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Home Loan Jargon Explained When applying for a there may be some terms used that you are not familiar with. It is wise to learn what they mean, so you will know exactly what is being explained to you. Some of the less familiar terms are: -
1.Accrued interest. This refers to interest that, while owed, has not yet been charged. It is mostly charged at the end of the month. 2. Adjustments are extra expenses (often utility expenses) that have been paid by either party but not used. This is usually sorted out at the time of settlement. 3.Amortisation. This refers to the process of reducing your loan and interest through regular repayments. 4.Arrears refer to a payment that is overdue. 5.Body corporate - refers to those people who own units in a strata building and are responsible for the management of the building and any common areas. 6.Break cost - the amount
charged by the lender when the borrower wants to get out of his fixed rate before the fixed time has expired, e.g. he may pay it off early. 7.Capped - the interest rate cannot go higher than a fixed amount, but can drop. 8.Caveat - prevents any further dealings on a property when you register an interest over it. 9.Debt servicing ratio - a way of fining out if you can afford to pay back the amount you want to borrow. It takes into account your present debts and income. 10.Discharge of Mortgage - is when you've repaid all that loan and don't need any more.
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