| Absolute Title | A clear title that is free of any liens or judgments. A clear title is normally required before a mortgage is granted. |
| Abstract of Title | A statement usually prepared by an attorney that traces the history of ownership of real property to determine the status of its present title, and includes all items of record that might impair the title, such as liens, charges or encumbrances. |
| Accelerated Amortization | The restructuring of an existing mortgage loan by increasing the monthly payments in order to pay off the loan in a shorter time than the original maturity. |
| Acceleration Clause | A clause commonly included in mortgages and bonds that gives the holder the right to demand the entire outstanding balance be paid in the event of default. |
| Accrued Interest | Interest deemed to be earned on a security but not yet paid to the investor. |
| Actual/360 | One of several day-count conventions that calculates the number of days in a given period divided by 360. |
| Additional Payments | The facility to make extra payments on a home loan account which reduces the term of the loan. |
| Adjustable Rate Mortgage (ARM) | A mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender |
| Agent | An agent is a person who acts on behalf of another person or organisation. A real estate agent acts on behalf of a landlord or owner in the letting or sale of property. |
| Agreement of Sale | A written document in which a purchaser agrees to buy property; which the vendor agrees to sell, under certain agreed conditions, also known as a ?Sales Contract? or Counterpart Contract. |
| Allotment | When a larger area of land is subdivided into smaller pieces, the smaller parcels of land are known as allotments. |
| Amortisation Period | The length of time a borrower has to repay the loan in accordance with the arranged terms (otherwise known as the loan term). |
| Amortisation | Repayment of a mortgage loan through monthly installments of principal and interest; the monthly payment amount is based on a schedule that will allow a borrower to own the home at the end of a specific time. |
| Amortisation Schedule | A table indicating how much of each payment will be directed toward principal, and how much toward interest over the entire life of the loan; it also shows the gradual decrease of the balance of the loan. |
| Annual Percentage Rate (APR) | Calculated using a standard formula, the APR shows the cost of a loan; expressed as a yearly interest rate, it includes the interest, points, mortgage insurance, and other fees associated with the loan. |
| Application Form | The form used to apply for a mortgage loan, containing information about a borrower?s income, savings, assets, debts, and other data. |
| Application Fee | The fee charged by a lender to cover or partially cover the lender?s costs of setting up or establishing the loan. |
| Appraisal (or Valuation) | An estimate of the market value of a piece of real estate made by a competent professional (the appraiser) who knows local property market and prices. |
| Appraised Value | An estimate of the value of the property offered as security for a mortgage loan. This appraisal is done for mortgage lending purposes and may not reflect the market value of the property. |
| Appraiser | An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent. |
| Appreciation | The increase in the value of a property, resulting from changes in market conditions, inflation, or other causes. |
| Approved Seller | An institution approved by the parties to a transaction to sell mortgage loans to a structured vehicle such as a trust. |
| Asset Lender | Lending institution that lends finance based on the value of the asset, which will be held as security. |
| Assignment | Legal transference of a right or a title to a property, to another party. |
| Assignor | A person or institution from whom an agreement, contract or property is transferred to another. |
| Assumable Mortgage | A mortgage that can be transferred from a seller to a buyer; once the loan is assumed by the buyer the seller is no longer responsible for repaying it. |
| Auction | A public sale where the property is sold to the highest bidder. |
| Austraclear Limited | The sole Central Securities Depository (CSD) of debt securities in Australia which offers participants true Delivery versus Payment (DVP), exchanging cash for securities irrevocably and in real-time. |
| Authorised Investments | Assets which are eligible for investment under structured finance programs. |
| Average Life | The average amount of time that will elapse from the date of MBS purchase until principal is repaid based on an assumed prepayment forecast. Alternatively, average life is the average amount of time a dollar of principal is invested in an MBS pool. |
| Average Loan Size | The average monetary value of assets in a securitisation pool or tranche. |
| Backup Servicer | A remunerated entity nominated in a trust deed for being capable of servicing a securitisation in the event of failure by the original servicer. |
| Balloon Mortgage | A short-term loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract. |
| Balloon Payment | The final lump sum payment that is due at the termination of a balloon mortgage. |
| Bank | A deposit-taking institution authorised by the local prudential regulator to carry on that activity, usually governed by that country?s banking act or equivalent. |
| Bank Bill Rate | The Australian Financial Markets Association's bank-bill reference rate, published daily on AAP Reuters page BBSW and on Telerate page 2676. The Australian equivalent of LIBOR and EURIBOR. |
| Banker?s Lien | The right of a Bank to retain a customer?s securities until a liability to the Bank is discharged. |
| Basis Point | One one-hundredth (1/100, or .01) of 1 percent. Yield differences among fixed-income securities are stated in basis points. |
| Beneficial Owner | An entity that benefits from owning a security even if the security?s legal title of ownership is in the name of another entity such as a broker or bank. |
| Bid | The price at which a buyer is willing to buy a security. |
| Bi-Weekly Mortgage | A mortgage requiring payments every two weeks instead of every month. This reduces the time it takes to pay off a 30-year mortgage. |
| Blanket Mortgage | A mortgage covering more than one piece of real estate. |
| Body Corporate | A corporation of the owners of units within a strata (or stratum) titled building. The owners elect a council responsible for the management of the building and common areas. |
| Boilerplate | Term for standard legal language used in loan forms, real estate closings, etc. |
| Bond | A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a promissory note, promise, or bond. |
| Bond Market | Refers to the daily buying and selling of treasury bonds. |
| Book-Entry | A method of registering and transferring ownership of securities electronically, thereby eliminating the need for physical certificates. |
| Borrower | A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms (also called a mortgagor). |
| Boundary | A line separating adjoining properties. |
| Break Costs | Penalty charges for ?breaking? or discontinuing the agreed fixed term of a loan. |
| Break Payment | The cost payable by a contracted party under pre-agreed circumstances for terminating part of all of a contract. |
| Bridging finance | Finance obtained over a short period as a prelude to long term funding. |
| Broker | An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not actually lend the money. |
| Building Code | Regulations and safety standards within a specific area that determine the design, construction, and materials used in building. |
| Building Inspection | This inspection is generally carried out prior to the purchase of a property to ensure the building is structurally sound. |
| Building Permit | A certificate issued by a municipality to the owner/contractor prior to any building being erected or repaired. |
| Building Regulations | Rules of a legal or statutory nature by which local councils control the manner and quality of buildings. They are designed to ensure public safety, health and minimum acceptable standards of construction. |
| Business Day | Those days that are neither weekends nor public holidays as gazetted under the relevant Government legislation. |
| Buy-Down (Honeymoon Rate) | Occurs as the lender subsidises the mortgage, by lowering the interest rate over the first few years. To begin, the payments are low; however, they increase as the subsidy expires. |
| Calculation Agent | An entity contracted to determining interest and redemption amounts according to a formula prescribed in an offering document. |
| Call Protection | A feature that provides assurance to an investor that early or unscheduled redemption of a particular security will not occur due to a decline in interest rates. |
| Call Provision | A clause in a mortgage giving the lender the right to demand and receive payment of the balance of the unpaid principal in full under certain conditions. |
| Capital Gains Tax | An Australian Government tax on the monetary gain made on the sale of an asset (excluding a person?s principal residence) bought and sold after September 1985. |
| Capital Improvement | A structure or major piece of equipment built or installed to permanently add value and capacity to property. |
| Cashflow Allocation | Process of allocating monies in accordance with the cashflow methodology described in transaction documents. |
| Caveat | A caveat is lodged upon a title to land to indicate that another party other than the owner claims a right over or interest in the property. |
| Certificate of Completion | A document issued by an architect or engineer stating that a construction project has been completed in accordance with approved terms, conditions, plans and specifications. |
| Certificate of Deposit | A term deposit held in a bank that pays interest to the depositor. |
| Certificate of Title | A document identifying the ownership of land. It shows who owns the land and whether there are any mortgages or other restrictions on it. This document (if issued) is usually held by the lender as security for a loan. Also known as a Title Deed. |
| Chain of Title | An analysis of the transfers of title to a piece of property over time. |
| Charge (over property) | The term used to describe any right established over a borrower?s property to secure a debt or performance of an obligation. |
| Charge-Offs | The value of non-recoverable loan amounts charged against loss reserves. |
| Chattel Mortgage | A loan secured by personal property rather than real estate. |
| Chattels | Chattels are personal property, such as clothing, appliances and furniture. |
| Class of Notes | Relates to different types of notes with different characteristics within a particular securitisation structure. Different classes relate to different tranches of subordination within a given structure. |
| Clear Title (Unencumbered Title) | A seller has a clear title when there are no restrictions (such as an outstanding mortgage) preventing the sale, and when ownership of the seller has been established. |
| Clearstream | European-based supplier of post-trading securities services. It ensures that cash and securities are promptly and effectively delivered between trading parties. It also manages, keeps safe and administers securities that it holds on behalf of its customers. |
| Closing (Settlement or Completion) | The time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives legal title from the seller. |
| Closing Costs (Settlement Costs, Disbursements) | The additional fees and expenses associated and due on the closing date, such as legal fees, disbursements. |
| Closing Date (Completion Date, Settlement Date) | The date on which the sale of a property becomes final and the new owner takes possession. |
| Collateral Security | Additional or supporting security given in addition to the principal security. |
| Collection | When a borrower becomes delinquent, the loan is deemed to be in ?collection?. |
| Collection Account | A separate bank account established to have securitized receivables? monies remitted and over which controls are in place to prevent the originator from dealing with the money held in the collection account apart from appropriate contractual undertakings. |
| Commercial Mortgage Loan (Income Property Loan, Investment Loan) | A mortgage loan secured by real estate used by a business or to generate income. |
| Commitment | A formal offer by the lender, which states the terms under which it has been agreed to lend money, also known as a ?loan commitment?. |
| Common Areas | Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project?s homeowners? association (or a cooperative project?s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. |
| Common Law | An unwritten body of law based on general English custom. |
| Community Property | Jointly owned property, such as property belonging to a married couple. |
| Comparable Sales | Used to determine a property?s market value, based on the recent sales of other properties in the surrounding areas. |
| Compulsory Acquisition of Land | The Australian Government is able to compulsorily acquire an interest in land anywhere in Australia for certain public purposes, by negotiated agreement and independent valuation. |
| Condominium (Apartment, Unit, Flat, Strata Title Property) | A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. |
| Conduit | An entity that issues mortgage-backed securities backed by mortgage loans it acquires from primary lenders. |
| Conforming Loan | A mortgage loan that meets pre-determined standard criteria relating to property type, valuation, and borrower affordability. |
| Constant Prepayment Rate | The estimated percentage of the remaining loan balance that has either been repaid, or is expected to be repaid, in excess of the scheduled principal repayments. |
| Construction Loan | A short-term loan to finance construction costs. The lender makes payments to the builder at certain intervals during construction. |
| Consumer Credit Code | Legislation designed to protect the rights of the individual (personal consumer) by ensuring banks and other financial institutions all adhere to the same rules when providing personal, domestic or household credit. Also known as the Uniform Consumer Credit Code or UCCC. |
| Contract of Sale | A written agreement outlining the terms and conditions for the purchase or sale of property. |
| Conveyance | The legal process for the transfer of ownership of real estate. |
| Coupon Rate | Stated annual percentage of interest paid on a fixed-income investment. |
| Cover Note | A guarantee of temporary property insurance before the implementation of a formal policy. |
| Credit Bureau | An independent bureau which records and holds credit information, credit defaults, and other personal records. |
| Credit Enhancement | An enhancement to the expected performance of a fixed-income security, achieved by a guarantee or insurance from a highly-rated creditworthy party. Enhancements can also be achieved by tranching fixed-income securities into several classes with differing degrees of subordination. |
| Credit History | A record of an individual?s repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk. |
| Credit Rating | A statement of opinion from a Designated Ratings Agency as to the relative creditworthiness of a specific financial instrument. |
| Credit Report | A report of an individual?s credit history prepared by a credit bureau and used by a lender in determining a loan applicant?s creditworthiness. |
| Credit Risk | Risk of a default by the issuer or other party in its financial obligations to the investor. |
| Credit Support | See Credit Enhancement. |
| Credit Union | A cooperative which operates similarly to a bank, but is owned and controlled by people who use its services. |
| Crown Leasehold Land | Land owned by the Government, and leased to an occupier, usually for very long periods up to 99 years. |
| Currency Swap Providers | The parties to a currency swap transaction. |
| CUSIP Number | A unique, nine-digit identification number permanently assigned by the Committee on Uniform Securities Identification Procedures to each publicly traded security at the time of issuance. |
| Daily Interest | Interest calculated on a daily basis. |
| Default | Failure to abide by the terms of a mortgage or loan agreement. A failure to make loan payments (defaulting on the loan) may result in the mortgage holder taking legal action to repossess the mortgaged property. |
| Deferred Interest | Deferring unpaid interest by adding it to the loan balance; occurs when a mortgage?s monthly payment is less than adequate to cover the note rate (see Negative Amortization). |
| Delinquency | Failure to make mortgage payments when mortgage payments are due. |
| Deposit Bond | Guarantees that the purchaser of a property will pay the full deposit by the due date. Institutions providing deposit bonds act as a guarantor that payment will be made. |
| Designated Rating Agency | A ratings agency designated as such within a structured finance program. |
| Direct Debit | Where the Lender directly debits (deducts) a payment from the borrower?s bank account. |
| Disbursements | Solicitors? incidental costs involved when dealing with client on behalf of the Lender, e.g. searches, certificates pest reports, etc. |
| Discharge Fees | An administration fee to cover the costs incurred in finalising a loan account. |
| Discharge of Mortgage | A document signed by the lender and given to the borrower when a mortgage loan has been repaid in full. |
| DSR | Debt Service Ratio. |
| Due-on-Sale Clause | A provision in a mortgage or deed of trust enabling the lender to demand instant payment of the balance of the mortgage when the mortgagor sells the home. |
| Duty (or Stamp Duty) | A Government tax on certain financial transactions. |
| Early Repayment | Amounts repaid under a mortgage loan in excess of the scheduled amounts due from time to time. |
| Easement | The right to use another person?s land for a specific purpose, such as public utilities or a driveway. |
| Effective Interest Rate | A variable interest rate translated into the rate that would be paid if the interest was compounded on a semi-annual basis. |
| Eligibility Criteria | The criteria and characteristics of mortgage loans that determine their eligibility for inclusion as underlying collateral in a mortgage pool. |
| Encroachment | An improvement that intrudes illegally on another?s property. |
| Encumbrance | Any kind of claim against property, such as mortgages, leases, easements, or restrictions. |
| Equity | A home owner?s financial interest in a property. Equity is the difference between the price for which a home could be sold and the amount still owed on its mortgage. |
| Establishment Fees | Fees payable to a lender to cover the costs of setting up a loan. |
| EURIBOR | Euro Interbank Offered Rate is the rate at which euro interbank term deposits within the Euro zone are offered by one prime bank to another prime bank. |
| Euroclear | A centralized system widely used by financial market participants to settle securities transactions. |
| Excess Spread | Remaining net interest payments from the underlying assets of an asset-backed security, after all payables and expenses are covered. |
| Exit/Prepayment Fees | Fees charged by the lender when a loan is partially or wholly paid off before the end of its term |
| Extension Risk | Risk that prepayments will be slower than the assumed rate causing later-than-expected return of principal. |
| Face Value | The par value of a security, as distinct from its market value. |
| Factor | A decimal value reflecting the proportion of the outstanding principal balance of a mortgage security, which changes over time, in relation to its original principal value. |
| Fixed-Rate Loan (Fixed-Rate Mortgage) | A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change. |
| Floating-Rate Mortgage | Another term for a variable-rate mortgage. |
| Flood Certificate | A certificate that identifies those properties situated in ?special flood hazard areas? and may require flood insurance. |
| Flood Insurance | Insurance that protects homeowners against losses from a flood; if a home is located in a flood-prone area, the lender will require flood insurance before approving a loan. |
| Forbearance | Postponing some or all loan payments when a borrower is delinquent. |
| Foreclosure | Legal process by which a borrower in default under the terms of a mortgage ceases to have an interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being used to reduce or clear the mortgage debt. |
| Freehold | Description of land ownership. |
| Fully Amortizing Loan | A loan whereby principal and interest will be repaid fully through regular installments until the maturity date of the loan. |
| General Insurance Policy | Insurance protecting against loss to property caused by fire, some natural causes, vandalism, etc. depending upon the terms of the policy. |
| Instalment | The regular periodic payment that a borrower agrees to make to the lender. |
| Interest Only | A term loan requiring payments only of interest, without principal. |
| Interest Rate Swap | An agreement between two parties to switch (or swap) payments of differing interest rates for a certain period. |
| Interest Rate Swap Provider | The parties to an interest rate swap transaction. |
| Investment Property | A property purchased for the sole purpose of earning a return on the investment, either in the form of rent or capital gain. The owner does not live in the property. |
| ISDA | The International Swaps and Derivatives Association is a trade organization of participants in the market for swap and currency hedging instruments. |
| ISIN Number | International Securities Identification Number, a code that uniquely identifies a specific securities issue. |
| Issue Date | The date on which a security is deemed to be issued or originated. |
| Issuer | An entity which issues and is obligated to pay amounts due on securities. |
| Land Registry Office (Titles Office) | Central repository for all land titles, operated by the Government. |
| Late Charge | A penalty fee imposed by a lender for delinquent payments. |
| Lease | A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may occupy the property for a specified period of time. |
| Lending Institution | An organization that makes loans. |
| Lending Policy | An institution?s statement of its basic lending philosophy, including standards, guidelines, and limitations that are to be observed and adhered to in the process of deciding whether to grant a loan. The policy must adhere to applicable law and regulations. |
| Liability Insurance | Insurance offering protection from losses due to homeowner or property owner?s negligence that results in injury or property damage to another party; it is usually part of a homeowner?s insurance coverage. |
| LIBOR | London Interbank Offered Rate, the interest rate charged on short-term inter-bank loans. |
| Line of Credit | A pre-established loan authorization with a specified borrowing limit extended by a lending institution to an individual or business based on creditworthiness. |
| Line of Credit Loan | A flexible loan arrangement with a specified limit to be used at a borrower?s discretion. |
| Loan Origination Fee | The initial service charge imposed by a lending institution on a borrower for placing a loan on the institution?s books. |
| Loan Proceeds | The net amount of funds that a lending institution disburses under the terms of a loan. |
| Loan Processing | All the steps taken by a lending institution from the time a loan application is received to the time the loan is settled (closed), including taking the application, conducting the credit investigation, evaluating the loan terms and other work. |
| Loan Servicing | Work performed to collect and process loan payments during the life of a loan. They include collecting payments of principal and interest, and forwarding funds to an investor. |
| Loan Settlement Statement | A document prepared for the borrower at the loan settlement (closing) showing all disbursements to be made. |
| Loan Terms and Conditions | The specifications in a loan agreement that prescribe the loan amount, interest rate, length of time in which to repay the loan, and any other enforceable agreements entered into by the borrower and the lender. |
| Loan-To-Value (LTV) Ratio | See LVR. |
| Low-Doc Loan | A loan where the application states the source and the affordability of the mortgage applied for without providing supporting documentation. |
| Lump Sum Repayments | Additional loan repayments made over and above the minimum repayment requirement. |
| LVR (Loan to Value Ratio) | The ratio of the amount lent, to the valuation of the property. Also known as ?LTV?. |
| Maturity Date of a Loan | The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable. |
| Maturity Date of MBS | The last possible date on which the last payment of the longest loan may be paid (also known as ?stated maturity?). |
| Maximum Loan Amount | The maximum amount that can be borrowed based on an applicants? disposable income, deposit, and the purchase price of the property. |
| Mortgage | A form of security for a loan taken over real estate. The lender, as mortgagee, has the right to take (repossess) the real estate if the mortgagor (the borrower) fails to repay the loan. |
| Mortgage Broker | A firm that originates loans for mortgage managers and lenders. |
| Mortgage Insurance | A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. |
| Mortgage Loan | An advance of funds from a lender (mortgagee) to a borrower (mortgagor), secured by real estate and evidenced by a document called a mortgage. |
| Mortgage Manager | A firm responsible for managing a borrower?s loan. |
| Mortgage Origination | The making of a new mortgage, including all steps taken by a lender to attract and qualify a borrower, process the mortgage loan, and arrange the settlement and funding. |
| Mortgage-Backed Securities | Securities that are backed by a pool of mortgage loans, secured by mortgage over real estate. |
| Mortgagor | The owner of real estate (borrower) who pledges the property as security for the repayment of a mortgage loan. |
| Negative Amortization | The result of a mortgage repayment plan in which the borrower makes payments of less than the interest due. Unpaid interest is then added to the outstanding loan balance, causing the outstanding loan balance to increase further. |
| Negative Gearing | Gearing an investment so that the cost to maintain it exceeds the income produced by the investment, leading to a possible reduction in the investor?s taxable income. |
| Note | A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a promissory note, promise, or bond. |
| Notice of Default | Formal notice given to a borrower that a default has taken place, and of possible legal action. |
| Original Face | The face value or original principal amount of a security on its issue date. |
| Original Principal Balance | The total principal owing on a mortgage before regular payments commence. |
| Origination | The process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal. |
| Owner Occupied Property | A property that is occupied as a residence by the legal owner of the property |
| Paying Agent | An entity responsible for making the payment of interest and principal to note holders on behalf of the note issuer. |
| Perfection of Title | The legal process of removal of any actual or potential claims against a title. |
| Pool | A collection of mortgage loans assembled by an originator or master servicer as the basis for a security |
| Portability of Mortgage | The ability to transfer an existing mortgage to a replacement property, subject to valuation and legal documentation. |
| PostCode | A standardised coding system for property location areas, also known as Zip Codes. |
| Power of Attorney | A written authorisation to another person, or persons, to perform certain acts as if they were the signer. |
| Prefunding | Cash retaining in a structured finance program to be used for subsequent purchases of pool assets. |
| Prepayment | Any amount paid to reduce the principal balance of the loan before the due date or any amount in addition to the minimum repayment. |
| Prepayment Penalty | A fee paid to a lender by a borrower upon repayment of all or part of the principal of a loan before it is due. The prepayment penalty compensates the lender for the loss of costs and interest that would have been earned had the loan remained in effect for its full term. |
| Prepayment Risk | Risk that the mortgages underlying the security are repaid faster or slower than expected. |
| Principal and Interest Loan | A loan in which both the principal and the interest are paid during the term of the loan. |
| Principal Balance | The outstanding balance of principal on a mortgage. |
| Real Estate | Land and all physical property on, below or attached to the land. Houses, sewers, trees and fences are all part of real estate. |
| Real Estate Agent | A person who is licensed to negotiate and arrange sales of real estate. |
| Redraw Facility | The component of a variable rate loan that allows borrowers to make extra repayments, and/or re-draw on these funds if required. |
| Refinance | To pay off an existing mortgage and arrange for a new mortgage, generally with a different lender. |
| Reserve Price | Specified minimum price acceptable to a seller at a real estate auction. |
| Right of Way | Authority granted to others by the owner of land to pass across the land, sometimes in the form of an access easement. Streets and sidewalks are normally part of the public right of way. |
| Searches | Examinations or research tasks usually carried out by solicitors on the purchaser?s and lender?s behalf to confirm information about the property or the purchaser, prior to settlement. |
| Seasoned Mortgage | A mortgage that has been in effect for some time and on which principal and interest payments are being made on time. |
| Second Mortgage | A mortgage loan granted when there is already one other mortgage registered against the property, and which ranks behind the first mortgage in terms of repayment rights. |
| Security | Real estate that is pledged as collateral for a loan. |
| Security Agreement | A document that contains a description of the loan collateral. It establishes the lender?s rights to the collateral in the event of default on the loan. |
| Serviceability | Ability of borrower to make and meet repayments on a loan, based on the borrowers expenses and income(s). |
| Servicing Fee | The amount charged by a mortgage loan servicer to generally manage a mortgage loan on behalf of the investor. |
| Settlement (Closing) | The process of finalising a loan between borrower and lender. |
| Site Value | The value of basic land, without improvements. |
| Solicitor | Also known as a lawyer or attorney. |
| Split loan | A combination of loan types forming one loan, such as a partial fixed/variable interest rate loan. |
| Stamp Duty | Government charges payable in respect of certain mortgage and property-related transactions. |
| Strata Title (also Commonhold or Condominium) | A form of ownership for multi-level apartment blocks, which have apartments at different levels or "strata". |
| Subdivision | A housing development that is divided into individual lots, which are then sold or leased. |
| Survey | A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any buildings. |
| Sweat Equity | Equity created by a purchaser carrying-out work on a property instead of having the work doE |
| Teaser Rate (Honeymoon Rate) | An initial, below-market interest rate offered on loans for a short period of time, at the end of which market rates are applied for the remaining term of the loan. |
| Term | The duration of a loan from commencement date until scheduled repayment date. |
| Title | A legal document evidencing a person?s right to or ownership of a property. |
| Title Defect | Any fact, circumstance or lawful right that could successfully claim all or part of a property or could challenge the ownership of the property. |
| Title Insurance | An insurance policy that protects the a borrower or a lender against losses resulting from problems with the title of a property, or unknownE |
| Title Search | A check of public records to ensure that the seller is the owner of the real estate and that there are no unsettled liens or other claims against the property. |
| Torrens System | Government system whereby ownership and all dealings on a property are detailed on a single legal document known as a Certificate of Title or Deed of Grant. |
| Underwriting | The process of analysing a loan application to determine the amount of risk involved in making the loan, including a review of the borrower?s credit history and repayment capacity, and of the property value. |
| Unencumbered Property | Property that is free of debts or liens. |
| Unimproved Land | Land in its natural state, without any improvements or structures on it. |
| Variable-Rate mortgage | A mortgage loan for which the rate of interest changes with market conditions. |
| Weighted Average Coupon (WAC) | The average coupon rate of the underlying mortgage loans or pools that serve as collateral for a security, weighted by the remaining principal balance. |
| Weighted Average Maturity (WAM) | The average remaining tererm of the loan. |
| Withholding Tax | A Government tax on dividends and interest sent abroad to non-residents. |
| Zoning | Statutory descriptions of the allowable uses of land as set out by local councils or planning authorities. |
