon through a loan default. In other words, the liability may or may not come into effect.
Loan Stamp Duty
The State Government's stamp duty on the mortgage taken to secure a loan. Also referred to as "Mortgage Stamp Duty". Some States offer exemptions on this for first home buyers.
Loan to Valuation Ratio
The ratio of the amount lent to the valuation of the security. Commonly called LVR. An example would be a Loan of $220,000 on a home valued at $400,000. The Loan to Valuation Ratio is $220,000 divided by $400,000 = 55%.
Mortgage
The term mort-gage is originates from two words. The 'mort' is from the Latin word 'mori' which came into English use via the old french 'mort' meanign death and 'gage' conveying a pledge to forfeit a security or collateral if a debt is not repaid. So a literal translatation would simply be a 'death pledge'.
Mortgagee
The party taking a mortgage over land, usually to secure a loan.
Mortgagor
The party granting a mortgage over land, usually to enable borrowing from a Lender.
Negative Gearing
Where the income earned from an investment is less than the costs associated with obtaining and maintaining the investment. The "loss" can be deducted from taxable income.
Old System Title
Under "Old System", there is a separate deed prepared and executed each time property is transferred or a mortgage is taken etc. If one transaction is missing, the ownership can revert to a previous owner. A complex title system, with heavy associated legal costs. Less than 5% of land remains under Old System Title.
Overdraft
A prearranged limit to which a person can exceed the account balance. Usually used for business purposes.
Principal
The capital sum borrowed.
Principal & Interest
A loan where both the principal and interest are repaid together on a regular basis, mostly by monthly installments (P&I).
Strata Title
Similar to Torrens Title, but usually over units. With Torrens title, the land is owned plus everything thereon. With Strata Title, only a particular unit is owned.
Security
An asset that protects a Lender's risk until the loan is fully repaid. Usually property, such as real estate, is offered as security.
Settlement Date
Date on which the new owner finalises payment and assumes possession of land. Sometimes called the "Drawdown" date, as this is the date the loan is usually fully drawn.
Stamp Duty on Transfer
State Government tax assessed on the sale price of the property. First home buyers may be eligible for concessions on this.
Survey
A plan that shows the boundaries and the building position on a block of land.
Tenants in Common
Where more than one person is the owner of the property. Each owner has a nominated share of ownership, such as 25% each.
Torrens Title
Torrens Title is the most common form of property title in Australia. All previous and current owners are listed on the one deed, as are all previous mortgagees etc. Also know as "RPA" standing for "Real Property Act", the legislation that governs the operation of Torrens Title.
Valuation
A report giving a professional opinion on the value of property. A valuation obtained for one Lender is NOT suitable for another Lender, as each valuation has an indemnity clause that protects the specific Lender. Valuations can take several days, as the Valuer may need access to the dwelling, so appointments with current owners/renters are necessary. This can slow the process. Some Lenders may not require formal valuations, subject to certain conditions.
Variable Interest Rate
An interest rate that varies during the term of the loan, in accordance with market forces.
Zone Certificates
A Certificate that confirms the local government authority guidelines as to the permitted uses of the land.
GNU Free Documentation License
Mortgage Centre is the author of these definitions, and releases its content under the terms of the GNU Free Documentation License, Version 1.2 and later.
Learning Centre at Australian Mortgage Centre
Frequently Asked Questions
What should I look for in a Mortgage Broker?
How refinancing your home loan can save you money?
Saving you money
Borrowing money
Pay off high interest debits.
What is mortgage refinance and how can it benefit you?
Factors that will affect your rate
Know what type of loan you require
Familiarise yourself with mortgage terms
Watch the rates
Have Us Bid YOU a better loan
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What should I look for in a Mortgage Broker?
Top 7 things to look for in a Mortgage Broker:
Mortgage brokers have really come under fire in recent years, and with good reason. We have all known brokers whose dealings have been less than ethical at best and some what illegal at worst.
For this reason, we have compiled a list of things to look for in an ethical, reliable, dependable mortgage broker. Here, at Australian Mortgage Centre we would like to get our job title out from the list of "dirty words."
1. A good mortgage broker does not charge fees up-front
The only out of pocket expense for you in most situations would be the cost of the lenders establishment fee ( which most times will include 1 standard valuation and legal’s).
2. A good mortgage broker will explain terms that are unfamiliar
You should not have to run to a financial dictionary every time you have a conversation with your broker. Simply ask him to explain. A good mortgage broker will clarify the numbers as many times as necessary for you to understand them.
3. A good mortgage broker is available
It should not take a week to have a call or an email returned. You really should be a priority. A good mortgage broker under promises and over delivers.
4. A good mortgage broker organises a pre-approval quickly
You need someone who is always on top of things, almost as though he were investing his own money in the process.
5. A good mortgage broker works with a large number of lenders
A good broker is completely industry credited and directly associated with many lenders totally understanding their policies. Someone who is looking out for you and who will find you the best mortgage product for your situation.
6. A good mortgage broker is pro-active and knowledgeable
A good mortgage broker is pro-active and knowledgeable. He may not have all the answers, but he does have a great deal of them. He speaks intelligently and he listens to you when you speak.
7. A good mortgage broker is personable
He will be the person with whom you are going to have a great deal of contact. This will also be the person who is going to play a large part in one of the most exciting (but also stressful) times of your life. There really is no time for any personality clashes.
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How refinancing your home loan can save you money?
Two of the simplest methods to find the best mortgage deal are:
* Spend time comparing deals online. Remember, there can be thousands of mortgage products to sift through but it will be worth your while to compare the Whole of the Market for a deal that suits your financial circumstances.
* Work in collaboration with a certified mortgage broker like any one of the consultants from the Australian Mortgage Centre. They have access to most, if not all, of the mortgage products available and can help you understand the repayment terms and any associated costs and fees when you refinance.
Be sure to ask your current lender if there are any early discharge penalties if you choose to switch to another lender. In addition, a new lender may also require you to pay certain fees such as an establishment/application fee, a valuation fee, and solicitor’s fees.
Keep in mind, most new lenders would love your business and may even offer to waive some or all of these fees to entice you to switch to them. Australian Mortgage Centre through its strong and respected reputation with all Australian lenders will certainly assist you in this area.
As with any type of borrowing, be sure the numbers stack up. The goal is to save you money. Shop around, speak to a mortgage broker or adviser, and take advantage of the deals offered to new customers to ensure you reap the benefits of a mortgage refinance.
Australian Mortgage Centre is always available to lend a hand and administer your future mortgage refinance.
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Saving you money
Looking for a better mortgage deal or cheaper rate? We all work hard for our money and it is pointless to pay more for anything, let alone the continuous expense of an existing high rate mortgage. Often times, when you take out a new mortgage with a lender you receive a special rate, for example a fixed-rate deal for new customers.
You probably received this low rate when you signed up with your current lender. However, once your special rate ends, you will most likely be paying the lenders Standard Variable Rate which may be much higher than the competition.
Refinancing with a new lender can save you a lot of money by taking advantage of lower rates offered to new customers while avoid the high rates of your current provider.
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Borrowing equity funds
A mortgage refinance loan may not necessarily always mean switching to a new lender completely.
You may be happy with your current mortgage set up, and instead would like to remain with your current lender however, require increase of funds by using the available equity built up in your property. This type of refinance can be done internally or better still applying for a loan increase against your existing mortgage.
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Paying off high interest debits
Short-term debts like personal unsecured loans, credit cards, store cards and overdrafts tend to carry high interest rates which are very easy to build up.
Getting rid of them is a different story. That ’s where Australian Mortgage Centre will step in. Structuring the appropriate mortgage refinancing product for the purpose of debt consolidation, you will significantly reduce the amount of interest payable for these types of debts, into one inexpensive and affordable monthly payment.
This will importantly be saving you the amount of interest payable in the long run.
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Several factors which will affect your rate
There are several factors that can influence the rate of your loan. Once you've decided to refinance your mortgage make it a point to understand the following:
* Credit History - As with any financial move, it's always important to know your credit file. Your credit file will indicate to the lenders how likely you are to repay the loan and to do so in a timely manner.
* Loan Term - The amount of time you have to repay your loan can directly impact the amount of interest you will pay. In many cases the longer it takes you to pay off your loan the higher the interest paid. Likewise, a shorter repayment period can offer you lower interest repaid.
* Type of Rate – Will your interest rate be a variable one that can change over time or will you decide on a fixed rate? Both can be beneficial and harmful on different levels making this something to consider when before you commit to any particular refinancing plan.
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Know what type of loan product you require
As a homeowner in the process of refinancing your mortgage; there are several options available to you.
The type of loan you choose depends on several factors. You're mortgage broker should be able to guide you in the right direction finding you a loan that fits your needs. However, it will be beneficial to you as the home owner to ask your self these questions:
* How much time will I need to pay off this loan?
* How much money will I really need?
* How much can you pay a month and will you be able to overpay your monthly fee?
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Familiarise yourself with mortgage terms
This can be as simple as going to a website that specializes in home loans and mortgage refinancing, reading the information they have provided such as is available in the Australian Mortgage Centre.
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Watch rates
Mortgage refinancing should help you the homeowner by reducing your monthly payments. In order for this to benefit you, the interest rate should be lower than your initial rate. Interest rates can change often so it's in your best interest to pay attention to any drops in the interest rate.
The Australian Mortgage Centre not only offers important credit information, we also specialise in helping you find the lowest mortgage rates from the best mortgage lenders!
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Have us bid YOU a better loan
Our unique service was created especially for you, the consumer.
It provides you a fast and convenient method to receive the most competitive mortgage loan offers from all major, second tier, and Non Bank Lenders right across Australia.
Consider us and find out how much better your existing mortgage or new mortgage loan can really be!!!
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Have Us Bid For YOU
Have Australian Mortgage Centre Bid for YOUR LOAN!
We will provide you with strong professional representation; resulting in a better deal with your current lender or from their immediate competition.
It's that simple… [TOP]
Australian Mortgage Centre through its strong market representation provides and administers many varieties of Home Mortgage Loans in Newcastle & Home Mortgage Loans in Tasmania utilising its direct lending partners that are located in your local area. Looking for a better deal from your local mortgage lenders? ....then give us try and see what we can do to help.....
