Home Loan Glossary Terms
A major item you own, like a home, car, boat or investment.
A way to sell where all the buyers are in one place and make bids (offers) until only one buyer is still bidding. An auctioneer runs the auction. The person selling usually sets a reserve price and doesn't have to sell if the bids are under this amount. If you buy at auction you're committed to going through with the purchase, so you need to check everything out first and have your finance ready, including the money for your real estate deposit which is paid to the auctioneer on the day.
You'll see this term on your Rating Valuation (RV). It is the total value of your property, including the land and buildings but not chattels (things like light fittings, carpets and curtains).
Certificate of insurance
A certificate from your insurance company to confirm that your house is insured – your bank will probably ask to see this.
Code of Compliance Certificate (CCC)
A certificate from your local authority to say the building complies with building consent requirements. Check all buildings and alterations have a certificate before you buy. The LIM (Land Information Memorandum) should contain compliance details.
This term has two meanings when it comes to buying a home. To the bank it's the amount you put towards the home itself. To a real estate agent it's a payment you give them once you agree to buy the home (this money goes to the seller when your agreement becomes unconditional – or it's returned to you if the sale doesn't go through).
Security has several meanings. When you get a home loan your home is the security for the loan – meaning the lender can sell the home if you can't repay the money. The term is often used to mean certain types of investment such as bonds or shares.
With a table loan you have a set payment each fortnight or month. At first most of the money goes towards the interest you owe – but as your loan starts to go down more of each payment goes towards repaying the loan itself.
Term has several meanings. When you get a loan it means the time you take your home loan out for – many home loans are for 20 or 30 years. It can also be how long your lease is for if you have a leasehold property. And it means the length of time an investment is for.