Article by Davian Deluao. This article was originally published on ibuildnew.com.au and has been republished here with permission.
When purchasing property, especially for first-time buyers, it is easy to be overwhelmed with the chunks of information and jargon you are bombarded with right away. This can be tackled by having a firm understanding of the terminology and acronyms that you will come across by reading contracts, in conversation with a real estate agent or even when discussing loans with the bank. We have provided a few key terms to get you up to speed and ensure a smoother purchasing process.
Stands for the principal place of residence where you’ll be staying. This is used to clarify whether a property is going to be utilised as a home to live in or an investment to rent out.
Essentially how much of the property you are able to claim ownership of. This can be calculated by deducting the amount left of your home loan from the market value of the property.
The payments you make towards the property costs of the building or apartment complex. This can include maintenance, insurance, security and general upkeep.
A term you’ll hear a lot of as it is the tax, carried out by the Australian Government, that comes along when purchasing real estate and in addition to the investment price. The tax paid will be based on the cost, location and the reason for buying the property.
Usually apply to items that are not included in the quoted base cost. They cover factors such as earthworks, site preparation and the engineering requirements for the foundation of the house. If you’re comparing site costs between builders, make sure you understand exactly what you’re being charged for!
Refers to what is permissible to build in the precinct with detailed guidelines that builders are required to follow through.
Can guide or restrain how you build or alter your property. It can be found on the contract of sale, but most commonly within a land’s certificate of title.
A highly recommended step that refers to a thorough professional examination that evaluates the structural and mechanical conditions of a property.
A written agreement that outlines the terms and conditions, the purchase price, length of time until settlement and any other conditions.
The legal process of transferring title/ ownership of a property…which takes us to our next term –
A licensed and qualified professional who gives you advice on your property, prepares documentation and conducts the settlement process.
Generally applies to contracts for the sale of residential properties that were purchased outside of an auction.
The official legal document of title, showing who owns the land. It will describe the area and location of the land, list the registered owner as well as any mortgages or interest that are on the land.
Available in each State and Territory of Australia to help certain first home buyers with funding their property purchase. The First Home Owners Grant is a one-off payment eligible for first home buyer’s who purchase or build a residential property to live in.
All about how much you are allowed to borrow and it revolves around your present financial status and current income.
One of the beginning stages of the loan process when a lender confirms how much you are able to borrow, under specific terms and conditions. This is thoroughly assessed on the basis of your income and other factors that can ensure your credibility as a borrower.
Means principal and interest. For homeowners, they can opt to take out an interest-only loan while others prefer to join the principal, also known as the home price, and interest loan together.
Involves the payments that are required to be fulfilled in exchange for the bank or other financial institution providing you with a loan.
The payment that is incurred when you are unable to make a repayment on the due date.
What is paid in order to change the type of loan you take out.
Part payments that are made to your builder as the home progresses. Instead of paying it all upfront, you pay it in agreed installments. However, before you pay, make sure the stage has been completed properly and to your satisfaction.
One of the ways to reduce the interest costs as it is an account that is linked to your home loan. In addition to bringing down the amount of interest you pay back, you are able to put your savings to good use.
The interest rate combined with the loan’s additional fees and charges.
Cheaper as it has a lower interest rate to get you started for the first 12 months and then it resumes to the normal rate.
Is taken out by the lender to protect them in case you default on your mortgage. However, you are expected to pay this and can be avoided by being ready to deposit more than 20% of the total cost.
Refers to the proportion of money borrowed versus the value of a property.
When purchasing property, especially for first-time buyers, it is easy to be overwhelmed with the chunks of information and jargon you are bombarded with right away. This can be tackled by having a firm understanding of the terminology and acronyms that you will come across by reading contracts, in conversation with a real estate agent or even when discussing loans with the bank. We have provided a few key terms to get you up to speed and ensure a smoother investment process.
Stands for the principal place of residence where you’ll be staying. This is used to clarify whether a property is going to be utilised as a home to live in or an investment to rent out.
Essentially how much of the property you are able to claim ownership of. This can be calculated by deducting the amount left of your home loan from the market value of the property.
The payments you make towards the property costs of the building or apartment complex. This can include maintenance, insurance, security and general upkeep.
A term you’ll hear a lot of as it is the tax, carried out by the Australian Government, that comes along when purchasing real estate and in addition to the investment price. The tax paid will be based on the cost, location and the reason for buying the property.
Usually apply to items that are not included in the quoted base cost. They cover factors such as earthworks, site preparation and the engineering requirements for the foundation of the house. If you’re comparing site costs between builders, make sure you understand exactly what you’re being charged for!
Refers to what is permissible to build in the precinct with detailed guidelines that builders are required to follow through.
Can guide or restrain how you build or alter your property. It can be found on the contract of sale, but most commonly within a land’s certificate of title.
A highly recommended step that refers to a thorough professional examination that evaluates the structural and mechanical conditions of a property.
A written agreement that outlines the terms and conditions, the purchase price, length of time until settlement and any other conditions.
The legal process of transferring title/ ownership of a property…which takes us to our next term –
A licensed and qualified professional who gives you advice on your property, prepares documentation and conducts the settlement process.
Generally applies to contracts for the sale of residential properties that were purchased outside of an auction.
The official legal document of title, showing who owns the land. It will describe the area and location of the land, list the registered owner as well as any mortgages or interest that are on the land.
Are available in each State and Territory of Australia to help certain first home buyers with funding their property purchase. The First Home Owners Grant is a one-off payment eligible for first home buyer’s who purchase or build a residential property to live in.
Is all about how much you are allowed to borrow and it revolves around your present financial status and current income.
One of the beginning stages of the loan process when a lender confirms how much you are able to borrow, under specific terms and conditions. This is thoroughly assessed on the basis of your income and other factors that can ensure your credibility as a borrower.
Means principal and interest. For homeowners, they can opt to take out an interest-only loan while others prefer to join the principal, also known as the home price, and interest loan together.
Involves the payments that are required to be fulfilled in exchange for the bank or other financial institution providing you with a loan.
The payment that is incurred when you are unable to make a repayment on the due date.
Is what is paid in order to change the type of loan you take out.
Part payments that are made to your builder as the home progresses. Instead of paying it all upfront, you pay it in agreed instalments. However, before you pay, make sure the stage has been completed properly and to your satisfaction.
One of the ways to reduce the interest costs as it is an account that is linked to your home loan. In addition to bringing down the amount of interest you pay back, you are able to put your savings to good use.
The interest rate combined with the loan’s additional fees and charges.
Cheaper as it has a lower interest rate to get you started for the first 12 months and then it resumes to the normal rate.
Taken out by the lender to protect them in case you default on your mortgage. However, you are expected to pay this and can be avoided by being ready to deposit more than 20% of the total cost.
Refers to the proportion of money borrowed versus the value of a property.
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