When purchasing a new property there are plenty of terms used that are used that you may not be familiar with. In saying that here at Funding Force we want each client to be confident and understand everything from start to finish including commonly used finance terms. We have created a list and we will go into detail for each term individually and give you more of an insight.
Redraw Facility
A redraw facility is an option that allows you to make extra repayments on your mortgage and if at any time those extra repayments made give you the option to redraw from your loan.
Guarantor
A guarantor is someone who becomes responsible to make the repayments if the borrower has defaulted or is no longer able to pay.
Bridging Loan
A bridging loan is a loan that is used as a short term option to cover the gap if you have purchased a new property before you have sold your existing.
Appreciation
A home’s appreciation is calculated by the increase in value of the property.
Break costs
This is something that lenders are able to penalize the borrower if they make extra repayments on a fixed rate home loan.
Capital Gains
It is where you are making a profit from the sale for more than its original price.
Equity
Home equity is the difference between the market value of the property and the remaining balance of your mortgage. You will notice that the longer you own your home the more equity you would have built up.