Home Loan Glossary
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Home Loan Glossary
Conditional Approval
Conditional Approval is granted by the lender when the loan meets the
requirements subject to some stated conditions being satisifed.
Credit Rating
During our assessment of any loan application we will, after obtaining your
signed consent, run a credit report on you. This will tell us your credit
rating, enabling us to determine which products you qualify for.
Deposit
This is the amount of your own funds that you put down on a property purchase.
With certain loan products there may be stipulations as to the source of this
Deposit such as it being from Genuine Savings
Loan To Value
This is a percentage figure given to the amount of the loan against the value of
the security property. For example, a $400,000 loan against a $500,000 security
property is an 80% Loan to Value.
Mortgage Insurance
This type of lenders insurance guarantees a full recovery of any loan amount,
plus costs, should the borrower default on the loan and the property is
repossessed. Please note, that any Lenders Mortgage Insurance protects the
lender and not the borrower.
Principal and Interest
You can make your payments to your loan in one of two forms, either Interest
Only or Principal and Interest. With the Principal and Interest method the
payments are mathematically calculated so that if you make that payment over the
term of the loan, and the interest rate does not change, you will pay off the
whole loan on the end date of the loan. You are thus paying not only the
interest but also a portion of the Principal amount borrowed with each payment.
Settlement
This is the day that the funds are actually handed over for the purchase of the
property. If it is a re-finance then the settlement date is the day that the
funds are Drawndown from the new lender or the additional funds are released if
it is an existing lender with a Further Advance.
Stamp Duty
A government tax on purchasing property or land. It is payable to the government
on or prior to Settlement and forms part of the Funds to Complete. If the
borrower qualifies for the First Home Owners Grant they may also be entitled to
a reduction in their stamp duty payable. Although this varies state to state.
Unconditional Approval
Unconditional Approval is granted by the lender when the loan has satisifed all
stated conditions.
Valuation Report
With the vast majority of loan applications part of the criteria is that the
security property passes a valuation report. These tend to be carried out by
Independent valuers. They will value the property based on their own experiences
and judgment, and recent sales in the area.
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