A) Lenders Mortgage Insurance.

This is insurance that the borrower pays to cover the lender in the event that the borrower defaults on the loan and the sale of the property does not cover the outstanding debt. 

A) The amount of a property actually “owned” by the owner. It’s the current value of a property less the amount still owed on its mortgage.

A) No. 

Formal Approval is the stage when all outstanding conditions have been satisfied and the loan is fully approved. However, is when the final balance of the purchase price and any adjustments are paid to the seller/vendor. The purchaser then becomes the legal owner of the property and receives the keys/right to access the property.

A) False

Principle & Interest is a repayment option whereby a portion of the principal loan amount is repaid along with the interest charged on the loan over the agreed term of the loan.

A) This is a savings or transaction account that is linked to a loan. A full offset facility is where interest is only charged on the net balance between the savings/transaction account and the loan account. A partial offset facility is where the interest earned on the savings/transaction account is offset or reduced by the interest owing on the loan.

A) This depends on the contract. An amount paid by the buyer at the time of exchanging the contract for sale. It acts as a commitment to buy. This is usually between 5% – 20% of the property value.

A) Loan to Value Ratio.

This is expressed as a percentage and is calculated by dividing the loan amount by the value of the related property. 

A) Brokers receive a commission from the lenders. This compensation will vary depending of the lender as well as the size of the transaction. Our service to you is free but other fees may apply. Fox example, you may have to pay fees and charges to the lenders as set out in the loan contract or lease. 

A) False.

Establishment fees are charged by a lender to cover the cost of setting up a loan.

A) First Home Owners Grant.

A grant from the Federal and State Governments. It was introduced as compensation for the increased cost of housing.

A) Security is an asset that a borrower gives a lender the rights to – so the lender can be confident of getting the money back, one way or another if the debt is not re-payed as per the loan agreement.

A) Conditional Approval is when a loan application has been approved subject to given terms and conditions that MUST be fulfilled prior to unconditional approval being issued. Formal Approval is when all outstanding conditions have been satisfied and the loan is fully approved.

A) A finance broker negotiates with banks, credit unions and other credit providers on your behalf to arrange a loan fitted to your needs. 
A mortgage broker is someone who specialises in home loans, however there are also finance brokers that can offer you a variety of loan options from car to asset finance.
Brokers will select a loan that they believe to be most beneficial for you and manage the whole process. this means all the hard and confusing paper work is completed by your broker and all the worry of obtaining a mortgage is eliminated. 

A) A person or organisation that agrees to be responsible for the payment of a loan – if the actual borrower defaults or is unable to pay.

A) To refinance means to switch mortgage providers and arrange a new loan for the same property.