If you are planning to avail a loan for your dream house, you might get confused by the number of technical terms that many financial institutions or the banks will use as these may sound new to you. It’s time to acknowledge some of the home loans terminology as it will ease out the process of availing home loans in Australia.
Have a quick glance at the list of the technical terms used by the banks while availing a home loan.
Resale
When you buy a home from someone who is the owner and is now selling it, then term resale is used. This indicates that you are not actually buying a brand new home directly from the builder.
Margin
If you are borrowing a loan, you will find that the bank will not lend you the whole amount. It will rather offer you 80-90% of the amount of the cost of home and you will have to pay the balance 20-10 %. Thus, the amount that you will have to pay from your pocket is called margin.
Full disbursement
When you pay the entire cost in one go, the company will hand over the entire payment to the seller. The cheque will be disbursed only when you have submitted all the necessary documents and have made the down payment. In case you are purchasing an apartment from a builder that is under construction, the company will not release the whole payment in one go. Thus, the money will be released only in stages. This is considered as partial disbursement.
Offer letter
Once your loan is sanctioned, you will be provided with an offer letter that will include a number of details -
· Rate of interest
· Fixed rate of interest
· Loan amount
· Tenure of the loan
Post-dated cheques
These types of cheques are dated ahead of time and cannot be processed until date. These cheques are generally addressed to the home loan company and are signed by you.
Thus, knowing these terminologies will help to get you off to a fly.
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