Loan Lingo
 

Know your terms
When buying or selling property these are some of the terms you might encounter.

Loan application fee: The application fee is charged by the lenders when a formal loan application is made. The amount charged varies between lenders, and often lenders will have specials in which fees are waived or reduced.

Property Valuation: The lenders will require a valuation be done on most properties to be used as security for a mortgage. Contract duty: This is paid according to the purchase price of the property, and will vary from state to state.

Mortgage Duty: This is payable on the mortgage value, and will also vary according to state. There are some exemptions for refinances and first home buyers.

Lenders Mortgage Insurance (or LMI): Mortgage insurance is required when borrowing more then a set proportion ( or Loan to Value Ratio) of the value of the property. Premiums will vary dependent upon the loan amount and the “LVR”. LMI is a once off payment and is taken out to protect the lender in the situation that the borrower defaults on the loan. This insurance does not
protect the borrower from the consequences of defaulting on the loan.

Conveyancing: Conveyancing is the process of transferring the ownership of a property between the seller and buyer. This is usually completed by a solicitor or a conveyancer, although it is possible to purchase do-it-yourself conveyancing kits.

Survey Report: The survey report shows where a property stands in relation to the boundaries of the land. This report will not always be required.

Building Inspection: Checks the quality and structural integrity of the property, and indicates if there are any visible defects or necessary repairs.

Strata Inspection: Examines and reports on the records of the strata Corporation.