Home Loan Information

By: EconomyWatch Content   Date: 17 December 2009

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Home loan information must be researched, filtered and compiled with great care before you try to secure a deal or negotiate with any lender. Moreover, understanding the different terms used in the processing of home loan can make things a lot easier.

Home Loan Information: Glossary

The following are some glossary terms that is used in home loan processing:

 

Application Fee: Charges taken by the loan agency to cover initial costs involved in the processing of home loan application. Property valuations and other additional costs can also be included in it, depending on the lender.

Assets: Anything valuable that a borrower owns including money, car, computer or property.

Building/pest inspection: A report that contains details of the major faults, if any, in the property. It also provides information about the presence of termites or other pest in a home.

Contract of Sale: This is an agreement in writing and contains the terms and conditions involved in the sale and purchase of property.

Conveyancing: It is a legal process pertaining to the transfer of ownership of property.

Disbursements: These are minor charges taken by a solicitor when s/he deals with the loan agency on borrower’s behalf.

Equity: It is that part of a home that is owned by the borrower and is represented by the home’s value, which is calculated after deducting outstanding debts, if any, that are secured against the property.

Guarantor: An individual who takes charge of repaying debts if the borrower fails to do that.

Lenders Mortgage Insurance (LMI): This aims at providing protection to lender against losses they may have to bear if borrowers default on repayment. There is no coverage for the borrower.

 

Maturity: The date on which the borrower has to pay off the complete loan amount.

Mortgagee: The lender is also called mortgagee.

Mortgagor: The borrower is also called mortgager.

Principle: The money taken on a loan or remaining unpaid. This does not include interest.

Security: This is the term used for any thing of value the borrower pledges to the lender to secure the loan. In the event of failure to repay the loan, the lender has the right to sell the asset pledged as security to cover the loss.

Settlement: This is the process in which any one party to the sale of a property meets with the rest of the participants to complete the sale.


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