Glossary of Terms

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Accrued Interest
interest you have incurred that is yet to be paid or charged.

Agent
an authorised person or body that can act of behalf of their client in the sale, purchase or management of property.

Allotment
a portion or block of land granted for a specific use and created out of a larger area.

Amortisation Period
the period of time one has to pay / decrease their loan in.

APR (Annual Percentage Rate)
the advertised rate of interest per annum.

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

Arrears
behind in payment. Having outstanding amounts.

Assets
money, property or goods of value.

Auction
public sale of property (or items) through a bidding process with ownership going to the highest bidder.

B  TOP

BAD (Bank Account Debts tax)
State or Territory government tax (accept ACT) on withdrawals from accounts on which a cheque may be drawn

Bankrupt
legally declared financially broke

Bearer
person presenting a cheque to a bank

Bill of Sale
a transfer of ownership of personal property

Body Corporate
elected council for the management of building and common areas of a strata building such as an apartment block

Bridging Finance
a loan that covers the financial gap between the purchase of a new property and the sale of an existing one

Building Regulations
a set of standards set down by councils to control the type and quality of buildings

C  TOP

Capital
the value of your assets that may include property, cash or securities etc.

Capital Gain
the monetary gain obtained when you sell an asset for more than what you originally paid

Capital Gains Tax
a Federal Government tax payable for monetary gains on the sale of assets

Caveat
usually found as a contract clause stipulating a particular requirement. Latin for “beware”

Certificate of Title
document showing ownership and the right to sell and transfer ownership of property along with property details including any encumbrances

Chattels
personal property. Real Chattels; buildings & fixtures. Personal Chattels; clothes & furniture

Common Property
areas used by all residents such as foyer, staircase or gardens

Comparison Rate
the Comparison Rate indicates the overall cost of a loan. It takes into account, associate costs including the interest rate, the loan establishment fees and any other up-front or ongoing fees. The Comparison Rate does not include government fees and charges or any fees that are conditional or that are not established at the time of calculation

Compound Interest
interest paid on accumulated interest and on the original principle

Contract of Sale
a written agreement outlining the terms and conditions for the sale of property

Conveyancing
the legal process for the transfer of ownership of property

Covenant
terms and conditions relating to the usage of a block of land or the buildings on it

Cover Note
a temporary insurance policy before the implementation of a formal policy

CRAA
the body with which all details on persons having established a credit history are held

Credit
a borrowed sum of money to be paid back (usually with interest) within the arranged time frame. A sum of money paid into an account

D  TOP

Debit
a withdrawal of money from an account.

Debtor
a person owing money

Deed
a legal document “signed, seeled and delivered” to effect a transfer of property.

E  TOP

Easement
a right to use another person’s property

Encumbrance
an outstanding liability or charge on a property

Equity
the amount of an asset actually owned

Equity Loan
a loan secured by the portion of equity you own in an asset (usually in your exiting property)

F  TOP

FID (Federal Institutions Duty)
state duty on the receipts of financial institutions

Fittings
items that can be removed from a property without damage

Fixed Interest
a rate of interest that is set and will not change for an agreed term

Fixtures
items that cannot be removed from a property without damage and must be stipulated in the Contract of Sale with any damage made good by the vendor

Freehold
when an estate is owned indefinitely

G  TOP

Garnishee
person who’s has money taken (from wages) to pay their debt

Gearing
the ratio of investment

Guarantee
a legal promise to pay back borrowed money

Guarantor
a person who agrees to be responsible for another party’s debt

H  TOP

Holding Deposit
a refundable deposit showing goodwill from the buyer to follow through with the purchase

I  TOP

Inclusions
items included with the property i.e. light fittings, dishwasher etc

Interest
a fee charged (percentage) by a lender on borrowed monies

Interest Only
loan payments made on the interest portion of the loan not the principle

L  TOP

Land Tax
a state government charge for properties over a set value, unless it is a primary place of residence

Liabilities
debts or monetary obligations

Lien
the right to use property as security against debt or a loan

Line of Credit
loan type with flexible arrangements to be used at your discretion

LVR (Loan to Value Ratio)
the lending amount versus the property value, expressed as a percentage

M  TOP

Maturity
the date a debt or investment must be paid in full

Mortgagee
the lender of funds Mortgagor the borrower

N  TOP

Negative Gearing
when your annual property costs are greater than what you receive in rental income, you can claim the difference against other types of income such as your salary

NSR (Net Servicing Ratio)
the lending amount based on disposable income

O  TOP

Offset Account
savings account that uses the interest earned to reduce the interest on your mortgage

Old System Title
(common law title) a chain of title documents dating back to the original owner

Overdraft
a limit to which a person can exceed an account balance

P  TOP

Passed In
a property is “passed in” at auction if the highest bid fails to reach the reserve price

Payee
person or entity to which a cheque is payable

Portability
the transfer of pre-approval from one property to another

Principal
the borrowed amount

P&I (Principal & Interest Loan)
a loan where both the principal and interest is paid during the loan term

Private Sale
the sale of property without an agent

R  TOP

Redraw Facility
allows borrower to draw upon extra repayment amounts on current loan

Refinancing
change or extend an existing loan to a new or with your existing lender

Requisitions on Title
additional information requests about the property from the buyer to the vendor

Reserve Price
a specified minimum price acceptable to the vendors prior to auction

Rise & Fall Clause
a building contract clause allowing the final price to move either up or down based on fluctuations of material prices or wages etc.

S  TOP

Security
an asset used to guarantee the repayments of a loan

Semi-Detached
houses that share a common wall or walls

Settlement
the date final payment is made and the property title is handed over

Signatory
a person authorised to access an account

Stamp Duty
state government tax payable at settlement calculated on the sale price

Strata Title
a title for a unit or apartment

Stratum Title
a title for a unit or apartment giving shareholder status in the company managing the common area

Susceptibility Report
shows likelihood of future pest infestations

T  TOP

Title
a.k.a Certificate of Title

Torrens Title
a.k.a Certificate of Title

U  TOP

Unencumbered a property free of liabilities or restrictions

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Valuation
an assessment made by a professional of the market value of a property

Variable Interest Rate
an interest rate that can decrease and increase according to the market

Vendor
party selling a property

Vendor Statement
a declaration by the vendor explaining any terms and conditions regarding the property that may influence the buyer’s decision to purchase

Violet
colour, flower, “finance made easy”

Z  TOP

Zoning
local authority guidelines regarding the uses of land and buildings