Agent
A licensed professional who represents buyers or sellers in real estate transactions.
Amortisation Period
The length of time over which a loan is repaid in regular installments, including both principal and interest.
Appraisals
An estimate of the value of a property, typically performed by a licensed valuer.
Bridging Finance
A short-term loan used to finance the purchase of a new property before the sale of an existing property.
See our short term bridging loans page.
Broker
A licensed professional who helps borrowers find and obtain mortgage loans from lenders.
Buyer's Market
A market condition in which there are more properties for sale than there are buyers, resulting in lower prices and more negotiating power for buyers.
Caveat
A legal notice that warns potential buyers or financiers of a property that someone else has an interest in it.
Caveat Loan
A loan secured against the equity in a property, typically used to provide short-term funding.
See our fast caveat loans page.
Certificate of Title
This is a document that confirms the ownership of a property and any encumbrances or restrictions on its use. It is issued by the government and contains a unique title reference number that is used to identify the property.
Collateral
Collateral refers to an asset that is pledged as security for a loan. In the context of real estate, collateral may include a property or other assets that are used to secure a mortgage loan.
Conditions of Sale
The terms and conditions under which a property is sold, typically specified in the contract of sale.
Conditional Offer
An offer to purchase a property that is contingent upon certain conditions being met, such as obtaining financing or a satisfactory property inspection.
Conveyancing
The legal process of transferring ownership of a property from the seller to the buyer.
Contract of Sale
A legal document that outlines the terms and conditions of a property sale, signed by both the buyer and seller.
Cooling Off Period
A period of time, typically 3-5 business days, during which a buyer can cancel a contract of sale without penalty.
Deposit
A sum of money paid by a buyer as part of the purchase price, typically held in trust until settlement.
Early Deposit Release
Early deposit release refers to the release of a deposit before the settlement date. This may occur if the buyer needs to access the funds for a legitimate reason, such as to pay for moving expenses or to make repairs to the property. Early deposit release is subject to the terms and conditions of the sales contract and the agreement of both the buyer and the seller.
Easement
A right of use over someone else's property, such as for access or utility services.
Equity
The difference between the value of a property and the amount owed on any loans secured against it.
Estate Agent
A person or company that represents a property owner in the sale or rental of their property.
Fair Market Value (FMV)
The price at which a property would sell in an open and competitive market, based on current market conditions.
Home Equity Loan
A home equity loan is a type of loan that allows homeowners to borrow against the equity they have built up in their homes. Equity is the difference between the current market value of the home and the outstanding balance on any existing mortgage. Home equity loans can be used for a variety of purposes, such as home improvements, debt consolidation, or other major expenses. The loan is secured by the borrower's home and typically has a fixed interest rate and a set repayment term.
Loan to Value Ratio, or "LVR"
The loan to value ratio (LVR) is a financial term used by lenders to express the ratio of a loan to the value of the asset being purchased. In the case of real estate, the LVR is the ratio of the loan amount to the appraised value or purchase price of the property, whichever is lower. Lenders use LVR to determine the risk of a loan, and generally, the lower the LVR, the less risk involved for the lender.
Loan-to-Value (LTV)
Loan-to-value (LTV) is a financial ratio that compares the amount of a loan to the value of the asset being purchased. In real estate, LTV is commonly used by lenders to determine the risk of a mortgage loan. The LTV ratio is calculated by dividing the loan amount by the appraised value or purchase price of the property, whichever is lower. A higher LTV ratio indicates a higher risk for the lender, as there is less equity in the property to act as a buffer against default.
Lenders Mortgage Insurance, or "LMI"
Lenders mortgage insurance (LMI) is an insurance policy that is required by lenders when a borrower has a high LVR ratio, typically above 80%. LMI protects the lender in the event that the borrower defaults on the loan and the sale of the property does not cover the outstanding balance of the loan. The cost of LMI is usually added to the loan amount, and the borrower is responsible for paying the premium. LMI is a one-time expense and is not refundable.
Pre-Settlement Advance
A pre-settlement advance is a loan provided to a home seller(vendor) to cover expenses related to the purchase of a property, such as via auction or as a deposit, before the settlement date. The loan is typically repaid at the time of settlement, when the buyer receives the proceeds from the sale of the property. Pre-settlement advances are usually provided by specialist lenders and are subject to interest charges and fees.
See our pre-settlement loans page to learn more - it's what we do best!
Private Sale
A private sale is a real estate transaction where the property is sold without the use of a real estate agent or broker. Private sales can occur when the buyer and seller are acquainted with each other, or when the seller chooses to sell the property on their own. Private sales are typically less expensive than sales that involve a real estate agent, as the seller does not have to pay agent fees and commissions.
Property Title
A property title is a legal document that proves ownership of a property. It includes information about the property such as its boundaries, any easements or restrictions on its use, and the name of the owner.
Refinance
Refinancing is the process of obtaining a new mortgage to replace an existing one. Refinancing can be done to obtain a lower interest rate, to switch from a variable to a fixed rate mortgage, or to obtain cash from the equity in the home. Refinancing typically involves paying off the existing mortgage and starting a new one with different terms and conditions. Refinancing can be a good option for homeowners who want to reduce their monthly mortgage payments or pay off their mortgage sooner.
Reverse Mortgage
A type of loan for homeowners, particularly retirees, that allows them to borrow money based on the equity they have in their home. The loan does not have to be paid back until the homeowner either passes away or sells the property, although interest does accrue over time.
Section 27 Deposit Release
A legal document that allows a purchaser to release the deposit paid for a property before settlement, typically when the purchaser is unable to settle due to unforeseen circumstances. The seller must agree to the release, and it is typically used as a last resort.
See early deposit release for more details.
Seller's Market
A real estate market where there are more buyers than properties for sale, giving sellers the upper hand in negotiations and often resulting in higher prices for properties.
Settlement
The final stage of a property sale where ownership of the property is transferred from the seller to the buyer. The buyer pays the balance of the purchase price, and the seller hands over the title and keys to the property buyer.
Settlement Date
The date on which the settlement of a property sale is scheduled to occur. It is typically specified in the contract of sale and agreed upon by both the buyer and seller.
Settlement Funds
Refers to the funds required to complete the purchase of a property. These funds are usually paid on or before the settlement date and cover the balance of the purchase price after the deposit has been paid.
Strata
A term used to describe the ownership structure of a multi-unit complex where each owner owns a portion of the property, such as an apartment, as well as a shared interest in the common property, such as the building's common areas.
Unconditional Approval
The lender's confirmation that a borrower has met all of the conditions required to receive a loan. It indicates that the lender has approved the borrower's application and is willing to provide the loan, subject only to the borrower meeting any final conditions, such as signing the loan agreement.
Unconditional Offer
An offer to purchase a property that is not subject to any conditions, such as finance or building inspections. It is a binding offer that, if accepted, means the purchaser is committed to buying the property regardless of any issues that may arise.
Valuation
The process of determining the value of a property for the purpose of a sale or mortgage. It is typically carried out by a licensed valuer who considers a range of factors, such as the property's location, size, condition, and recent sales of comparable properties in the area.
Vendor
The person or entity who is selling a property. They are responsible for preparing the property for sale, setting a price, and entering into a contract with a purchaser for the sale of the property.
Vendor Paid Advertising
Advertising that is paid for by the vendor (seller) of a property rather than the real estate agent. Vendor paid advertising can include a range of marketing activities, such as print and online advertising, signage, brochures, and property videos. The vendor may choose to pay for advertising in order to increase exposure for the property and attract more potential buyers. The cost of vendor paid advertising is typically negotiated between the vendor and the real estate agent and included in the overall commission or fee paid to the agent for their services.
Via our parent company, Settlement Advances can also offer vendor paid advertising loans. Our VPA loans are available up to $30,0001 and can cover additional costs involved at this time, such as property repairs, staging and moving costs.
