Borrower
The person who is borrowing money or receiving credit under a Loan Agreement
Certificate of Title
The official document of title showing ownership of the land described in it. The Certificate of Title describes the area and location of the land, it shows the registered proprietor (land owner) and all charges (Mortgages) and other interests, (e.g. easements) affecting the land
Conveyancing
The process of legally transferring ownership of interests in land
Contract
A legally binding agreement between two or more people. Contracts may be written, oral, partly written, or partly oral, or implied by a person's behaviour. Contracts relating to land must be in writing
Credit Limit
The maximum credit allowed to a Borrower on an account
Credit Reference or Credit Report
A report prepared by a credit reporting agency which sets out the credit history of a person. A satisfactory Credit Reference is often required by a Lender before approving a loan
Debt Servicing Ratio
A measure of the Borrower's capacity to repay a loan. A Lender generally calculates the Debt Servicing Ratio by taking into account a Borrower's expenses as a proportion of the Borrower's income
Default
Failure to make a loan repayment by a specified date
Deposit
Money paid by one party to a Contract to secure the performance of the Contract by the other party. In a house purchase the Deposit is the amount of money that is paid to secure the purchase of the house. The Deposit is often payable to the real estate agent as the seller's agent. It is important to find out what paying a Deposit will commit you to, whether a deposit is refundable and, if so, in what circumstances
Guarantee
An agreement by which a person (guarantor) promises to meet the obligations of another person (Borrower) on Default. Lenders in some circumstances require a Guarantee of the Borrower's obligations under a Loan Agreement
Interest
An amount payable by the Borrower to the Lender as the Lender's recompense for making the loan. A Borrower can choose to borrow on a fixed interest rate or a floating interest rate
Interest-Only Loan Agreement
A Loan Agreement under which the Borrower makes no Principal repayments during the loan Term, but must repay the whole of the Principal on loan maturity. During the Term of an Interest-Only Loan Agreement, payments of the amount of interest accruing on the loan will usually be required at regular intervals
Lease
A Contract under which the owner of a property (lessor or landlord) grants to another person (lessee or tenant) the right to exclusive possession of the property for an agreed period, usually in return for rent
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