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              Laundry lick of love

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              Indulgent dream life wall

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              Swoon-worthy modern living rooms

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              Smoothie Bowl Inspiration

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              Nifty tricks for saving big on meat

              The Smart Cookbook Changing Lives

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              Ways to save money fast around the house today

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              Sugar Free Kids Lunches

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                Four Tips For Creating a More Functional Living Room Space

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                Shoot and Edit Amazing Home Videos This Winter Season

                Shoot and Edit Amazing Home Videos This Winter Season

                Travelling to the US? Hot tips on finding the best car insurance

                Fast home organisation tips for the kitchen

                Fast home organisation tips for the kitchen

                Working from home with kids

                Working from home with kids

                Grow an amazing garden

                Grow an amazing garden

                Laundry lick of love

                Laundry lick of love

                Swoon-worthy modern living rooms

                Swoon-worthy modern living rooms

                Your Dream Kitchen Including Appliances for Under $5k

                Your Dream Kitchen Including Appliances for Under $5k

                Home Page New

                The Secret To Totally Transforming A Shed In A Weekend & How We Did It For Under $250

                Going Green: Save Big Around The Home

                Going Green: Save Big Around The Home

                Here’s a smart solution! Rent camera gear for amazing shots & savings. Wow your Insta-audience too.

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                  Four Tips For Creating a More Functional Living Room Space

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                  11 money-saving tips – get out of debt and save more

                  Make $350 in savings without working

                  14 ways to save money in Australia

                  10 tips to save money on electricity in Australia

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                  Maximise your food budget by cooking in bulk

                  Maximise your food budget by cooking in bulk

                  10 save money quotes: Successful strategies to finally stop spending

                  10 save money quotes: Successful strategies to finally stop spending

                  11 ways to make money in Australia: How to get ahead

                  11 ways to make money in Australia: How to get ahead

                  15 great quotes on how to save money

                  15 great quotes on how to save money

                  Cut your food budget and shop smarter

                  Cut your food budget and shop smarter

                  22 clever grocery hacks to save money and time

                  22 clever grocery hacks to save money and time

                  Ways to be frugal while living down under

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                    Going Green: Save Big Around The Home

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                    Here’s a smart solution! Rent camera gear for amazing shots & savings. Wow your Insta-audience too.

                    Here’s a smart solution! Rent camera gear for amazing shots & savings. Wow your Insta-audience too.

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                    T’is The Season To Be Thrifty In July

                    6 tricks for slashing your next car loan

                    Home Page New

                    Living The Good Life Without The Guilt

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                    Turning Food Waste Into Savings On Steroids

                    Home Page New

                    OMG! How to have the best African holiday ever!

                    The Ultimate Guide To Colour Coding Your Family Fast

                    The Ultimate Guide To Colour Coding Your Family Fast

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                    The Sydney Travel Checklist You Shouldn’t Leave Home Without

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                      Understanding the Terminology around Home Loans

                      Penina Petersen by Penina Petersen
                      April 28, 2016
                      in Investment, Mortgages & Loans
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                      Purchasing a home and taking on a home loan is a big undertaking, so it’s important to have a detailed understanding of the process involved and the terminology that comes with it. For some people, entering into a home loan can be almost like learning another language, as many of the terms are completely foreign. If this sounds like you, don’t fret – below you’ll find a number of common home loan terminologies deconstructed and demystified.

                      Variable Loan

                      If you choose a variable loan, the interest rate will vary during the life of the loan, meaning your repayments could increase or decrease at any point in time. Despite the lack of security, this is a popular type of loan with home owners as interest rates are likely to be slightly lower than what you would receive for a fixed loan.

                      Fixed Loan

                      With a fixed loan, interest rates and repayments are ‘locked in’ for a set period of time (usually between 1-5 years). This type of loan is ideal for those who wish to know exactly how much they will be paying, whether this be for security or budgeting purposes.

                      Split Loan

                      Want to hedge your bets? Take your borrowing and split it between a fixed and variable loan. Many lenders will allow you to dictate the percentage of the split, whether you decide to go for 50/50, 80/20 or 20/20.

                      Principal

                      The principal is simply the total amount of funds you are borrowing.

                      Pre-approval

                      Want to be able to put an offer in on a property, knowing you are all approved to get a home loan? Before you even find your new home, you can do the necessary paperwork and ascertain whether a particular bank will approve your future loan application. The property market can move notoriously quickly and those with pre-approval have a distinct advantage over those whose finance may fall through.

                      Lender’s Mortgage Insurance

                      Lender’s Mortgage Insurance (LMI) is an insurance premium payable by home owners who are unable to provide a deposit of 20% or more. LMI acts as an insurance policy for lenders, in case borrowers are unable to make their repayments.

                      Offset Account

                      An offset account is a transactional bank account that is linked to your home loan. Whatever money you deposit in that account is offset against the outstanding loan balance, thereby helping you to reduce the amount of interest payable on the loan. Many banks, such as Heritage Bank, offer offset accounts to accompany their home loans and to help customers reduce their overall debt levels.

                      Terminology can be tricky to remember, and confusing to understand in detail even if you do happen to remember the actual name. This is where financial professionals can be helpful in explaining each item to you, and offering fact sheets or glossaries with a breakdown of all terms that might be involved in your home loan.


                      The Home Loans Glossary

                      Are you new to the world of home loans? What was the most effective way for you to learn all the new concepts? Comment below to share your thoughts.

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                      Tags: buy investment propertyfirst home buyersHome Loanshome renovationhome renovation tipshot renovation tipshouse rulesinvestment propertymortgagesproperty valuesrenovation tipsroom revealsave a depositsave on your next home renovationthe block
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