Terminology

PRINCIPAL AND INTEREST (P&I)

A loan where both principle and interest are paid with every repayment during the term of the loan.

INTEREST ONLY (IO)

The loan amount remains the same over the term written and payments do not include any principle components.

REDRAW FACILITY

A loan option whereby you can make additional repayments and then access those extra funds if necessary.

REFINANCING

To replace or extend an existing loan with funds from the same lender or a different lender.

SECURITY

Usually the property or vehicle (asset) offered as security for a loan.

SETTLEMENT DATE

Date on which the new owner finalises payment and assumes possession of property. Sometimes called the “draw down” date, as this is the date the loan is usually fully drawn.

FEES

All transactions have associated charges to enable documents to be registered.

  • Duty on the property purchase which is a sliding scale and can be calculated by visiting  Department of Finance
  • Registration Fees are applicable for discharges, transfers, mortgages and any additional registered document. Visit Landgate for current rates.

STANDARD VARIABLE LOAN

A loan which has an interest rate that varies according to market forces. The loan usually has comprehensive features, such as offset and redraw options.

FIXED RATE LOANS

Is a loan where the interest rate doesn’t fluctuate during the fixed rate period of the loan. This allows the borrower to accurately predict their future repayments.

STRATA TITLE

The form of property ownership most commonly associated with units, apartments and townhouses, where the owner holds title to a particular unit, which is called a lot, in a strata plan. Each lot holds a percentage of the strata plan known as unit entitlement.

SURVEY

A plan that shows the boundaries and the building position on a block of land. For vacant land it will disclose the building envelope.

JOINT TENANTS

In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship.

 

TENANTS IN COMMON

Where more than one person owns separate, defined portions of a property. If one person dies, the relevant portion passes through the deceased’s estate rather than to the other property owner’s as with joint tenancy. Each owner can hold a specific share of ownership and has the right to dispose of their interest.

TERM

The length of a loan or specific portion within the loan.

TITLE (RECORD) SEARCH

A request to Landgate to ascertain the ownership of a specified property and any encumbrances, covenants and easements that may be recorded on the title.

TORRENS TITLE

Torrens title is the most common for of property title in Australia. Real Property (Commonwealth Title) Act 1975 is the legislation that governs the operation of Torrens title. Ownership of the property is registered with the Land Titles Office and evidenced by the Certificate of Title, which shows the current owner’s name and any other interests in ie property e.g. mortgages.

UNENCUMBERED

A property free of encumbrances (mortgages) or restrictions.

VALUATION

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

VARIABLE INTEREST RATE

An interest rate that varies during the term of the loan, in accordance with market focus.

 

 

 

 

 

 

 

 

 

 

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