| A |
| ABA
|
(Australian
Bankers’ Association) |
| acceptance |
to agree to
the terms of an offer or contract. |
| accrued |
interest you
have earned or incurred that is yet to be paid or charged. |
| adjustments |
the process
of allocating expenses (Council, electricity, phone, water
rates) on settlement day that the seller has paid for but
not used, and which the buyer has not used but will be billed
for. |
| agent |
person or
body authorised to act on behalf of a client in the sale,
purchase or management of property. |
| allotment |
a block of
land created out of a larger area. |
| amortisation
period |
the period
of time one has to repay a loan at the arranged terms. |
| application
fees |
fees charged
to cover or partially cover the lender’s internal costs
of setting up a loan approval for a home buyer. |
| appraised
value |
estimate of
the value of a property being used as security for a loan. |
| appreciation |
an increase
in value, for reasons such as heavy demand, of an asset, such
as an exisiting property or a block of land. |
| annual
percentage rate |
(APR) the
annual effective rate of the mortgage which is made up of
the interest rate, fees and charges that incur during the
contract period. |
| arrears |
an overdue
account yet to be paid. |
| assets
|
money, property
or goods owned. |
| at
call |
a bank account
from which money can be withdrawn immediately. |
| ATM |
(Automatic
Teller Machine) |
| auction |
public sale
of property with ownership going to the highest bidder, subject
to a reserve price being reached. |
| B |
| BAD |
(Bank Account
Debits tax) State or Territory government tax (except ACT)
on withdrawals from accounts on which a cheque may be drawn. |
| bad
debt |
a debt with
little chance of being recovered and written off as a loss. |
| balance
sheet |
a statement
of assets, liabilities and net equity for an enterprise at
a point of time. |
| balloon
payment |
a large loan
repayment to clear a debt. |
| bank
cheque |
a cheque that
draws money specifically from funds you own held in a bank. |
| banker’s
opinion |
enquiries
made from one bank to another to check on a customer’s
reliability or credit worthiness. |
| bankruptcy |
when a debtor
has his/her estate placed into the hands of a receiver who
has the responsibility for its distribution. |
| bearer |
person presenting
a cheque to a bank. |
| bill
of sale |
a written
agreement whereby ownership is transferred but the original
owner is allowed to retain possession. |
| body
corporate |
a corporation
of the owners of units within a strata building. They form
a self-elected council for the management of the building
and common areas. |
| bond |
money, paid
by a tenant, held as "insurance’ against that tenant
damaging a property, or not paying the rent. |
| boundary |
the "fence",
real or on paper only, which separates two adjoining properties |
| bridging
finance |
a short-term
loan that covers a financial gap between the purchase of a
new property and the sale of an old property. |
| building
regulations |
the standards
formulated by local councils to control the quality of buildings. |
| C |
| capital |
the current
value of your long-term assets - house, property or business. |
| capital
gain |
the monetary
gain obtained when you sell an asset for more than you paid
for it. |
| Capital
gains tax |
a Federal
tax on the monetary gain made on the sale of an asset bought
and sold after September 1985. |
| capped
loan |
a loan where
the interest rate is not allowed to exceed a set level for
a period of time, but unlike fixed rate loans, is allowed
to drop. |
| caveat |
the Latin
for ‘beware’. Usually it is in the form of a contract
clause that stipulates a particular requirement. |
| Caveat
emptor |
Latin for
‘let the buyer beware’, or in Australian ‘you
pays your money and you takes your chances’.... |
| Certificate
of Title |
this document
details the land dimensions and ownership details, and whether
there are any encumbrances on it. |
| chattels |
chattels are
personal property. There are two types. Real chattels are
buildings and fixtures. Personal chattels are clothes and
furniture. |
| cluster
housing |
group of houses
that share common space. |
| cooling
off |
the period
of time after contracts have been exchanged during which a
contract may be cancelled. Usually five working days. |
| commission |
a fee payable
to the real estate agent, by the vendor, for the sale of property. |
| Common
Law Title |
see
Old System Title |
| common
property |
an area used
by many, not an individual. Owned by the tenants in common. |
| Community
Title |
this form
of title gives a purchaser shared ownership of common facilities
as well as Torrens Title over a specific lot. |
| company
title |
a property
title that applies when owners of units in a block form a
company. |
| comparison
rate |
a nominal
rate per annum together with the compounding frequency as
outlined in the Consumer Credit Code. |
| compound
interest |
interest that
is paid on both the accumulated interest as well as on the
original principal. |
| Consumer
Credit Code |
an act of
Parliament governing the relationship between borrowers and
lenders. |
| contract
of sale |
a written
agreement outlining the terms and conditions for the purchase
or sale of property. |
| conveyancing |
the legal
process for the transferral of ownership of real estate. |
| countersigned |
additional
signature or signatures to guarantee the validity of a document. |
| covenant |
terms and
conditions that specify the usage of a block of land or the
buildings on it. |
| cover
note |
a note of
temporary property insurance before the implementation of
a formal policy. |
| CRAA
|
(Credit Reference
Association of Australia) the body which holds credit details
on all of us! |
| credit |
borrowed money
to be paid back under an arrangement with a lender. Also,
a sum of money paid into an account. |
| credit
limit |
maximum amount
the borrower can use at any one time. |
| creditor |
a party to
whom money is owed. |
| crossed
cheque |
a cheque with
two parallel vertical lines across it to specify that the
cheque must be paid into an account and cannot be cashed. |
| D |
| daily
interest |
interest calculated
on a daily basis - therefore varies according to daily account
balance. |
| debit |
an account
entry to charge a withdrawal to a specified account. |
| debtor |
someone who
owes money to someone else. |
| deed |
a legal document
that states an agreement or obligation regarding a property. |
| default |
failure to
meet debt payment on a due date. |
| deposit
|
the amount
paid by a buyer when contracts are exchanged. It is usually
ten per cent of the agreed selling price. |
| E |
| early
termination payment |
the
cost of winding up a loan early. |
| easement
|
a right to
use a corridor or passage of land which is owned by another. |
| EFT |
(Electronic
Funds Transfer) electronic transfer of funds from one account
to another. |
| encumbrance |
an outstanding
liability or charge on a property. |
| endorse |
to sign the
back of a cheque to confirm or transfer its ownership to someone
else. |
| equity |
the amount
of an asset actually owned. |
| equity
loan |
a loan usually
secured by the proportion of the value of your house which
you own. |
| equity
mortgage |
a loan secured
by the part of the value of an asset (usually house) which
you own. |
| ERIC |
(Effective
Rate of Interest plus Costs) |
| establishment
fees |
lending body
fees which may or may not be charged to set up a loan. |
| ETIA |
(Early Termination
Interest Adjustments) |
| exchange
of contract |
the legal
point of time when the vendor and purchaser swap documentation
and start enquiries with a view to settlement. |
| F |
| FID |
(Financial
Institutions Duty) state duty on the receipts of financial
institutions. |
| fittings |
items that
can be removed from a property without causing damage to it. |
| fixed
interest |
an interest
rate set for an agreed term. |
| fixtures |
these are
items that would cause damage to a property if removed. Their
removal must be stipulated in the contract of sale and any
damage made good by the seller. |
| freehold |
the dwelling
and the land on which it stands is owned by the owner indefinitely. |
| free
standing |
a building
which is unattached to any other and shares no common wall
or walls with any other building. |
| frozen
account |
an account
in which all transactions have been suspended. |
| G |
| garnishee |
to legally
divert a part or whole of someone’s money or property
to someone else. |
| gearing |
the ratio
of your own money and borrowed funds in an investment. |
| guarantee |
a promise
made as bound by the terms of a contract. |
| guarantor
|
a party who
agrees to be responsible for the payment of another party’s
debts. |
| H |
| high
start loan |
a loan where
the initial repayments are high and decrease over the term
of the loan. |
| highest
bid |
the top price
offered by a bidder at auction. If the reserve price is not
reached and the property is passed in, the highest bidder
is given the first option to negotiate with the vendor. |
| holding
deposit |
a refundable
deposit based on the goodwill of the buyer to go ahead with
the purchase. |
| home
unit |
otherwise
known as a ‘flat’ or an ‘apartment’, a
home unit is grouped with other residential dwellings and
shares common areas (such as stairs and driveways) with the
others. |
| I |
| ILR
|
(Indicator
Lending Rate) the base rate on which interest rates for variable
rate overdrafts and term loans are set. |
| inclusions |
items included
with the property eg light fittings, fridge, etc. |
| income
statement |
a statement
of income and expenditure for a period, usually a year. |
| interest
|
the lending
body’s charge for the use of funds or the return on deposited
funds. See daily interest and monthly interest. |
| interest
only |
usually a
short-term arrangement whereby payments are made on the interest
only, not the principal. |
| interest
only loan |
a loan where
the principal is paid back at the end of the term and only
interest is paid during the term. The loans are usually for
a short term of one to five years. |
| internal
rate of return |
a measure
of the return on an investment (or loan) which takes into
account the time value of money by showing the rate of interest
at which the present value of future cash flows is equal to
the cost of the investment or loan. |
| inventory |
a list of
items included with the property e.g. furniture, movable items,
etc. |
| J |
| joint
tenants |
equal holding
of property between two or more persons. If one party dies,
their share passes to the survivor/s. |
| L |
| land
tax |
a State Government
tax charged to the owners of any property over a stipulated
value, unless it is their principal place of residence. |
| lease |
a document
granting a period of tenancy of a property under specific
terms and conditions. |
| lessee |
the person
or company who, through signing an agreement, leases a property
from its owner, known as the lessor. |
| liabilities |
someone’s
debts or obligations. |
| lien
|
the right
to hold property as security against a debt or loan. |
| line
of credit |
a flexible
loan arrangement with a specified ceiling to be used at a
customer’s discretion. |
| loan
security duty |
mortgage stamp
duty. |
| loan
to valuation ratio |
(LVR) the
ratio of the amount lent to the valuation of the security
(usually the house). |
| low
start loan |
a loan where
the initial repayments are low and increase over time. |
| M |
| margin |
this is the
difference between the lender’s interest indicator rate
(or other reference rate) and the rate actually charged to
borrowers. |
| maturity |
the date a
debt or investment must be paid in full. |
| mortgage |
a form of
security for a loan usually taken over real estate. The lender,
the mortgagee, has the right to take the real estate if the
mortgagor fails to repay the loan. |
| mortgage
offset |
a non-interest
earning account that is offset against a home loan to reduce
the total interest payable. |
| mortgagee |
the lender
of funds. |
| mortgagor |
the person
borrowing money in the terms of a mortgage. |
| N |
| negative
gearing |
where the
return on an investment is insufficient to meet the interest
costs of the loan used to fund the investment. |
| O |
| offer
to purchase |
a legal agreement
that details a specific price for the purchase of a specific
property. |
| offset
account |
a savings
account linked to your mortgage in such a way that the interest
earned on your savings is applied to reduce the interest on
your mortgage. |
| Old
System Title |
(common law
title) consists of a ‘chain’ of the title documents
stretching back to the original owner. |
| option
to buy |
a legally
binding document which gives a person, for a fee, the right
to buy something usually within a specific time frame at a
specific price. |
| overdraft |
a pre-arranged
limit to which a person can exceed an account balance. |
| P |
| passed
in |
a property
is ‘passed in’ at auction if the highest bid fails
to meet the reserve price set by the vendor. |
| payee |
the person
or entity to which a cheque is payable. |
| plan |
detailed illustration
of a house that shows the internal layout and dimensions and
the position of the house on the land. |
| principal |
the capital
sum borrowed on which interest is paid. |
| principal
and interest loan |
a loan in
which both the principal and the interest are paid during
the term of the loan. |
| private
sale |
the sale of
a property without an estate agent. |
| private
treaty sale |
a property
sale where the buyer negotiates on a price set by the seller. |
| property
management |
the act of
looking after a property on behalf of its owner. |
| R |
| refinancing |
to replace
or extend an existing loan with funds from the same institution
or another. |
| requisitions
on title |
a process
by which the buyer requests additional information about the
title of the property from the seller. |
| reserve
price |
specified
minimum price acceptable to a seller at auction. |
| right
of way |
can be either
somebody’s right to cross other property or a general
pathway across your land. |
| rise
and fall clause |
a building
contract clause that allows the final pricing to move up or
down according to the fluctuations of material prices or wages. |
| S |
| search |
an examination
to confirm that a vendor is in a position to sell a property
and that there are no encumbrances on it. |
| security |
an asset that
guarantees the lender their borrowings until the loan is repaid
in full. Usually the property is offered to secure the loan. |
| semi-detached |
two houses
that share a common wall or walls. |
| settlement
date |
date on which
the new owner finalises payment and assumes possession. |
| signatory |
a person authorised
to utilise an account. |
| stamp
duty on transfer |
a State Government
tax assessed on the selling price of the property. |
| stepped
|
a stepped
account is one in which different amounts of interest are
paid on different portions of the account. e.g. 2 percent
on the first $1,000 and 3 percent on the second $1,000. |
| Strata
Title |
this title
gives you ownership of a ‘unit’ of a larger building
which you may sell, lease or transfer at your discretion.
Also entitles you to membership of the body corporate. |
| Stratum
Title |
a title that
records your ownership of a ‘unit’ of a larger property.
Unlike a Strata Title, the owner becomes a shareholder in
the company that manages the common area, not just a member. |
| survey |
a plan that
shows the boundaries of, and the building position within,
a block of land. |
| susceptibility
report |
shows likelihood
of future pest infestations. |
| T |
| tenants
in common |
the equal
or unequal holding of property by two or more persons. If
one party dies, the property is divided according to law. |
| term |
the length
of a home loan or a specific portion within that loan. |
| term
deposit |
often called
a fixed interest account - a type of savings account where
the size of the deposit, the interest rate and the length
of time the money is deposited for are all fixed. |
| terrace |
a style of
attached house found in many older suburbs. In a row of terraces,
virtually identical houses are joined one to another through
common walls. Often two or more storeys in height. |
| title
search |
process to
ensure that the vendor has the right to sell and transfer
ownership. |
| Torrens
Title |
records your
ownership of a piece of property. You are lawfully entitled
to lease, sell or dispose of the property as you desire. Also
known as Certificate of Title. |
| town
house |
usually a
two storey dwelling registered under a strata title. |
| transfer
|
a document
registered with the Land Titles Office that confirms the change
of ownership as noted on the Certificate of Title. |
| U |
| unencumbered |
a property
free of liabilities, encumbrances or restrictions. |
| V |
| valuation
|
a report as
required by the lender, detailing a professional opinion of
the property’s value. |
| variable
interest rate |
a rate that
varies in accordance with the rates in the marketplace. |
| vendor |
party who
offers a property for sale. |
| vendor
statement |
a statement
by the seller to the buyer detailing material particulars
regarding the property in question. |
| villa |
an attached
dwelling, one storey in height. |
| Z |
| zoning |
local authority
guidelines as to the permitted uses of land. |