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Frequently Asked Questions & Glossary
 

If my home loan is with another bank can I move to Eagle Funding?
Can I borrow more money and increase the size of my loan?
How is interest calculated?
What happens if my interest rate changes between loan statements?
Can I have my salary paid directly in to my loan account?
Why would I take out an Interest Only loan?
What if my details have changed?
Can I arrange Pre-Approval for my home loan before I find a house?
How is Redraw calculated?

Q. If my home loan is with another bank can I move to Eagle Funding?

A. Once you meet our application criteria then yes it is possible to change. Phone us on 1300 552 471 to discuss your needs and our requirements or click here to email your enquiry.

Q. Can I borrow more money and increase the size of my loan?

A. It may be possible for you to borrow more money once you meet a certain criteria. To see if you are eligible contact us on 1300 552 471 or click here to email your enquiry.

Q. How is interest calculated?

A. Interest is calculated daily and charged to your loan account monthly. As the number of days varies between months, the amount will vary as well. The basic formula is:

Balance X Interest Rate% ÷ 365 days X Days in Current Month = Minimum Repayment

Q. What happens if my interest rate changes between loan statements?

A. We will notify you of your new interest rate, should it change, along with your new minimum repayment amount. Both the original and new rates will also be noted on your next statement.

Q. Can I have my salary paid directly in to my loan account?

A. Yes. All our loans offer this feature.

Q. Why would I take out an Interest Only loan?

A. Interest Only loans are predominately used by investors. It not only maximises tax deductions but can also free up cash flow as only the interest on a loan is paid. Check with your accountant to assess suitability.

Q. What if my details have changed?

A. If you change addresses or phone numbers you need to notify us as soon as possible by calling Customer Service on 1300 552 471.

Q. Can I arrange Pre-Approval for my home loan before I find a house?

A. Yes. It can be easier knowing how much money you can borrow before heading to an auction. Pre-Approvals are subject to property valuations and if your circumstances change.

Q. How is Redraw calculated?

A. The Redraw amount is anything extra you have paid off your loan above your minimum monthly payments.

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A B C D E F G H I L M N O P R S T U V Z

Accrued Interest
Interest you have incurred that is yet to be paid or charged.

Agent
An authorised person or body that can act of behalf of their client in the sale, purchase or management of property.

Allotment
A portion or block of land granted for a specific use and created out of a larger area.

Amortisation Period
The period of time one has to pay / decrease their loan in.

APR (Annual Percentage Rate)
Annual Percentage Rate of charge. The true rate of interest charged on a loan taking into account the total cost of interest and other charges e.g. brokers fees/legal fees. The calculation is set out in statutory regulations.

Appraised Value
The estimate of the property value being used as a security for a loan.

Arrears
Scheduled repayments outstanding.

Assets
Money, property or goods of value.

(Life) Assurance
A Specific type of life insurance policy often linked with a mortgage or loan. A portion of premium goes toward insuring your life, and will pay off loan in the event of death. The rest is invested and will pay a lump sum at the end of the term.

(Level Term) Assurance
Life assurance which pays out a lump sum if you die during the term. Suitable for interest only loans as the amount owed on the loan remains the same throughout the life of the loan.

Auction
Public sale of property (or items) through a bidding process with ownership going to the highest bidder.

Autoscore
The process of using specialised online credit search databases to identify an applicant’s credit status

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BAD (Bank Account Debts tax)
State or Territory government tax (accept ACT) on withdrawals from accounts on which a cheque may be drawn

Bankrupt
Legally declared financially insolvent

Bearer
Person presenting a cheque to a bank

Bill of Sale
A transfer of ownership of personal property

Body Corporate
Elected council for the management of building and common areas of a strata building such as an apartment block

Bridging Finance
A loan that covers the financial gap between the purchase of a new property and the sale of an existing one

(Mortgage/Finance) Broker
An intermediary who identifies, and places, customers requiring a loan or mortgage etc. with a company (Lender) able to provide it. The broker often carries out the administration to do with processing the loan.

Building Regulations
A set of standards set down by councils to control the type and quality of buildings

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Capital
The value of your assets that may include property, cash or securities etc.

Capital Gain
The monetary gain obtained when you sell an asset for more than what you originally paid

Capital Gains Tax
A Federal Government tax payable for monetary gains on the sale of assets

Cashback
A type of loan where the borrower is given back a sum of money (usually a percentage of the loan). Used by lenders as an incentive to promote their products.

Caveat
Usually found as a contract clause stipulating a particular requirement. Latin for “beware”

Certificate of Title
A document showing ownership and the right to sell and transfer ownership of property along with property details including any encumbrances

Chattels
Personal property. Real Chattels; buildings & fixtures. Personal Chattels; clothes & furniture

Common Property
Areas used by all residents such as foyer, staircase or gardens

Comparison Rate
The Comparison Rate indicates the overall cost of a loan. It takes into account associated costs including the interest rate, the loan establishment fees and any other up-front or ongoing fees. The Comparison Rate does not include government fees and charges or any fees that are conditional or that are not established at the time of calculation

Compound Interest
Interest paid on accumulated interest and on the original principle

Contract of Sale
A written agreement outlining the terms and conditions for the sale of property

Conveyancing
The legal process for the transfer of ownership of property

Conveyancer
A person, used as an alternative to a solicitor, to carry out the legal work involved in buying and/or selling a property. Note: It should be checked that they are licensed to carry out this function.

Covenant
Terms and conditions relating to the usage of a block of land or the buildings on it

Cover Note
A temporary insurance policy before the implementation of a formal policy

CRAA
The body with which all details on persons having established a credit history are held

Credit
A borrowed sum of money to be paid back (usually with interest) within an arranged time frame. A sum of money paid into an account

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Debit
A withdrawal of money from an account

Debtor
A person owing money

Deed
A legal document “signed, sealed and delivered” to effect a transfer of property.

Discounted Rate
A discounted rate gives you a reduction of, for example, 2% off the standard variable rate (SVR) for a specific period. So, during this period should the SVR rise and fall, you will still qualify for the discount and therefore pay a lower rate.

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Easement
A right to use another person’s property

Encumbrance
An outstanding liability or charge on a property

Equity
The amount of an asset actually owned

Equity Loan
A loan secured by the portion of equity you own in an asset (usually in your exiting property)

Exchange of Contracts
Agreement signed by house purchaser and vendor committing themselves to the transaction. Once this has occurred a legally binding contract is in existence and the purchaser must complete the purchase within a specific period of time.

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FID (Federal Institutions Duty)
State duty on the receipts of financial institutions

Fittings
Items that can be removed from a property without damage

Fixed Interest Rate
The rate is fixed for a specific number of years, so you know what your payments will be over that period. Following this period, the rate will usually revert to the lender's standard variable rate.

Fixtures
Items that cannot be removed from a property without damage and must be stipulated in the Contract of Sale with any damage made good by the vendor

Freehold
Land / Property is owned outright by the Freeholder. Whether the property is held on a lease or a freehold basis will be identified in the deeds to the property.

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Gearing
The ratio of investment

Guarantee
A legal promise to pay back borrowed money

Guarantor
A person who agrees to be responsible for another party’s debt

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Holding Deposit
A refundable deposit showing goodwill from the buyer to follow through with the purchase

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Inclusions
Items included with the property i.e. light fittings, dishwasher etc

(Term) Insurance
A life insurance policy often linked with a mortgage or loan. The premium goes towards insuring your life, and will pay off loan in the event of death. No benefits are received after the policy expires.

Interest
A fee charged (percentage) by a lender on borrowed monies

Interest Only
Loan payments made on the interest portion of the loan not the principle

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Land Tax
A state government charge for properties over a set value, unless it is a primary place of residence

Liabilities
Debts or monetary obligations

Lien
The right to use property as security against debt or a loan

Line of Credit
Loan type with flexible arrangements to be used at your discretion

(Secured) Loan
A loan to be used for any purpose. The equity in the property is put up as security against not paying the loan back.

(Unsecured) Loan
A loan to be used for any purpose. The credit rating or financial position of the applicant is such that no security for the loan is required.

LTV or LVR
Loan to value ratio. This is the size of the loan or mortgage as a percentage of the value of the property or price being paid for the property e.g. A property valued at $500,000 with a mortgage of $450,000 would have an LTV of 90%.

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Maturity
The date a debt or investment must be paid in full

Mortgage
A loan to purchase a home where the property is used as security in the event of non-payment of the mortgage.

Mortgagee
The lender of funds

Mortgagor
The borrower of funds

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Negative Equity
The situation where the amount owed on a mortgage exceeds the value of the property.

Negative Gearing
When your annual property costs are greater than what you receive in rental income, you can claim the difference against other types of income such as your salary

NSR (Net Servicing Ratio)
The lending amount based on disposable income

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Offset Account
Savings account that uses the interest earned to reduce the interest on your mortgage

Old Law Title
A chain of title documents dating back to the original owner

Overdraft
The limit to which a person can exceed an account balance

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Passed In
A property is “passed in” at auction if the highest bid fails to reach the reserve price

Payee
The person or entity to which a cheque is payable

Portability
The transfer of pre-approval from one property to another

Principal
The borrowed amount

P&I (Principal & Interest Loan)
A loan where both the principal and interest is paid during the loan term

Private Sale
The sale of property without an agent

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(Capped) Rate
Usually for a set number of months/years where the interest rate can go up and down but there is a maximum (capped) interest rate which it can not go above.

(Variable) Rate
A rate of interest which may vary up or down during the lifetime of a loan. The circumstances causing any change are outlined in the loan conditions.

Redraw Facility
Allows borrower to draw upon extra repayment amounts on current loan

Refinancing
Change or extend an existing loan to a new or with your existing lender

Requisitions on Title
Additional information requests about the property from the buyer to the vendor

Reserve Price
A specified minimum price acceptable to the vendors prior to auction

Rise & Fall Clause
A building contract clause allowing the final price to move either up or down based on fluctuations of material prices or wages etc.

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Secured Loan
A loan that has security (ie a Mortgage over Property) or collateral supporting it.

Security
When a loan is taken out it is ‘secured‘ on a property, the borrower agrees to the lender creating a charge over the property; the deed makes reference to the rights and obligations of both parties as detailed in the Legal Charge, Standard Security or Loan Agreement. Thus the property is known as the ‘security‘.

Security Address
When taking a secured loan or mortgage, the security address is the address of the property which is being offered as collateral for the loan. Where property is offered as security in this way, lenders are generally prepared to offer more flexible terms and lower interest rates

Semi-Detached
Houses that share a common wall or walls

Settlement
The date final payment is made and the property title is handed over

Signatory
A person authorised to access an account

Stamp Duty
State government tax payable at settlement calculated on the sale price

Strata Title
A title for a unit or apartment

Stratum Title
A title for a unit or apartment giving shareholder status in the company managing the common area

Sub-prime Mortgage
Mortgage granted to a person who is unable to borrow money secured on a property from a normal lending source. The reasons the applicant may not be granted a mortgage by a traditional lender, could fall into one of three categories:- Adverse Credit information registered against them; Existing arrears on current mortgage facilities; An inability to satisfactorily prove the level of income required by a traditional lender.

Susceptibility Report
Shows likelihood of future pest infestations.

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Term
Period of a loan expressed in months or years.

Title Deeds
“Torrens Title” Document relevant to present and past ownership of a property. Details names of owners and details of institutions that have registered a charge against the property. Copy held by the first mortgagee lender whilst their charge remains in existence. Another Copy is held at the Land Titles Office.

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Underwriting
The process by which the ability of a prospective borrower to repay a loan is assessed (also the name of the department that undertakes this work). The process takes into account various factors including employment history, financial status, previous credit history and current earnings.

Unencumbered
A property free of liabilities or borrowings.

Unsecured Loan
A loan to be used for any purpose. The credit rating or financial position of the applicant is such that no security for the loan is required.

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Valuation
An assessment made by a professional of the market value of a property.

Variable Interest Rate
An interest rate that can decrease and increase according to the market

Vendor
The party selling a property

Vendor Statement
A declaration by the vendor explaining any terms and conditions regarding the property that may influence the buyer’s decision to purchase

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Zoning
Local authority guidelines regarding the use of land and buildings

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