A balloon payment is common for car and equipment finance. It is a large payment due at the end of the loan term. People are usually happy with balloon payments because they are likely to trade-in or sell their car after the loan term, enabling to pay the balloon without stress.
Body Corporate is the common term for the body of members that oversee things like maintenance, insurance and upgrades on units and townhouses. Body Corp fees/levies are generally charged to each property owner within the apartment building (or town house estate) quarterly.
A solicitor or representative responsible for preparing various documents and arranging settlement.
A record of all your Credit Card and loan inquiries, defaults and court judgments resulting from unpaid loans.
When a borrower does not make their repayments on time, they are said to be overdue or in arrears. If the payments are overdue for 3 months or more, the lender will send out a notice of default, and record it on your credit file.
The difference between the value of a property and the loan against it. If I own property worth $400,000, but have a loan against it worth $300,000, then I have $100,000 in equity.
An umbrella term for banks, building societies, credit unions and non-banks.
LMI is an insurance taken out by banks to protect themselves in case the borrower defaults. LMI is often used as a reference to the once off insurance premium the borrower needs to pay when using a deposit smaller than 20% of the purchase price. LMI does not protect the borrower.
LVR or the Loan-to-Value Ratio is the total loan amount divided by the value of the security.
Used to describe a lender that doesn’t have its banking licence. There are many non-banks that do home loans and car finance.
The amount owing on a property.
A home loan is “secured” by house, therefore the house is known as the security. When a house or car is used as security for a loan, the lender may repossess the security if the borrower defaults.
A home loan can have multiple splits, which can be described as sub-accounts of the home loan.
A loan with only one security.
The length of a loan i.e. a term of 30 years.