Besides all the paperwork and property hunting, there's one more thing that makes people think that buying a home is complicated—the mortgage jargon. Sure, the homebuying process can seem very overwhelming, but when you familiarise yourself with mortgage jargon and terms, you're one step ahead in the whole home buying process.
Of course, connecting with the best mortgage brokers is best, so they can educate you on the need-to-knows of home buying and answer all your questions about the process.
With that being said, our team has compiled all the mortgage jargon and terms you need to know that will guide you through your first home buying journey. Let's dive into it!
- Comparison Rate: This helps you know the true cost of a loan. The comparison rate reduces to a single percentage figure, including the interest rate, fees, and charges. This way, you can easily compare loans from various lenders and find one that's best suited for you;
- Conditional Approval: You'll need to provide supporting documents on your income, assets, liabilities, and expenses when you want to progress past the preliminary approval for a loan. This is necessary, so your lender can check your ability to borrow funds and manage debt. If successful, you'll be granted conditional approval;
- Conveyancing: This legal term refers to the ownership of the property. This process—whether you're buying or selling—is completed by a solicitor or conveyancer;
- Fixed-Rate Mortgage: This is an interest rate fixed for a period of time, which is about one to five years. This means that you'll be making repayment at the same amount for that period. This is perfect for budget-conscious households.
- Interest-Only Mortgage: This allows borrowers to delay the repayment of the loaned amount and pay the loan's interest for a set period.
- Lenders Mortgage Insurance (LMI): This insurance policy covers the lender from losses that they may incur when a borrower cannot make repayments. However, this shouldn't be confused with mortgage protection policies, and if you're interested in this, it's best to speak to the best mortgage broker for more information.
- Loan Value to Ratio (LVR): This is the property's value compared to the amount of money being borrowed. This value is calculated as a percentage and is used by lenders to assess the risk factor of a loan. If you have a low LVR percentage, the risk is lower.
The Bottom Line: Connect with a Reliable Mortgage Broker, So You Can Stay Informed About the Whole Home Buying Process
One of the best things you can do to prepare yourself for your home buying journey is to familiarise yourself with mortgage jargon. You can feel more at ease by doing this, allowing you to have a hassle-free home buying experience.
Of course, it's worth considering working with a credible mortgage broker because, with their expertise, they'll be able to guide you through the home buying process and help you secure the home of your dreams.
How Can We Help You?
If you're looking for the best mortgage broker in Sydney, you've come to the right place because Wealthy You is here to assist you in your homebuying journey.
Wealthy You is one of the leading mortgage companies in Sydney, offering various mortgage solutions that meet every clients' needs. Since we're alternative lending specialists, we provide restructuring loans in Sydney that make refinancing your home simple.
Learn more about our services today!