Glossary P-S


Portable Loan
A loan that allows you to take your mortgage with you from one property to the next without having to go through the full approval process. You also avoid some of the fees associated with setting up a loan.

Pre-approved Loan
Getting your finance approved by a lender before you have made an offer on a property, or even before you have begun looking for a property. This allows you to look for properties safe in the knowledge that you can get finance for the pre-approved amount, providing your circumstances have not changed and the property meets the lenders requirements. Pre-approval may last up to 3 months, and can also be known as approval in principal.

The amount borrowed from a lender, upon which interest is charged. As loan repayments are made the principal decreases.

Progress Draws
These are draw downs on your construction loan made when payments to your builder are due. As construction proceeds, your builder will require payment when certain stages are met, at which time you draw down a portion of your loan, until construction is finished and the final draw down occurs.

Redraw Facility
This facility is found on many loan products, and allows you to redraw funds from your loan that you have paid in advance. For instance, if you have been making extra repayments on your loan and are $10000 in advance with your repayments, with a redraw facility you would be able to take the $10000 (or a portion of it) out of your home loan. Restrictions usually apply (i.e. there may be a minimum amount you are allowed to redraw), and you may be charged a fee for redrawing.

When a mortgage is taken out and some or all of the funds are used to pay off another existing mortgage. The new mortgage may or may not be with the same lender. Refinancing is often used to access built up equity in a property, or simply to move to a cheaper home loan.

Repayment Period
This is the frequency with which you make your loan repayments. You will have a choice of making weekly, fortnightly or monthly repayments, depending on the lender and the loan product.

Reverse Mortgage Loan
These loans are aimed specifically at seniors. They allow the borrower to take out a mortgage against their property (usually only up to a comparatively small LVR, such as 25% or less), and not make any repayments until the property is sold, or the borrowers move from the home, or the borrowers are deceased.

When applying for a home loan, assets will be required to secure the loan. On most standard home loans, the security will be the property being purchased. In some circumstances more than one property may be required to secure the loan.

Settlement Date
This is the date on which you receive the funds from your loan. If you are purchasing a property (as opposed to refinancing), this is the date at which you will pay the vendor and take possession of the property. Payments of fees such as stamp duty and mortgage registration is also required on the settlement date.

Split Loan
Some lenders allow you to split your loan into a fixed interest rate component and a variable interest rate component, giving the borrower a combination of the security of a fixed loan and the flexibility of a variable loan.

Stamp Duty Concessions
Stamp duty concessions (waivers or discounts) are available in certain circumstances (i.e. for first home buyers). The amount of the concession will vary from State to State.

Stamp Duty on Loan
This is a State Government tax paid on the loan amount. It will vary from State to State, and may be discounted in certain circumstances (i.e. for first home buyers).

Stamp Duty on Property
This is a State Government tax paid on the value of the property. It will vary from State to State, and may be discounted in certain circumstances (i.e. for first home buyers).

A plan of a property, showing the precise positioning of the property boundaries and any building on the land. A surveyor can use the plan to check the boundaries of a property prior to purchase.