Clarifying real estate jargon

You’re stressed and concerned about buying or selling your property and now you’ve bumped head to head into a load of odd terms and phrases. Read on to avoid a muddy puddle of real estate confusion.

Appraisal

This is where sellers usually begin their potential property transaction. Usually available for free, house appraisals involve a real estate agent coming to your home and checking both its exterior and interior along with the local area. The agent can then give you an estimate of how much your house is worth on the market, which will, in turn, help you decide what your reserve and similar is. 

Equity

This is one for both buyers and sellers to take note of. This phrase is essentially the difference between your property’s current market value and any cash you still owe your lender or bank. Depending on how much equity you have, it can greatly assist you in buying a second home. Bear in mind, there are two kinds of equity: accessible and useable. 

Lender’s mortgage insurance (LMI)

Another tricky phrase to absorb and hopefully one you have no need to figure out. But if you borrow more than 80% of your home’s value, than you will! An LMI is a one-off fee for people with such very low deposits, paid to banks and other lenders by people who are considered high risk. The fee essentially protects the lender, not you, and the amount of your LMI depends on the lender itself, how much the house is worth, and how much you need to borrow. 

Loan-to-value ratio (LVR)

Another figure to figure out, LVRs are the percentage of your dream home’s current value. As an example, if you borrow $80,000 from your lender to buy a $100,000 property, then this is an 80% LVR. In general, a high LVR such as this one means a high risk to your lender but either way, this percentage directly affects your chance of enjoying a loan.

Mortgage broker

Available as either an individual or company, mortgage brokers will take care of every aspect of contracts between you and your lender. A great go-between for the two groups, mortgage brokers can help you arrange, understand and apply for home loans, explain how much you need to borrow; discuss your different needs; find different options for you; and take you all the way from borrowing to settlement.

Lender pre-approval

It’s a great idea before buying a property – either privately or by auction – to obtain pre-approval from a lender. This statement helps buyers know exactly what they can afford and how much the bank will lend them.

Settlement date

The most exciting and anticipated day for both buyers and sellers, settlement is when a property sale is finally official. The house title is transferred to the buyer; all financial details are finalised, including council rates and land tax; and the buyer is legitimately owner of their new house. 

chrisbrown1224

Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email chris@newvisionfinancial.com.au The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.