Mastering Mortgage Jargon

Help understanding common home loan terms

Click the starting letter of the term you are looking for. If you can't find it here, why not ask michael lee.

A

 

AAPR

The Average Annual Percentage Rate (AAPR) more completely indicates the cost rate of a loan as it includes ordinary fees and in addition to the interest rate. You will often see the AAPR is officially called the 'Comparison Rate'. Be careful though, some of the less scrupulous lenders have found loopholes in the formula.

 

Acceptance

Acceptance is the formal agreement to the terms of an offer or a contract. It is commonly used to refer to agreement to a loan offer or property purchase offer.

 

Account Keeping Fees

Fees charged by a lender on a regular basis.

 

Accrued Interest

Interest you have earned or incurred that is yet to be paid.

 

Additional Security

The availability or use of an extra asset or assets (usually another property) as security in addition to the main asset offered as a guarantee to the lender of repayment of your loan.

 

Additional Repayment

Extra money paid to your loan over and above minimum required payments. Additional repayments can cause a significant reduction in the term and cost of your loan.

 

Agent

Person or body authorised to act on behalf of another.

 

Allotment

A parcel or block of land.

 

Amortisation Period

Also known as the loan term, it is the period taken to repay a loan in full.

 

Application

The form used to record important information about the you and what you, your circumstances, the loan and the property. It is the first step to obtaining a loan.

 

Application Fee

A fee charged partially cover the costs of processing an application. These are rarely the only fees you will incur in arranging finance. You may also be required to pay legal, valuation, settlement and disbursements costs that cannot be calculated until after settlement and in some cases, Lenders Mortgage Insurance. Take care in this area as lender very rarely advertise all costs.

 

Appraisal

Also known as a valuation, it is an estimate of a property's market value. Valuations are prepared by registered valuers. When requested by a lender, they are based on a rapid, low budget sale as would be the case in foreclosure. As a result, the value assigned is often lower than that of a real estate agents opinion.

 

Appreciation

Growth in the value of a property.

 

Arrears

An overdue account yet to be paid.

 

Assets

Money, property or anything that is of economic value.

 

Asset lend

A loan based on the value of the asset held as security and usually does not require proof of your ability to service. These have previously been a more commercial product, however they have also become popular amongst residential lending and are more commonly referred to as 'low docs'.

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B

 

Balance Sheet

A statement of assets, liabilities and equity.

 

Bank Cheque

A cheque usually arranged over the counter at a bank, building society, credit union. You buy the cheque for cash and a small fee when you do not have a cheque book, or the recipient does not accept a personal cheque.

 

Bankruptcy

When a person has their estate placed into the hands of a receiver as a result of not being able to meet their debts. The receiver distributes assets, including future earnings to cover debts as best as possible.

 

Bearer

Person presenting a cheque for deposit into their account.

 

Body Corporate

A corporation of the owners of units within a strata titled property.

 

Borrower

The person or entity borrowing money.

 

Breach of Contract

Breaking the terms or conditions of a contract.

 

Break Costs

The penalty fees that may be charged if you terminate your loan within a certain period. May also be known as deferred establishment fees. In the case of Fixed Rate loans, you may also be charged a fee for 'economic loss'.

 

Bridging Loan

A loan used to allow you to purchase a new property whilst you have a mortgage on another that is to be sold.

 

Building inspection

Inspection of a building to ensure the it is structurally sound. Purchases can be made subject to a satisfactory building inspection to protect you during the negotiation phase.

 

Building regulations

A set of rules that councils use to control the manner and quality of buildings.

 

Buyer

Also known as the purchaser, the buyer is the person or entity who intends to buy a property.

 

Buyers Advocate or Agent

A person who acts on behalf of a buyer to find and negotiate on properties the buyer wishes to purchase. In most states and territories, Buyers Advocates are required to hold a real estate agents licence. Check the requirements with your local office or department of fair trading before engaging a Buyers Advocate.

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C

 

Capital Gain

A profit from the sale of property or investments.

 

Capital Gains Tax

A tax on capital gain. This tax can have major implications on your investment decisions and you should consult a suitably qualified tax professional to advise you on these matters.

 

Capital

Accumulated wealth.

 

Cash Rate Target

The Cash Rate Target is the rate set by the Reserve Bank of Australia and used to influence the general level of borrowings. Changes in the Cash Rate Target are announce by the Reserve Bank on the first Wednesday of each month and changes in this rate flow on to variable rate products at the discretion of the lender.

 

Certificate of Title

A registered document detailing the land dimensions, location and identifies ownership of land.

 

Chattels

A term often used to describe what is or is not included in the sale of a property. Real chattels are buildings and fixtures.

 

Clear title

When there are no restrictions (such as a mortgage) preventing the sale, and ownership of the seller has been established.

 

Charge

A legally enforceable right over a borrower's property to secure a loan.

 

Collateral Security

Same as additional security.

 

Commission

Money payable to brokers and real estate agents for their services. They are usually percentages of contract or loan value to encourage sales people to achieve higher amounts.

 

Company Title

A property title that applies when owners of units in a block form a company and ownership is based on shareholding. Borrowing restrictions usually apply to this type of title.

 

Comparison rate

See also AAPR, the Comparison Rate is designed to simplify the comparison process for borrowers, but take care, they can be misleading as lenders use different methods to calculate their fees and the quoted scenarios will usually differ from your own.

 

Comparison Rate Schedule

A compulsory publication provided by lenders that state the interest rate and respective Comparison Rate for their products.

 

Compound interest

Interest paid or charged on accumulated interest as well as on the original principal.

 

Consumer Credit Code

Legislation governing the relationship between borrowers and lenders. The legislation is designed to protect your rights by requiring finance institutions, mortgage brokers and similar entities to act in a uniformly decent and proper manner.

 

Contract of Sale

An agreement stating the terms and conditions for the purchase or sale of property.

 

Conveyance

The transfer of ownership of property from the seller to the buyer.

 

Conveyancing

The legal process for the transfer of ownership of real estate.

 

Cover note

A promise of insurance before the implementation of a formal policy.

 

CRAA

The industry standard repository for recording and reporting credit histories.

 

Credit

Borrowed money to be paid back under an arrangement with the lender.

 

Credit History

The history of an individual's borrowings and repayment used by lenders to assess your ability to repay a loan.

 

Credit Limit

The maximum amount of credit you can use at any one time.

 

Creditor

A party to whom money is owed.

 

Cross Security or Cross Securitisation

When a lender takes additional security for a home loan not required to purchase the property that is to be used as additional security.
 
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D

 

Daily Interest

The most common method of calculating interest by most institutions. Whilst it is calculated daily basis is is usually only credited or debited on a monthly basis.

 

Debit

A withdrawal from an account.

 

Debtor

Someone who owes money to someone else.

 

Debt Service Ratio

Also known as the DSR, it is t he mathematical relationship between your income and loan repayments sometimes used by lenders to assess your ability to repay a loan.

 

Default

The failure, large or small, to meet a payment on a due date.

 

Delinquency

The ongoing failure of a borrower to make timely payments under a loan agreement.

 

Deposit

The initial down payment to commence contract negotiations for the purchase of a property. The amount and obligations of the buyer and seller vary depending on where the property being purchased is located and you should discuss this with your conveyancer prior to making any deposit.

 

Deposit Bonds

These are used when you do not have immediate access to your money to be used as a deposit. Mates Rates can arrange deposit bonds for you if you find yourself in this position.

 

Direct Debit

Pre-arranged electronic debiting of payments from your account.

 

Disbursement Instructions

Directions given to as to who should be paid, how they should be paid and how much is to be paid.

 

Disbursements

Usually used to describe fees and charges such as search fees, postage and charges paid to agencies and Government authorities. Disbursement is also the act of making payments.

 

Discharge Fees

A fee ordinarily charged by lenders when finalising a loan account.

 

Discharge of Mortgage

A document signed by the lender to release their mortgage over your property.

 

Disposable Income

Income left over after expenses have been paid. (ie. loan payments, bills, etc).

 

Down payment

The initial down payment to commence contract negotiations for the purchase of a property. The amount and obligations of the buyer and seller vary depending on where the property being purchased is located and you should discuss this with your conveyancer prior to making any deposit.

 

Draw Down

The act of withdrawing money from an account (ie. loan account, savings account, etc), usually used in reference of transferring money at the borrowers instructions on settlement of a home loan.

 

DSR

The Debt Service Ratio is the mathematical relationship between your income and loan repayments sometimes used by lenders to assess your ability to repay a loan.

 

Duty (also Stamp Duty, Mortgage Duty and Land Transfer Duty)

State and Territory Government charges on financial contracts and transactions. It is usually a percentage of the purchase or contract value.

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E

 

Early Termination Charges

The cost of ending a loan early. May also include break costs, economic costs and accrued interest.

 

Easy Start Loan

A loan where the initial repayments are low and increase over time. These are similar to honeymoon or introductory rate loans, however the increases occur over a number of years. These home loans also tend to have a nasty bite if you want to leave them early and a nasty tail if you don't and we do not offer them through Mates Rates Mortgages.

 

Electronic Funds Transfer (EFT)

The electronic transfer of funds between accounts.

 

Encumbrance

A liability usually secured by a charge on property.

 

Equity Loan

A home loan by any other name, commonly used in reference to a Line of Credit Loan.

 

Equity

The part that you own and simply calculated as The Value of Your House - You Home Loan Balance = Your Equity.

 

Establishment Fees

Fees charged to set up a loan which may or may not cover application, valuation, and settlement fees.

 

Evergreen Line of Credit

This style of loan offers you a revolving line of credit on an interest only basis until such a time as the lender calls for repayment of the the principle. This allows you to use the funds for various purposes such as the purchase of a second property, shares or other investments.

 

Exchange (or Exchange of Contracts )

When the buyer and seller swap signed contracts. The legal implications of this step vary according to where you are purchasing your property. You should discuss this aspect with your solicitor or conveyancer prior to committing to this step.

 

Exit Fee

The penalty fees that may be charged if you terminate your loan within a certain period. May also be known as deferred establishment fees. In the case of Fixed Rate loans, you may also be charged a fee for 'economic loss'.

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F

 

Fee Simple

An older title type of real estate in which the owner has the right to control, use, and transfer the property at will.

 

First Home Owners Grant

The First Home Owners Grant is a grant from the Federal Government which is available as compensation for the increased cost of housing after implementation of the Goods and Services Tax (GST) on 1 July 2000. Eligibility and entitlements vary.

 

Fittings

Items that can be removed from a property without causing damage to it and which may or may not be included in the sale of a property.

 

Fixed Rate Mortgage

A home loan where the interest rate and your repayment amounts are locked in for an agreed term regardless of changes in the target cash rate.

 

Fixtures

Items that would cause damage to a property if removed and would ordinarily be a listed inclusion in the sale of a property.

 

Foreclosure

The repossession and sale of your home if you default on the repayments of your mortgage .

 

Freehold

A type of title where the buildings and the land on which they stand are owned by the owner until they choose to sell.

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G

 

Gross Income

Income before any tax, superannuation, or payroll deductions.

 

Guarantee

A promise to make good on a failure that is bound by the terms of a contract.

 

Guarantor

A person or entity that agrees to be responsible for the payment of another's debts should they default.

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H

 

Holding Deposit

A deposit demonstrating the goodwill of the buyer to purchase a property. You should appoint your conveyance solicitor or agent prior to making deposits on property and consult them on when a deposit is paid, how much it should be and your rights and obligations.

 

Home Equity Mortgage

Also known as a line of credit, this style of loan offers you a revolving line of credit. This allows you to use the funds for various purposes such as the purchase of a second property, shares or other investments.

 

Honeymoon Rates

"Honeymoon" or introductory rate home loans offer a discounted interest rate for the first 6 to 12 months and are most commonly either fixed or a discount off the standard variable rate and commonly involve smoke and mirrors to make them attractive. At the end of the honeymoon rate they revert to the standard rate offered by that lender. These home loans also tend to have a nasty bite if you want to leave them early and a nasty tail if you don't and we do not offer them through Mates Rates Mortgages.

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I

 

Installment

The regular payment that you agree to make to the lender. Also known as your repayment or minimum repayment.

 

Instrument

A legal document.

 

Interest

The lenders charge for the use of their funds or the money they pay as a return on deposited funds.

 

Interest Only Loan

A loan where you do not make any repayments against the loan balance (the principal) until the interest only period. This period is usually for a term of one to five years unless you have an evergreen line of credit.

 

Interest Rate

The amount of interest charged on a monthly loan payment; usually expressed as a percentage.

 

Introductory Loan

Introductory or "honeymoon" rate home loans offer a discounted interest rate for the first 6 to 12 months and are most commonly either fixed or a discount off the standard variable rate and commonly involve smoke and mirrors to make them attractive. At the end of the honeymoon rate they revert to the standard rate offered by that lender. These home loans also tend to have a nasty bite if you want to leave them early and a nasty tail if you don't and we do not offer them through Mates Rates Mortgages.

 

Investment Property

Property purchased for the purpose of earning a return on the investment, through rent (yield) and/or capital gain.

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J

 

Joint and Several Liability

Where all parties bear equal responsibility for a liability (usually a mortgage home loan) .

 

Joint Tenants

A type of multi party property ownership where each person has an equal share. Generally, if one party dies the property passes to the survivors unless over-ridden by a last will and testament. See also Tenants in common.

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K

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L

 

Land Tax

A State or Territory Government tax charged to the owners of property. Applicability and methods of calculation vary dependant on the location of your property. Further information is obtainable from the Department of Treasury or Office of State Revenue.

 

Legal Fees

These are usually charged where a solicitor is used to prepare Lender documentation and are rarely disclosed to you prior to the issue of a formal loan offer.

 

Lenders Mortgage Insurance (LMI)

Also abbreviated to Mortgage Insurance and LMI, this is a one-off premium paid by you under certain circumstances. This occurs mostly where the LVR exceeds 80%, however some lenders charge LMI regardless of the LVR. LMI insures the lender for any shortfall following foreclosure. The premium is only partially refundable and only in certain circumstances. The payment of LMI does not protect you from the Lenders Mortgage Insurer recovering any money paid to the lender following a shortfall in foreclosure. LMI can be many thousands of dollars and should be avoided if at all possible.

Read our special Lenders Mortgage Insurance article.

 

Levies

A contribution by strata title owners towards the insurance and upkeep of common areas. These are usually charged quarterly and can amount to a significant costs especially when added to council and water rates.

 

Liabilities

Your debts or obligations.

 

Lien

A parties right to hold property as security for a loan.

 

Line of Credit

This style of loan offers you a revolving line of credit. This allows you to use the funds for various purposes such as the purchase of a second property, shares or other investments.

 

Loan to Value Ratio (LVR)

The amount of your mortgage expressed against the value of your property as a percentage. Calculated as:
(Your Property Value - Your Equity)/Your Mortgage x 100

 

Low Start Loan

A loan where the initial repayments are low and increase over time. These are similar to honeymoon or introductory rate loans, however the increases occur over a number of years. These home loans also tend to have a nasty bite if you want to leave them early and a nasty tail if you don't and we do not offer them through Mates Rates Mortgages.

 

Low doc loans

Low documentation home loans are structured for people who don't have the documentation required to get home loans with more traditional qualification requirements. These loans are beneficial to people who suffer seasonal variations in income such as musicians.

 

Loan Fraud

Purposely providing incorrect information on a loan application which may result in civil liability in addition to criminal charges and penalties.

 

Loss mitigation

When the lender helps a borrower who has been unable to make loan payments and is in danger of defaulting on their loan to avoid foreclosure .

 

Lump sum repayments

Additional ad hoc repayments, made over and above your minimum repayment requirement.

 

LVR

The amount of your mortgage expressed against the value of your property as a percentage. Calculated as:
(Your Property Value - Your Equity)/Your Mortgage x 100

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M

 

Maturity Date

The day which your mortgage must be paid in full.

 

Maximum Additional Repayments

The maximum amount that can be paid over and above agreed repayments for your mortgage. This is a constraint most commonly associated with Fixed Rate home loans.

 

Maximum Loan Amount

The maximum amount that can be borrowed based on your situation and usually considers your income and expense profile, your deposit and the purchase price of the property.

 

Maximum Loan Value Ratio (LVR)

The maximum amount you can borrow expressed as a percentage of the valuation of the property you are buying and any additional security.

 

Maximum Term

The maximum duration that you can repay your home loan in. Most commonly 25 or 30 years.

 

Median

The median is the 'midpoint' when a list of values when they are arranged in ascending order. ie. if the values are 1,3,4,5,6,7,8 the median is 5.

 

Minimum Fixed Amount

The minimum amount that can be borrowed using a fixed rate home loan.

 

Minimum Loan Amount

The minimum amount that can be borrowed for the home loan.

 

Minimum Redraw Amount

The minimum amount that can be redrawn when you make additional repayments into your home loan and it has a redraw facility.

 

Minimum Repayment

The amount you are obliged to repay each month or fortnight in order to repay your mortgage within the agreed term.

 

Mortgage

A form of security for a loan usually taken over real estate property.

 

Mortgagee

The mortgage lender.

 

Mortgage Insurance

Also known as Lenders Mortgage Insurance and LMI, this is a one-off premium paid by you under certain circumstances. This occurs mostly where the LVR exceeds 80%, however some lenders charge LMI regardless of the LVR. LMI insures the lender for any shortfall following foreclosure. The premium is only partially refundable and only in certain circumstances. The payment of LMI does not protect you from the Lenders Mortgage Insurer recovering any money paid to the lender following a shortfall in foreclosure. LMI can be many thousands of dollars and should be avoided if at all possible.

Read our special Lenders Mortgage Insurance article.

 

Mortgagor

The person taking out the home loan.

 

Mortgage Broker

A Mates Rates Mortgage broker will save you time and worry, taking much of the loan risk out of the process by recommending products that should result in a successful loan application, protecting your Credit Rating from multiple enquiries. A Mates Rates Mortgage Broker will also manage much of the loan application through to settlement process for, letting you focus on other important matters, knowing that we have this one under control for you.

What's more, our Mates Rates Rebate ensures that you are getting one of the best rates around town from our great lenders.You should never accept or expect any mortgage broker to give you impartial mortgage advice as they are paid by the lender.

 

Mortgage Calculator

Different types of software used to calculate important information such as borrowing capacity and repayment costs. Mortgage calculators available on web sites should only ever be used as a rough guide as different types of income and many other factors influence the results. Mortgage brokers should have professional tools and access to different lenders credit policy to determine more accurate information for you.

 

Mortgage Protection Insurance

Not to be confused with Lenders Mortgage Insurance, Mortgage Protection Insurance is a policy offering repayment protection in case you fall ill or are made redundant. This is a very worthwhile insurance in the event that you do not have separate income protection insurance.

 

Mortgage Registration Fee

State or Territory Government charge for the registration of a mortgage on a property title.

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N

 

Negative Gearing

Where the income allocation from an investment is insufficient to meet expenses incurred on obtaining and holding the investment such as the interest costs of the loan used to purchase a property. You should talk with your accountant about whether this type of strategy is suitable for you before proceeding with this type of investment.

 

Non conforming loans

Non conforming loans are an umbrella set of products designed for people whose situation may fall 'outside the square' in terms of their borrowing. Non conforming lenders cater for applicants that have a poor credit history or high dependency on pensions, government allowances and maintenance, although standard lenders are more and more accepting these sources of income.

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O

 

Offset Account/ or Mortgage Offset Accounts

Offset accounts are transaction accounts that instead of earning interest on deposited funds, reduce the interest charged against your home loan, which in turn accelerates the rate of repayment of your mortgage and the overall cost. This is can be highly tax effective as you are not taxed on your savings (unless you are adopting a negative gearing strategy).

 

Ongoing Commission

Payments made to your broker after your loan settles. Also known as Trail commissions, they usually continue to be paid to the broker throughout the life of your loan subject to the terms and conditions of the lender's commission agreement. Trailing commissions account for a solid chunk of the actual cost of your loan and add up to tens of thousands of dollars. The Mates Rates Rebate is a monthly rebate paid out of the profits from these commissions to your home loan and will save you thousands of dollars.
 
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P

 

Passed In

A property is 'passed in' at auction if the highest bid fails to meet the reserve price set by the seller.

 

Payee

The person or entity who receives a payment.

 

Portability or Portable Loan

A mostly over-rated feature that allows you to sell your house and move to a new one without having to refinance. In some cases, this may save you money, however is most effective against Fixed Rate Home Loans where breaking early could cost you dearly.

 

Pre-approval or pre-qualification

Where a lender commits to offering you finance under certain terms and conditions. Pre-approval through Mates Rates Mortgages is simple and enables you to negotiate with more confidence.

 

Principal

The actual amount you borrow from a lender and on which interest is paid.

 

Principal and Interest Loan

A mortgage where each repayment consists of both principle and interest and your loan balance is reduced by the principle amount on each repayment.

 

Private Sale

The sale of a property without the involvement of a licenced real estate agent.

 

Private Treaty

A property sale where the buyer negotiates on a price set by the seller. The alternative to a private treaty sale is an auction. Also known as the purchaser, the buyer is the person or entity who intends to buy the property.

 

Purchaser

Also known as the buyer, the purchaser is the person or entity who intends to purchase a property.

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Q

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R

 

Rate Lock

May be used if you are applying for a Fixed Rate home loan. Lenders offer an interest rate lock that guarantees a maximum interest rate if the loan is settled within a specific time. Lenders may or may not charge for this feature and usually if interest rates fall prior to settlement, the lower rate will apply.

 

Real Estate Agent

The only Real Estate Agent you are likely to encounter is usually the person selling the property. The agent will show you through properties that you like; arrange copies of the contracts of sale for your conveyancer and help you out with your enquiries related to purchasing property. Stay mindful that the Agent works for and is paid by the person selling the property.

 

Real Estate Agents Opinion

An estimate made by a real estate agent of the likely selling price of a property. This is often confused with a valuation which is a more formal and costly process and the results are often different.

 

Reamortise

To alter repayments by amending the maturity date of your mortgage. Reamortising to a longer term will reduce your minimum repayments, whilst reamortising to a shorter term will increase your minimum repayments.

 

Redraw Facility

Redraw facility allows you access any additional repayments made on your mortgage.

 

Refinancing

Replace or change the maturity date of an existing home loan.

 

Reserve Price

The minimum price acceptable to a seller at auction. move up or down according to the fluctuations of material prices or wages.

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S

 

Security

An asset that a lender is able to register an interest in to hold as guarantee that your loan will be repaid.

 

Seller

A person or entity who intends to sell a property. Also often referred to as the vendor.

 

Settlement Date

The date that the buyer and seller finalise payment for the property and transfer title of the property.

 

Settlement Period

The period after contracts exchange and before settlement date. This period allows the buyer time to arrange finance and conduct any required searches, surveys and the like.The settlement period is agreed as a term of the sale and is usually between three and six weeks.

 

Soft Commission

Also known as kick backs, these are services, products or cash that different lenders offer to Brokers and may or may not relate to a specific loan arrangement.They are rarely disclosed and some brokers claim transparency by disclosing soft commissions over a value of say $300. Of course, they could receive that payment a thousand times and under their rules, would still not need to tell you about it. Mates Rates Mortgages discloses all commissions and all Mates Rates Mortgage Brokers receive the same commission regardless of which of our lenders you choose.

 

Split Loan

A combination of loan types under a single application. The most common version of the split loan is where you choose to take part of your borrowings as a fixed rate loan and the other part variable.

 

Stamp Duty

State and Territory Government charges on financial contracts and transactions. It is usually a percentage of the purchase or contract value.

 

Standard Variable Rate

The rate that lenders apply to their top end home loan products. Although advertised frequently and targeted by other lenders as a method of comparison, you will rarely pay the Standard Variable rate. Loans with such heavy interest charges are not available through Mates Rates, and our competitive range of products is substantially cheaper with the Mates Rates Rebate.

 

Strata Title

Probably the more common title associated with villas, town houses and home units and apartments. Ownership is based on a 'lot' which has a defined space and location. Common areas such as the building itself, driveways, gardens and the like or owned by all and the costs in maintaining these items are shared amongst all owners and charged in the form of levies.

 

Survey

A professionally prepared, scaled plan that shows the boundaries of a property and the positioning of any buildings and features on that property.

 

Switch

A loan feature that enables you to change between different products with a lender. Most commonly used to move from a Fixed Rate home loan to a Variable Rate mortgage or vice versa. Lenders usually charge a fee for using this feature, however it is ordinarily lower than the cost of completely refinancing.

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T

 

Tenants in common

A type of multi party property ownership where each person has an allotted share that may or may not be equal. See also Joint Tenants.

 

Term

The time taken to pay a home loan in full.

 

Title deed

An instrument defining and confirming ownership of a property.

 

Title Search

A search of public records to check ownership of a property. This is usually done to ensure that the seller has the right to sell a property.

 

Torrens Title

The more common type of ownership applying to non-strata land holdings.

 

Trail or Trailing Commission

Payments made to your broker after your loan settles. Trail commissions usually continue to be paid to the broker throughout the life of your loan subject to the terms and conditions of the lender's commission agreement. Trailing commissions account for a solid chunk of the actual cost of your loan and add up to tens of thousands of dollars. The Mates Rates Rebate is the rebating of 100% of this commission to you less a small administration cost. To find out more about the Mates Rate Rebate.

 

Transfer

An registered instrument that confirms a change of ownership.

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U

 

Unencumbered

A property free of registered liabilities and encumbrances.

 

Uniform Consumer Credit Code (UCCC)

Legislation governing the relationship between borrowers and lenders. The legislation is designed to protect your rights by requiring finance institutions, mortgage brokers and similar entities to act in a uniformly decent and proper manner.

 

Up Front Commission

Is money paid by the lender following settlement of your loan. Mates Rates Mortgages keeps this commission and that is how we continue to offer this great service, however we rebate much of our trailing commissions against your home loan which can save you thousands of dollars.

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V

 

Valuation

Also known as an appraisal, it is an estimate of a property's market value. Valuations are prepared by registered valuers. When requested by a lender, they are based on a rapid, low budget sale as would be the case in foreclosure. As a result, the value assigned is often lower than that of a real estate agents opinion.

 

Valuation Fee

A fee normally passed on to you for costs incurred valuing a security property.

 

Variable Rate Mortgage

A home loan where the interest rate and your repayments may vary through the life of the loan. The alternative is a Fixed Rate Loan.

 

Variation

A formal change to any part of a contract.

 

Vendor

A person or entity who intends to sell a property. Also often referred to as the seller.

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W

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X

[DONE]

 

Y

[DONE]

 

Z

 

Zoning

A local government authority categorisation that defines what a parcel of land can be used for.

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