Glossary L-Z

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L

Lease: A document granting tenancy of a property for a specified period.
Liabilities: Loans, debts, or obligations.
Line of Credit Loan: This is a flexible loan that allows you to have funds transferred to your cheque account when required. It is similar to an overdraft but is available at a much lower interest rate at Wizard.
Loan Agreement: The contract between the lender and the borrower, which sets out the conditions that apply to your loan. It is important that you read the agreement carefully, and wise to get legal and financial advice, before you enter into the loan.
Loan Security Duty: Government stamp duty charged to register your mortgage.
Loan to Value Ratio (LVR): This is the measure of the amount of the loan compared to the value of the property. For example, if you have borrowed $160,000 and your property is valued at $200,000, the LVR would be 80%.
Lenders Mortgage Insurance: Lenders Mortgage Insurance is insurance taken out against the borrower to protect the lender against default. It is important to understand that lenders mortgage insurance does not provide you, the borrower, any form of protection. If the loan is in default, you may still be required to meet any shortfall between the amount owed to the lender and the amount received from the sale of your property. In most cases, the borrower pays the insurance premium.
Lump Sum Payment: An additional payment made by the borrower to reduce the loan amount. These payments are in addition to regular instalments.

M

Mortgage: Security over property given to the lender for the repayment of the loan.
Mortgagee: The lender of money, and the party who has the benefit of the mortgage over your property.
Mortgagor: The borrower.
Mortgage Duty: A government tax which is payable by the borrower on the borrower’s mortgage. The amount of the duty varies from state to state and in some states, mortgage duty may not be payable when the loan is refinanced.

O

Old System Title: (common law title) consists of a ‘chain’ listing all owners of a property since origin.

P

Power of attorney: A formal appointment where a person appoints another (called the attorney) to act as their legal representative.
Principal: The amount outstanding on your loan. You pay the lender the interest on the principal.
Principal & Interest Loan: This is the most popular type of loan where you repay a portion of the principal and the accrued interest over the term of the loan by regular instalments.
Private Sale: Sale of a property without the involvement of an estate agent.
Private Treaty Sale: The amount outstanding on your loan. You pay the lender the interest on the principal.
Principal & Interest Loan: A property sale where the buyer negotiates on a price set by the seller, rather than through the auction process.

R

Redraw Facility: If you have made any Lump Sum Repayments to your loan account, you can access those extra repayments whilst on a variable rate.
Refinancing: This means that you switch your loan from one lender to another.
Reserve Price: Preset minimum acceptable price of seller at auction.

S

Search: An enquiry to confirm that a property vendor is in a position to sell a property, also detailing any encumbrances listed against the property.
Security: An asset used to guarantee a loan.
Settlement: Is the completion of the sale or purchase of a property. When the final payments are made at settlement, the lender will receive the signed transfer and the mortgage. The lender will hold the title deeds and the mortgage until the loan is repaid. The keys to the property are either handed over at settlement, or picked up from the estate agent immediately following settlement.
Search: An enquiry to confirm that a property vendor is in a position to sell a property, also detailing any encumbrances listed against the property.
Settlement Date: Specific date at which buyer is to take possession of property upon finalising payment.
Signatory: Person authorised to access an account.
Stamp Duty: Stamp duty is a state government tax which is payable when a property is sold. Stamp duty is calculated on the purchase price of the property and is paid by the buyer. Each state and territory has a different rate of duty.
Strata Title: Title that grants ownership of a section or a ‘unit’ of a larger building. This ‘unit’ can be sold or transferred by the owner.
Survey: Plan that details a block of land noting the position of any buildings.

T

Term: The length of a loan or a defined period within that loan.
Torrens Title: Title that grants ownership of a piece of property. Also known as Certificate of Title.
Transfer: A document registered with the Land Titles Office noting the change of ownership.

V

Valuation: A professional opinion of the value of a property.
Variable Interest Rate: This is a fluctuating rate of interest charged by lenders. Variable interest rates change as official market interest rates rise and fall.
Vendor: The seller of a property.

Z

Zoning: Local authority guidelines as to the permitted uses of land and buildings.
Laurie O'Brien
Managing Director / Finance Broker
lobrien@bridgecoastfinance.com.au
Ph: 0419 231 975
Marie O'Brien
Accredited Mortgage Consultant
mobrien@bridgecoastfinance.com.au
Ph: 0418 493 288