Glossary
Application Fees
The fees that lenders charge to set up and process your loan. These are paid up front and are generally only refundable if your loan application is refused.
Building Covenant
A Building Covenant is a condition placed on the purchaser of a vacant block of land which restricts the style, size or type of building that he/she may erect. Covenants are created by developers to ensure that the land is developed within a reasonable time and that any buildings erected on the land are built to certain uniform standards. This maintains the value of the remaining blocks of land. It also means that a standard of development is created for the community, and helps to ensure a development which will conform to a minimum standard thus, preserving the value of your own investment.
Building Envelope
Building Envelopes are designated areas on a property within which all building work must be contained. Property owners will not be permitted to build structures outside these areas unless written approval is obtained from the local Council.
Certificate of Title
The Certificate of Title is a legal document that identifies the owner of the land. It shows the owners details and whether there are any mortgages or restrictions on the land. It also details the land dimensions and it has a unique volume and folio number which is registered with the Land Titles Office.
Conveyancing
The legal process for the transfer of ownership of real estate. A conveyancer or lawyer is the legal representative who will facilitate the transfer of ownership of the land from the seller to the buyer.
Developer’s Guidelines
Design guidelines are enforced by land developers to ensure an appropriate standard of quality is maintained across all houses at a particular estate as well as providing guidance as to how an estate will look in the future. When you purchase land you must adhere to these design guidelines (also referred to as ‘design controls’). These guidelines may restrict the type of building materials that can be used in the home ie. Brick must be used instead of weatherboard, or there may be restrictions on roof pitch or porches, garage positioning etc
Exit Fee
Some lenders will charge an ‘exit fee’ when the borrower has sought refinance with another lender within the first few years of the loan. Exit fees can vary between lenders.
5 Star
The 5 star energy efficiency rating became standard for all new homes being built from 1 July 2004. This means that it is compulsory for new homes to have: - 5 Star energy rating for the building fabric, plus - A rainwater tank for toilet flushing - Or, a solar hot water system
Fixed Cost Packages
House and Land packages have all costs fixed at the point of sale, meaning you have absolutely no more to pay.
Fixed Rate Loans
Loans where both the interest rate and the monthly payments (for principal and interest) stay the same during the life of the loan. These loans generally have repayment terms of 15, 20, or 30 years.
Settlement
The finalisation of the transfer of land/property from one owner to the another. The transfer of title (see Certificate of Title).
Utilities
Services, such as gas, electricity, water, sewerage, which are required in any dwelling and for which the owner must pay.
Variable Rate
Loans where both the interest rate and monthly repayments can change depending on the rate set out by the bank, which is guided by the Reserve Bank of Australia.
Land Tax
A State Government tax imposed on the sale of real estate. It is determined by the sale value, and it varies between states.
Mortgage Insurance
Put simply, mortgage insurance protects the bank in case you default on your loan. It does NOT protect you, the borrower.
