If you are unclear of any term, you should seek a satisfactory explanation for the relevant experts or authorities.

AAPR Average Annualised Percentage Rate. Sometimes referred to as the Compulsory Comparison Rate, this figure takes into account the other costs associated with the loan, and expresses them as an average interest rate, to create a level field with which to compare similar loan product interest rates.

Acceptance Agree to the terms of an offer or contract.

Additional Repayment Extra funds paid into the loan in addition to the minimum monthly payments.

Affordability The ratio of average household disposable income to income required to meet payments. The higher the number, the more affordable property is.

Agent Real Estate Agent. Person/body authorised to act on your behalf in the sale, purchase or management of property.

All-in-one Loan Allows you to deposit all of your income into the loan account and then withdraw money form that account for day-to-day transactions. The longer spare funds say in the account, the greater the interest savings.

Amortisation Period The period of time a loan is calculated over (and repaid).

Application Fee The fee charged by a lender to cover or partially cover the lender's costs of setting up or establishing the loan.

Appraised Value Estimate of the value of a property being used as security for a loan.

Arrears An overdue account yet to be paid.

Assets Money, property or goods owned.

Asset Lender Lender institution that lends finance based on the value of the asset, which will be held as a security.

Assignment Legal transference of a right or a title to a property to another property

Banker's Lien The right of the Bank to retain a customer's securities until a liability to the Bank is Discharged (See also 'General Lien').

Basic Variable A variable home loan at a reduced rate fewer features than a standard variable.

Bankruptcy The legal financial state an individual is in when unable to meet debts (for companies it's known as being 'wound up'). A debtor may be declared bankrupt by the Federal Court; at either the debtors' or the creditors' instigation; and, the debtor's estate will be placed in the hands of an official receiver who will distribute the estate in accordance to the provisions of the Bankruptcy Act.

BayCorp Ltd The company which holds credit information on everyone, such as loan applications, credit defaults, and so on. Originally known as CRAA, and may often be referred to as the 'CRAA Check'.

Body Corporate A management corporation of the owners of units within a building which manages the building and common areas.

Borrower A person, persons, or entity borrowing money to purchase, payoff, or refinance a product or effect.

Break Costs Incurred when a loan is paid off before the end of its term.

Bridging Finance Enables you to cover the purchase of a new property when you are yet to sell your existing property.

Buyer's Agent Person to act on behalf of the buyer to find and negotiate on properties the buyer wishes to buy.

Capital The current value of your assets, including car, property, business, money, etc.

Capital Interest (Maximum %) The percentage maximum of a borrower's credit limit which can be used to accumulate interest before repayments must be made.

Capital Gain The financial gain you get when you sell something for more than you bought it. May be subject to capital gains tax, this is paid on the gained amount.

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 A notice of warning given to a public authority, e.g. Titles Office, claiming entitlement to an interest in certain land. The caveat is registered and remain on the books as a warning to everyone who contemplates dealing with the property. It therefore prevents any action being taken without the previous notice of the person entering the caveat (the caveator).

Certificate of Title Details the land dimensions, encumbrances and ownerships details of a property.

Charge (over property) The term used to describe any right established over a borrower's property to secure a debt or performance of an obligation.

Collared Rate Variable rate loan with a set upper and lower limit beyond which the interest rate cannot move past.

Collateral Security Additional or supporting security given in addition to the principle security.

Combination Loans Various loans come under the same banner to form one loan. Also know as split loans.

Comparison Rate Schedule See CRS.

Compulsory Comparison Rate Or CCR, is the figure expressed as an interest rate that takes into account some of the extra costs of a loan product. The formula used to calculate the CCR is regulated by the Uniform Consumer Credit Code and all Australian lenders are required to use the same formula.

Construction Loans Specifically granted for the purpose of building a new dwelling. You are generally able to draw money as required.

Consumer Credit Code Legislation designed to protect the rights of the individual (personal consumer) by ensuring banks and other financial institutions all adhere to the same rules when providing personal, domestic or household credit. It should provide borrowers with complete and honest information. Also known as the Uniform Consumer Credit Code or UCCC.

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 or ownership of real estate.

CRAA Credit Reference Association of Australia the Company which used to record and hold credit information on everyone. Changed its name to 'Credit Advantage limited' and more recently BayCorp Ltd.

Credit Advantage Limited See CRAA.

Credit Limit Maximum amount the borrower can use a any one time.

CRS Comparison Rate Schedule. The schedule displayed by a lender that gives the annual percentage rate and the respective Comparison Rate, for the lender's loan products for specific amounts over specific terms.

Daily Interest Interest calculator on a daily basis - varies according to daily account balance.

Debtor Someone who owes money to another and can be compelled to perform an obligation.

Deed A document in writing, which is signed, sealed and delivered by the parties thereto, to prove and testify the agreement of the parties whose deed it is, to the things contained in the deed.

Default Failure to meet debt payment on a due date.

Default Rate The rate a loan rolls/moves to automatically at the end of any at the end of any fixed period.

Deferred Establishment Fee Is charged when you pay out your loan within a short period of taking it out, such as three years.

Deposit Bonds Guarantees that the purchaser of a property will pay the full deposit by the due date.

Depreciation The accounting practise where the cost of a fixed asset of a business is spread over the life of the asset. Depreciation is a non-cash expense that allows the money to be retained by the business, thus technically allowing the business the capacity to replace the asset over time.

Direct Debit Where the Lender debits (deducts) a payment from client's bank, credit union or building society account.

Disbursements Solicitors incidental costs involved when dealing with client on behalf of the Lender, e.g. searches, certificates pest reports, etc.

Draw Down Act of transferring money from lending institution to the borrower after the loan has settled

DSR Debt Service Ratio.

Encumbrance A charge or liability, e.g. a mortgage.

End Loan The loan amount you are left with after you have sold your existing home and paid proceeds towards your bridging loan.

Equity Generally used to denote the financial interest of a person in a property or business enterprise, e.g. a person's equity in his/her house is the difference between its value and the amount still owed to a Lender. A person's overall equity refers to his/her net financial worth, or the difference between what he/she owns and what he/she owes (i.e. Assets - Liability = Equity)

Equity Loan A loan usually secured by the value of equity you hold in your house.

Establishment Fee Fees that may or may not be charged to set up a loan.

Estate An interest in land.

Exchange The legal point of time when the vendor and the buyer swap documentation with a view to settlement.

Evergreen (Line of Credit) Also known as Line of credit. A loan arrangement with specified credit ceiling to which funds are drawn down.

Fee Simple The estate in fee simple is the highest estate in the land, and it is the closest the law comes to recognising absolute ownership for all practical purposes. However, while we refer to a proprietor of an estate in fee simple (who is the owner for all practical purposes), their ownership is not legally absolute, for absolute legal ownership of all rests with the Crown.

Fittings Items that can be removed from a property without causing damage to it e.g. carpet and cutins.

Fixed Interest (Fixed Rate) An interest rate set for an agreed term.

Fixtures Items that would cause damage to a property if removed. Their removal must be stipulated in the contract of sale, and damage made good by the seller, e.g. oven and bath, etc.

Freehold The dwelling and the land on which it stands which is owned by the owner indefinitely.

Garnishee Order A court order taken out by a creditor on a person's employer or banker for the deduction of funds from his wages or bank account to repay a debt.

Gearing The ration of your own money and borrowed funds in an investment.

General Law System System whereby all dealing on a property are made in the form of conveyances, whether the transaction is a sale, a mortgage, a re-conveyance, etc. Under this system the mortgage is in fact a transfer of ownership. When a conveyance is prepared it forms part of the chain of title and must be carefully preserved in order to proves to "root" of the title.

General Lien Sets our in writing the Bank's right to retain property until a debt is paid. Includes Power of Attorney and other clauses generally contained in Ban security forms.

Government Fees State and government charges at the time of settlement, e.g. stamp duty.

Gross Income/Profit Income from a person or company, before tax, superannuation or payroll deductions.

Guarantee A promise made as bound by the terms of a contract.

Guarantor A person/s who agrees to be responsible for the payment of another persons loan.

Holding Deposit A refundable deposit based on the goodwill of the buyer to go ahead with the purchase.

Indemnity Security against damage or loss; sum paid in compensation for loss incurred.

Instrument Formal legal document in writing, e.g. a deed of conveyance.

Interest The Lender's charge for the use of funds or the return on deposited funds.

Interest Adjustment This may be charged to compensate the lender for loss of interest revenue when additional repayments are made on a fixed loan.

Interest Only Loans A loan where the principle is paid back at the end of the term and only interest is paid during the term. These loans are usually for a short period of time, typically 1 to 5 years.

Introductory Loan A loan offered at a reduced rate for an introductory period (usually no longer than 15 months) to new borrowers.

Joint and Several Liability The Bank's joint account authorities, guarantee forms, etc, are framed to ensure that joint account holders with debts due to the Bank of joint guarantors liable to the Bank shall be severely liable, (i.e. individually), as well as jointly. With Joint and Several Liability a creditor has as many rights of action as there are debtors; he can sue them jointly or severally until he has obtained payment, and an unsatisfied judgement against one debtor will not be a bar to an action against the others.

Joint Tenancy Property in the name of two or more persons, where all personas have an equal interest in the whole property. When one person dies his interest passes to the survivors (s). They are known as Joint Tenants or Joint Proprietors of that property.

Liability A debt which one is liable for; being responsible only to a limited amount.

Land Tax A state government tax charged to the owners of any property over a stipulated value, unless it is their principle place of residence.

Land Transfer Registration Registration of the transfer of ownership in property to the buyer.

Lien The right to hold property as security against a debt or loan.

Line of Credit A loan arrangement with specified credit ceiling to which funds are drawn down.

Loan An advance of funds from a lender to borrow on the agreement that the borrower pays interest on the loans, plus paying back the initial amount of the loan, at, or over an agreed time.

LVR (Loan to Value Ratio) the ration of the amount lent, to the valuation of the property.

Maturity The date a debt or investment must be pain in full.

Maximum Additional Repayments The maximum amount you are able to pay above the regular repayments on your loan.

Maximum Term Longest period of time in years the borrower has to repay the loan.

Minimum Lend Amount Lender's minimum preferred loan amount.

MIOS Mortgage Industry Ombudsmen Service.

Mortgage A form of security for a loan usually taken over real estate. The Lender, the mortgagee has the right to take (repossess) the real estate if the mortgagor fails to repay the loan.

Mortgagee The Lender of the funds.

Mortgagor The person borrowing money in terms of the mortgage.

Mortgage Broker A person or organisation marketing numerous loans from a panel of lender who will select the best loan or loans for borrowers from this selection.

Mortgage Discharge Fee An administration fee to cover the costs (e.g. documents) incurred in winding up a loan.

(Lenders) Mortgage Insurance This is take out by lenders, but is paid for by the borrowers, to cover themselves if the borrower defaults on their loan and property sale proceeds don't cover the outstanding amount.

Mortgage Manager A company responsible for managing every facet of a borrower's loan. Often sources loans from mortgage originators.

Mortgage Protection Insurance Different to mortgage insurance and cover borrower' loan repayments in the event that they are not able to meet them through illness or redundancy, for example.

Mortgage Registration Fee A state government fee for the registration of a mortgage.

Negative Gearing Gearing your investment so that the cost to maintain it (loan repayments, council rates, maintenance, etc.) outweigh the income produced by the investment, leading to a reduction in taxable income.

Net Income The income received by an individual after tax has been taken out.

Net Profit The profit remaining in a business after all expenses have been taken out, but before tax.

Non-Conforming Borrowers Applicants who fall outside the normal eligibility requirements of mainstream lenders.

Off The Plan Purchase Buying a property from the plans only, not the finished product.

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

Ongoing Fee Any loan maintenance fee charged regularly over the life of a loan.

Overdraft A pre-arranged limit to which a person can exceed an account balance.

Passed In A property is 'passed in' at auction if the highest bid fails to meet the reserve price.

Portability When a new property can be used as security for an existing loan, i.e. when the loan is transferred to a new security property without needing to repay the loan, reapply, or restructure.

Power of Attorney A written authorisation to another person, or persons, to perform certain acts for the signed, as if they were the signer.

Principal The capital sum borrowed on which interest is paid during the tem of the loan.

Principal & Interest Loan A loan in which both the principal and the interest are paid during the term of the loan.

Private Treaty Sale A property sale where the buyer negotiates directly with the seller, as opposed to an auction sale.

Property A person's property is "that is his/her own to do what he/she likes with." It may be tangible or intangible, and may be given a monetary value (e.g. house, car, goodwill). Property may be classed 'real' which relates to land or interests in land (except leaseholds) and buildings, etc or 'personal', which relates to other kinds of property such as cars, bank accounts, leasehold interest in land.

Redraw Borrower is able to draw on pre-paid funds.

Redraw Minimum Amount The minimum amount which can be redrawn in one transaction.

Refinancing To replace or extend an existing loan with funds from the same institution or another.

Rental Guarantee A promise by the developer guaranteeing a certain level of return on an investments property. Usually stated as a percentage of the purchase price, it generally relates to investment properties purchased off the plan.

Repayment Minimum The minimum repayment you can make each month on a line of credit.

Reserve Price A specified minimum price acceptable to a seller at auction.

Residential Investment Loan A loan funding a property bought for investment purposes.

Search An examination to confirm that the vendor is in a position to sell the property and that there are no encumbrances on the property.

Securitisation The packaging of cash flow producing assets into a marketable security, e.g. property, roads, bridges, etc. The process where mortgage backed securities (in the form of bonds) are sold directly into the capital markets. Investors in the bonds comprise superannuation funds as well as other major institutions.

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.

Serviceability Ability of borrower to make and meet repayments on a loan, based on the borrowers' expenses and income(s).

Settlement Finalisation of payment by the new owner, and assumption of possession.

Stamp Duty A state government tax on the mortgage amount and purchase price.

Standard Variable A variable home loan with comprehensive features. This is often the variable rate fixed rate loans roll to at the end of the fixed term.

Strata Title The title which gives you ownership of a 'unit' of a larger building which you may sell, lease or transfer at your discretion. It 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.

Surety Person who makes himself responsible for another's payment of debt; also known as the guarantor.

Susceptibility Report Shows likelihood of future pest infections.

Tenants in Common Property in the names of two or more persons and in which each has a separate and distant share. When one person dies his share is not passed to the survivor(s) but becomes part of his will.

Term The length of a home or a specific portion within that loan.

Third Party Security S ecurity provided for a mortgage by a third party (someone different from actual borrowers) who is legally different from the borrower or debtor.

Title Deed Registration showing the ownership of a property.

Title Search Process to ensure that the vendor has the right to sell and transfer ownership.

Torrens System System whereby ownership and all dealing on a property are detailed on the one document, i.e. Certificate of Title or Deed of Grant. Under this system a mortgage is a change or encumbrance on the title. Registration is compulsory to effect legal transfer of an interest in property and each time the property is sold, mortgaged, or a mortgage discharged, the transaction is recorded on the Certificate of Title.

Transfer The document registered with the Land Titles Office that confirms the change of ownership as noted on the certificate of title.

Unencumbered A property free of liabilities, restrictions or mortgages.

Valuation A report as required by the Lender, detailing a professional opinion of a property's value.

Variable Interest Rate A rate that changes in accordance with the rates in the marketplace.

Variation Changing any part of the original loan contract.

Vendor Person selling a property who is the current owner.

Zoning Local authority guidelines as to the permitted uses of land.