Navigating the real estate market can be overwhelming, with a plethora of unfamiliar terms and phrases. We understand that this can make the process of buying or renting a property daunting, which is why we have created this guide to help you understand some of the most commonly used property jargons.
From the early stages of searching for a property, to signing the contract and completing the transaction, this guide will help you to understand the terms used by estate agents, conveyancers, and other professionals in the real estate industry. We hope that this will make your experience of finding a new home or investment property more straightforward and enjoyable.
In this guide, you will find definitions for terms such as “amortization,” “deposit,” “escrow,” and many more. The guide is continually updated to reflect the latest changes in the industry and the terminologies used.
Accounts payable – a record of all unpaid short-term (less than 12 months) invoices, bills and other liabilities. Examples of accounts payable include invoices for goods or services, bills for utilities and tax payments due.
Accounts receivable – a record of all short-term accounts (less than 12 months) from customers you sell to but are yet to pay. These customers are called debtors and are generally invoiced by a business.
Accounts receivable finance – see Factoring.
Accrual accounting – an accounting system that records transactions at the time they occur, whether the payment occurs now or in the future.
Amortisation – the process of offsetting assets such as goodwill and intellectual property over a period of time. See also Depreciation.
Assets – things you own. These can be cash or something you can convert into cash such as property, vehicles, equipment and inventory.
Audit – a check by an auditor or tax official on your financial records to check that you account for everything correctly.
Bad debts – money that is unlikely to be paid in the near future.
Balance sheet – a snapshot of a business on a particular date. It lists all of your assets and liabilities and works out the net assets.
Balloon payment – a final lump sum payment due on a loan agreement. Loans with a larger final ‘balloon payment’ have lower regular repayments over the term of the loan.
Bank reconciliation – a cross-check that ensures the amounts in your cashbook match the relevant bank statements.
Bankrupt – an individual is bankrupt when they cannot pay their debts and aren’t able to reach an agreement with their creditors.
Bankruptcy – a process where an individual is legally bankrupt and an appointed trustee manages their assets and financial affairs.
Benchmark – a set of conditions against which you can measure a product or business
Bill of sale – a legal document for the purchase of property or other assets that details the purchase, where it took place, and for how much.
Bookkeeping – the process of recording the financial transactions of a business.
Bootstrapping – where a business funds its growth purely through personal finances and revenue from the business.
Bottom line – see Net profit.
Break-even point – the exact point when a business’s income equals its expenses.
Budget – a listing of planned revenue and expenditure for a given period.
Capital – wealth in the form of money or property owned by a business.
Capital cost – a one-off substantial purchase of physical items such as plant, equipment, building or land.
Capital gain – the amount gained when an asset sells above its original purchase price.
Capital growth – an increase in the value of an asset.
Cash – includes all money available on demand, including bank notes and coins, petty cash, certain cheques, and money in savings or debit accounts.
Cash accounting – an accounting system that records transactions at the time you actually receive money payment.
Cash book – a daily record of all cash, credit or cheque transactions received or paid out by a business.
Cash flow – the measure of actual cash flowing in and out of a business.
Cash incoming – money that is flowing into the business.
Cash outgoing – money that is flowing out of the business.
Chart of accounts – an index of the accounts a business will use to classify transactions. Each account represents a type of transaction such as asset, liability, owner’s equity, income, and expense.
Chattel mortgage – similar to a hire-purchase agreement although the business owns the asset from the start. Chattel mortgages require regular ongoing payments and typically provide the option of reducing the payments through the use of a final ‘balloon’ payment.
Collateral – see Security.
Commercial bill (also known as a bill of exchange) – a form of commercial loan on an interest only basis, or interest reducing basis. Commercial bills typically require some sort of security and suit short-term funding needs such as inventory.
Contingent liability – a liability where payment is made only if a particular event or circumstance occurs.
Cost of goods sold – the total direct costs of producing a good or delivering a service.
Credit – a lending term for when a customer purchases a good or service with an agreement to pay at a later date. This could be an account with a supplier, a store credit card or a bank credit card.
Creditor – a person or business that allows you to purchase a good or service with an agreement to pay at a later date. A creditor is also anyone who you owe money to, such as a lender or supplier.
Credit limit – a dollar amount that you cannot exceed on a credit card or the maximum lending amount offered for a loan.
Credit rating – a ranking applied to a person or business based on their credit history that represents their ability to repay a debt. Visit ASIC’s MoneySmart website to learn more about credit ratings– external site.
Credit history – a report detailing an individual’s or business’s past credit arrangements. A lender may seek a credit history when assessing a loan application. Visit ASIC’s MoneySmart website to read more about credit reports– external site.
Crowdfunding – is a way of financing your business idea through donations of money from the public. This usually occurs online, through a crowdfunding website.
Current asset – an asset in cash or something you can convert into cash within 12 months.
Current liability – a liability that is due for payment within 12 months.
Debit – in double-entry bookkeeping, a debit is an entry made on the left-hand side of a journal or ledger representing an asset or expense.
Debt – any amount that you owe including bills, loan repayments and income tax.
Debt consolidation – the process of combining several loans or other debts into one for the purposes of obtaining a lower interest rate or reducing fees.
Debt finance – money provided by an external lender, such as a bank or building society.
Debtor – a person or business that owes you money.
Debtors finance – See Factoring.
Default – a failure to pay a loan or other debt obligation.
Depreciation – the process of offsetting an asset over a period of time. You can depreciate an asset to spread the cost of the asset over its useful life.
Disbursements – money that a business spends.
Discount – a reduction applied to a full priced good or service. See also Mark down.
Double-entry bookkeeping – is a bookkeeping method that records each transaction in 2 accounts, both as a debit and a credit.
Drawings – personal expenses paid for from a business account.
Drip pricing – external site – is when one price is presented at the beginning of an online shopping experience. Gradually, incremental fees and charges are added (or ‘dripped’) as you progress, for example, when buying a plane ticket. Drip pricing can result in the customer paying a higher price for a service or product than they first thought. However, you are required to show fees and charges at the beginning of an online shopping process and not gradually add them in.
Employee share schemes – external site – where you give your employees the opportunity to buy shares in your company. Other terms include an ’employee share purchase plan’ or an ’employee equity scheme’.
Encumbered – an encumbered asset is one that is currently put forward as security or collateral for a loan.
Equity – the value of ownership interest in the business, calculated by deducting liabilities from assets. See also Owner’s equity.
Equity finance – money provided to a business in exchange for part ownership of the business. This can be money invested by the business owners, friends, family, or investors like business angels and venture capitalists.
Excise duty – an indirect tax levied on certain types of goods produced or manufactured in Australia including petrol, alcohol, tobacco and coal.
Facility – an arrangement such as an account offered by a financial institution to a business (such as a bank account, a short-term loan or overdraft).
Factoring (also known as debtor’s finance and accounts receivable finance) – when a factor company buys a business’s outstanding invoices at a discount. The factor company then chases up the debtors. Factoring is a way to get quick access to cash, but can be quite expensive compared to traditional financing options.
Finance – money used to fund a business or high value purchase.
Financial year – a 12-month period typically from 1 July to 30 June.
Financial statement – a summary of a business’s financial position for a given period. Financial statements can include a profit and loss, balance sheet and cash flow statement.
Fixed asset – a physical asset used in the running of a business.
Fixed cost – a cost that is not part of producing a good or service.
Fixed interest rate – when the interest rate of a loan remains the same for the term of the loan or an agreed timeframe.
Float – when a private company offers shares in the company to the public for the first time. See Initial public offering.
Forecast – a list of future financial transactions. Forecasts help to plan a more accurate budget.
Fringe benefits – non-monetary benefits, such as company cars and mobile phones, included as part of a salary package.
Fully drawn advance – is a long term loan with the option to fix the interest rate for a period. These loans are usually secured and can help fund a new business or equipment.
Goodwill – an intangible asset that represents the value of a business’s reputation.
Gross income – the total money earned by a business before you deduct expenses.
Gross profit (also known as net sales) – the difference between sales and the direct cost of making the sales.
Guarantor – a person who promises to pay a loan in the event the borrower cannot meet the repayments. The guarantor is legally responsible for the debt.
Initial public offering (IPO) – when a company first offers shares on the stock market to sell them to the general public. Also known as floating on the stock market. Visit ASIC’s MoneySmart website for more information about IPOs– external site.
Insolvent – a business or company is insolvent when they cannot pay their debts as and when they are due.
Intangible assets – non-physical assets with no fixed value, such as goodwill and intellectual property rights.
Interest – the cost of borrowing money on a loan or earned on an interest-bearing account.
Interest rate – a percentage used to calculate the cost of borrowing money or the amount you will earn. Rates vary from product to product and generally the higher the risk of the loan, the higher the interest rate. Rates may be fixed or variable.
Inventory – a list of goods or materials a business is holding for sale.
Investment – the purchase of an asset for the purpose of earning money such as shares or property. Visit ASIC’s MoneySmart website for more about personal investing– external site.
Invoice – a document to a customer to request payment for a good or service received.
Invoice finance – finance based on the strength of a business’s accounts receivable. This form of financing is similar to factoring, except that the invoices or accounts receivable remain with the business. See also Factoring
Key performance indicator (KPI) - (in relation to managing performance) A type of performance measurement (using either qualitative or quantitative data) on the efficiency or effectiveness of activities in achieving purposes. Related terms:evaluation and monitoring.
Kangaroo bond - Bond issued by a foreign company or body (such as the Asian Development Bank) in Australian dollars. Also known as a Matilda Bond.
Liability – any financial expense or amount owed.
Line of credit – an agreement allowing a borrower to withdraw money from an account up to an approved limit.
Liquidate – to quickly sell all the assets of a company and convert them into cash.
Liquidation – the process of winding up an insolvent company. An appointed administrator will do this by ceasing business operations, selling assets, and paying creditors and shareholders.
Liquidity – how quickly you can convert assets into cash.
Loan – a finance agreement where a business borrows money and pays it back in instalments (plus interest) within a specified period of time.
Loan to value ratio (LVR) – your loan amount shown as a percentage of the market value of the property or asset that you purchase. The ratio helps a lender work out if they can recover the loan amount if the loan goes into default.
Margin – the difference between the selling price of a good or service and the profit. Margin is generally shown as a gross margin percentage which shows the proportion of profit for each sales dollar.
Margin call – when the value of a property or asset falls below a certain loan to value ratio (LVR). For higher risk loans such as margin loans, the lender will request further payment to bring the LVR back to the agreed percentage. See also Loan to value ratio (LVR).
Mark down – a discount applied to a product during a promotion or sale for the purposes of attracting sales or for shifting surplus or discontinued products. See also Discount.
Mark up – the amount added to the cost price of goods, to help determine a selling price. Essentially it is the difference between the cost of the good/service and the selling price. It does not take into account what proportion of the amount is profit.
Maturity date – when a loan’s term ends and all outstanding principal and interest payments are due.
Net assets (also known as net worth, owner’s equity or shareholder’s equity) – the total assets minus total liabilities.
Net income – the total money earned by a business after tax and other deductions.
Net profit (also known as your bottom line) – the total gross profit minus all business expenses.
Net worth – see Net assets.
Overdraft facility – a finance arrangement where a lender allows a business to withdraw more than the balance of an account.
Overdrawn account – a credit account that has exceeded its credit limit or a bank account that has had more than the remaining balance withdrawn.
Overheads – the fixed costs associated with operating a business such as rent, marketing, utilities and administrative costs. See also Fixed costs.
Owner’s equity – see Net assets.
Personal property – covers any property someone can own, except for land, buildings and fixtures. Examples include goods, plant and equipment, cars, boats, planes, livestock and more.
Personal Property Security Register (PPSR) – the PPSR– external site replaces a number of registers of security interests. It provides a single national noticeboard of security interests in personal property.
Petty cash – cash for small miscellaneous purchases such as postage.
Plant and equipment – a group of fixed assets used in the operation of a business such as furniture, machinery, fit-out, vehicles, computers and tools.
Principal – the original loan amount borrowed or the remainder of the original borrowed amount that is still owing (excluding the interest portion).
Profit – the total revenue a business earns minus the total expenses. See also Revenue.
Profit and loss statement (also known as an income statement) – a financial statement listing sales and expenses. Use it to work out the gross and net profit of a business.
Profit margin – see Margin.
Projection – see Forecast.
Quant - A specialist usually working in portfolio management or bond research who develops systems that map past movements in financial markets with a view to predicting future equity, commodity and currency values.
Quartile - Investment surveys rank investment managers according to the investment performance of their products. Managers in the top quarter of those participating in the survey are said to be “top quartile performers”. Similarly, an investment manger’s performance may fall in the second, third or fourth quartile, or be simply “above average” (quarters one and two combined).
R&D – stands for ‘research and development’. Businesses conduct research and development to innovate, create new products and find better ways of doing things.
Receipts – a document given to a customer to confirm payment and to confirm the sale of a good or service.
Record keeping – the process of keeping or recording information that explains certain business transactions. Record keeping is a requirement under tax law.
Refinance – when a new loan helps to pay off an existing one. Reasons to refinance include: extending the original loan over a longer period of time, reduce fees or interest rates, switch banks, or move from a fixed to variable loan.
Rent to buy – a finance arrangement where you purchase something through an initial deposit and then ‘lease’ it while pay it off. After the final payment, the purchaser has the option (but no obligation) to buy the good or continue leasing. See also Hire-purchase.
Repossess – the process of a bank or other lender taking ownership of property/assets for the purpose of paying off a loan in default.
Retention of title – a clause in contracts where a buyer may receive property, but doesn’t take legal ownership until the full price is paid.
Return on investment (ROI) – a calculation that works out how efficient a business is at generating profit from the original equity from the owners/shareholders. It’s a way of thinking about the benefit (return) of the money you invest into the business. To calculate ROI, divide the gain (net profit) of the investment by the cost of the investment. The ROI then becomes a percentage or a ratio.
Return on investment (ROI) formula example – Annie buys $1000 worth of stocks and sells the stocks a year later for $1500. The net profit is $500. ROI = (500/1000) = 0.5 x 100 = 50%. Annie’s ROI on the stocks is 50%.
Revenue (also known as turnover) – the amount earned before expenses, tax and other deductions.
Single-entry bookkeeping – a bookkeeping method within a cash accounting system that records one side of each transaction.
Scam – a deliberate and targeted deception to obtain money or information unlawfully.
Security (also known as collateral) – property or assets that a lender can take ownership of when repayment of a loan does not occur.
Shareholder’s equity – see Net assets.
SMSF – stands for self-managed superannuation fund– external site. An SMSF is a way of saving for your retirement. Unlike other super funds, an SMSF is self-managed, which means you’re responsible for making sure the super fund complies with super and tax laws. ASIC’s MoneySmart also has useful information on SMSFs– external site.
Stock – the actual goods or materials a business currently has on hand.
Stocktaking – a regular process involving a physical count of merchandise and supplies actually held by a business, to verify stock records and accounts.
Superannuation – money set aside for retirement that must go into a complying superannuation fund. There is useful information on ASIC’s MoneySmart website about businesses paying their employees super– external site.
Tax invoice – an invoice required for the supply of goods or services over a certain price. You need a valid tax invoice when claiming GST credits. See also Invoice
Turnover – See Revenue.
Unbankable money – Relevant money that has been received by an official of a Commonwealth entity or a minister, and cannot be deposited in banks in Australia, or in the place where the money was received. For example, banks in Australia do not accept foreign currency coinage.Unbankable money, since it cannot be used as money, is treated as relevant property and can be used, managed or disposed of by the entity’s accountable authority in accordance with the PGPA Rule and the entity’s internal controls..
Underlying cash balance – A cash measure that shows whether the Government has to borrow from financial markets to cover its activities. The underlying cash balance is calculated as net cash receipts from operations (excluding Future Fund earnings), plus financing adjustments (to remove cash flows more appropriately viewed as financing in GFS), plus net cash flows from capital investment (net cash investment in non-financial assets worsens underlying cash balance as such investment is integral to the operation of Government). Related term:fiscal balance.
Underfunded superannuation scheme – A scheme where the employer does not pay contributions to a superannuation fund. Instead, the employer contributes when the employee’s benefit is paid. For taxation purposes, it is also known as an untaxed scheme. Some schemes provide a combination of funded and unfunded benefits.
Variable interest rate – when the interest rate of a loan changes with market conditions for the duration of the loan.
Variable cost – a cost that changes depending on the number of goods produced or the demand for the products or service.
Venture capital – an investment in a start-up business that has excellent growth prospects. However, it does not have access to capital markets because it is a private company.
Waiver – A special concession granted to an individual or other body that extinguishes a debt or other amount owing to the Commonwealth. Waivers may be granted by the Finance Minister (or a delegate) under section 63 of the PGPA Act.
Warranty – A promise whereby one party provides certain assurances to another party. Warranties often relate to asset and sales agreements. For example, where an entity sells an asset to a third party it may provide a warranty that the entity has a right to sell the asset, the asset is fit for use and defective parts will be replaced within a specified period. A warranty may give rise to a contingent liability.
Weighting – Percentage or proportion of the portfolio invested in each asset class.
Write downs – A decrease in the market value of an investment established by a valuation.
Guilherme Carneiro Rodrigues de Oliveira
From the very first meeting with Azem, his approach stood out as sincere, calm, and highly professional. He is not a pushy salesperson at all — instead, he is transparent, patient, and genuinely focused on doing what’s right for his clients. As first-time buyers, the process felt quite overwhelming at times, but Azem was always honest, clear, and reassuring about every step. He took the time to explain things properly, answered all our questions promptly, and made us feel supported throughout the entire journey. We felt truly looked after and never pressured. I would highly recommend Azem and his services to anyone looking for a trustworthy and professional real estate experience.
Julian Moss
Will Miles really took the time to explain each step and process during the purchase of my first home. I can’t speak highly enough how much care and attention to detail during each step of the way. Would definitely recommend using OVM Finance.
Period Extensions & Designs
Mortgage broker Will at OVM Finance Group in Melbourne made the home loan process simple and stress-free. Will provided expert, personalised advice and guided me every step of the way. Highly recommend him for anyone looking for a trusted mortgage broker in Melbourne!
Brad Fox
I’ve been working with Will from OVM Finance Group for a few years now, and he has always gone above and beyond to make sure I get the best possible outcome. He takes the time to understand my financial situation and consistently finds solutions that work, whether that’s getting loans approved or unlocking accessible cash. Highly recommend.
Leese Nelson
Absolutely recommend. Will helped me every step of the way throughout my application and kept me updated regularly. I found Will to be friendly and willing to take the time to assist me with any questions or concerns. I will be recommending to anybody I know moving forward who is buying a home.
Jayden Kalavanos
Azem was extremely informative and patient with my enquiries. I am currently a first home buyer and have little to no idea of the market and what's available. I left this meeting with a roadmap with what my options are and how to approach each target. Would 100% recommend Azem from OVM Finance Group! Absolute legend, thank you!
A mortgage broker is a licensed professional who assists in navigating the complexities of home and investment loan financing. At OVM Finance, our definition of mortgage brokers goes beyond the conventional role. We strive to provide tailored mortgage broking solutions through our team of experienced brokers, acting as intermediaries between you and a diverse network of over 30 major banks and lenders.
In today's landscape, a trusted mortgage broker can foster a lasting relationship rather than facilitating a one-time transaction. Whether rates are high or low, we identify suitable lending policies that align with your situation, saving you significant time, effort, and money.
Founded on the principles of integrity, transparency, and value, OVM Finance redefines the mortgage broking experience. Our licensed brokers prioritize your unique needs, ensuring a bespoke approach to crafting mortgage solutions that align with your individual circumstances. We believe in total transparency, taking the time to explain your mortgage options in plain English, empowering you to make informed decisions about your most significant financial investment – your home.
Our commitment to unbeatable service, as reflected in our Google reviews, goes beyond completing a deal. We aim to build a lasting relationship with you, not just a transaction. Consider us your key financial partners during your homeownership journey, providing guidance and support at every step. Through personalized consultations, we delve into your financial profile, exploring your goals and long-term aspirations.
The key to a smooth mortgage application is ensuring you can provide the required supporting documents efficiently. Fortunately, OVM leverages cutting-edge technology to automate and streamline much of this process for you. Support documents typically include, but are not limited to, suitable identification such as a driver's license and passport. For evidence of income, providing payslips (usually sufficient for PAYG employees), tax returns, and/or employment letters is common. Self-employed clients, facing higher complexities, often collaborate with their accountant to obtain the precise documentation needed to support the approval of their application.
We recognize that we handle your private data, and for that reason, our head aggregation group, to whom we pay significant professional membership fees, enforces bank-grade data security and encryption processes. All device logins by OVM Finance enforce mandatory two-factor authentication (2FA) along with anti-malware, antivirus, and anti-ransomware protection for all our clients. If you would like more information about our CRM data security, provided through our aggregation partner and licensee, please reach out to us. We are happy to provide additional details.
Generally speaking, for a proposed equity guarantor to be eligible, there is a requirement for a familial relationship.
In most circumstances, it is acceptable to have guarantor support from close family members such as your mother, father, brother, sister, and sometimes even aunts, uncles, and grandparents if the situation is deemed suitable.
A crucial consideration for a potential guarantor is their financial stability. They should be in a sound financial position, meaning they possess good equity and have comfortable means to meet their own financial commitments, even in the rare event of a default situation.
While some lenders may not mandate it, it is advisable that a guarantor seeks independent financial and legal advice to safeguard their own interests. This additional step ensures that the guarantor fully understands the implications of the arrangement and makes informed decisions to protect their financial well-being.
99% of the time our services are completely free of charge, as we are paid a fixed commission fee by the lender of your choice, this fee is fully disclosed to you. On the odd occasion for more complex scenarios we may charge a “engagement fee”, if this is the case this will be fully disclosed with you.
Purchasing your first home should be an exciting time, not a daunting one! That's why we've crafted our first-home buyer finance process to be welcoming of questions and to guide you through each step. Our goal is for you to leave your initial meeting with confidence, understanding how much you can comfortably borrow and the process required for a successful outcome. For first-home buyers, there is no fee for meeting with us – so what do you have to lose? Skip the bank jargon and product complexities. Call one of our team members today to discuss your needs now.
Yes, rising interest rates can indeed impact your capacity to service larger loans. However, there are multiple ways to improve your borrowing capacity responsibly and enhance your presentation to lenders or banks. Simple tips may include reducing credit card limits and managing existing debts.
Whether you're managing a portfolio of ten investment properties or exploring your first investment property loan, we possess the depth of knowledge and experience to navigate the complex landscape of investment property loans.
Arranging finance for an investment property often involves crucial tax considerations. Determining whether to purchase the property in your personal name, through a company or trust, or via your SMSF (Self-Managed Super Fund) can significantly impact your financial strategy. We collaborate with your accountant or financial planner to tailor a solution that aligns with your unique circumstances. Whether you require an interest-only investment loan in a company name for a self-employed applicant or have other specific needs, we can accommodate them and more. Contact us today for an obligation-free discussion.
Applying for a home loan with OVM Finance is a straightforward and transparent process. We take pride in offering honest, trustworthy, and transparent advice throughout the home loan application journey. Here's a step-by-step guide to help you understand what to expect:
1. Initial Consultation: Start by scheduling a consultation with one of our expert mortgage brokers. This meeting can be conducted in person, online, or over the phone, based on your preference and location.
2. Assessment and Pre-Approval: During the consultation, our brokers will assess your financial situation, discuss your lending needs, and help you determine a suitable borrowing capacity and lending structure. If you meet the initial criteria, we can proceed to secure a pre-approval, providing peace of mind for house hunting in a competitive market.
3. Loan Comparison: With access to a broad range of lenders and loan products, our brokers will compare various home loan options, considering not only competitive rates but also alignment with your requirements and likelihood of approval.
4. Application Submission: We value efficiency for our clients. Once you've chosen a suitable loan product, your broker will assist you in completing compliance paperwork online and submit your fully completed application to the chosen lender on your behalf.
5. Approval and Settlement: After the lender reviews your application and conducts a property valuation, formal approval is granted. We'll work with you and the lender to finalize the loan setup details, complete digital signing of offer documents, and schedule settlement in collaboration with your conveyancer or solicitor (if a purchase is involved).
6. Settlement and Beyond: On settlement day, funds are electronically disbursed, making you an official homeowner or enjoying a refinanced home loan at a better rate! Even after settlement, we have systems in place to ensure your rate remains competitive through proactive annual reviews and check-ins as our valued client.
At OVM Finance, we aim to make the home loan application as painless as possible. When you partner with us, rest assured you're receiving qualified advice from some of the most experienced mortgage brokers in Australia.
At OVM Finance, we recognize the uniqueness of each individual's financial situation and homeownership goals. That's why we provide a diverse range of home loan options tailored to meet specific needs. Our array of home loan products includes:
1. Variable Rate Home Loans: These loans offer flexibility with interest rates that adjust based on market conditions, providing potential cost savings over the long term.
2. Fixed Rate Home Loans: If you seek stability and prefer a consistent interest rate for a set period, our fixed-rate loans offer an ideal solution.
3. First Home Buyer Loans: Specifically designed for first-time homebuyers, these loans often feature favorable terms and government incentives to assist you in stepping onto the property ladder.
4. Investment Home Loans: For those interested in property investment, our investment home loans provide tailored structures to help grow your property portfolio, considering your cash flow needs.
5. Refinancing Solutions: We offer refinancing options to help secure a better interest rate, access equity, or consolidate debt.
Our experienced mortgage brokers are here to guide you through these options and assist in finding the best home loan solution for your unique circumstances. If you're seeking expert guidance on your home loan journey, OVM Finance is the right place. Our team of experienced mortgage brokers can help decode the various mortgage lending options and present a tailored solution to you in straightforward, understandable terms.
Offset accounts function similarly to ordinary savings accounts, complete with a BSB and account number. However, their distinctive feature is that they are electronically linked to your mortgage account, aiming to reduce the interest charged on your loan balance. Here's an example to illustrate:
Let's say you have a $750,000 home loan outstanding and an offset account with a $50,000 balance. The offset account, as implied by its name, reduces the interest charged against the balance owing on your home loan. In this scenario, the interest is calculated based on a reduced balance of $700,000 ($750,000 - $50,000).
It's important to note that not all offset accounts are created equal. Some are partial offset accounts, which may significantly diminish the benefit of surplus funds sitting idle. Additionally, fixed loan splits generally cannot have a linked offset account, except for a few lenders who may allow this during a fixed term.
Understanding the specifics of your offset account, including whether it's full or partial, and the rules around linking it to a fixed loan split, can impact the overall effectiveness of this financial tool in reducing interest costs. It's recommended to carefully review the terms and conditions of your offset account and seek advice from financial professionals if needed.
Without a shadow of a doubt, having a mortgage broker in your corner is 100% worthwhile. What distinguishes our team at OVM Finance is our unwavering commitment to premium service, industry expertise, great deals, and ongoing support. With years of collective experience, our team not only secures mortgage approvals but also champions your long-term financial goals.
OVM Finance stands out as one of Melbourne’s premier mortgage brokers by treating you as a client, not just a transaction. Our approach to building relationships goes above and beyond the offerings of traditional banks.
Understanding that your financial needs evolve and life circumstances change, the OVM Finance team remains dedicated to providing continuous support. Whether it’s refinancing to take advantage of better rates, accessing equity for major life events, or navigating the complexities of investment property financing, we are here for you.
We are paid through commissions paid by the lender your loan settles with. This will be a fixed amount dependant on your loan amount. This fee is fully disclosed to you. We are also paid “Trail commissions” - which are ongoing commissions paid over the life of the loan. These commissions are typically based on the outstanding loan balance and are paid at regular intervals, such as monthly or annually. Trail commissions are intended to compensate brokers for providing ongoing services, such as loan maintenance and customer support.
We are also subject to “clawbacks” – this occurs when a client closes off their loan in the first 2 years after the loan is created, whether that is through refinancing the loan or selling the property. A clawback is when we have to pay back the lender all commissions made since the loan was created.
Certainly, understanding the term "guarantor" is crucial, and the suitability of the structure must be clearly defined before proceeding further.
In the context of parental guarantees, it's important to note that they typically take the form of equity guarantees rather than servicing guarantees.
1. Equity Guarantees: Parents commonly provide support through equity guarantees by 'pledging' equity in a property, usually their owner-occupied home or an investment property they own. This means that the parents are offering the equity in their property as security for their children's loan. In the event of a default, the lender may have recourse to the guarantor's property to recover the outstanding amount.
2. Servicing Guarantees: It's worth mentioning that servicing guarantees, where parents promise to have enough income to boost the borrowing capacity of their children, are no longer widely available. This type of guarantee essentially involved a commitment from parents to ensure that their income could support the increased borrowing capacity of their children. However, this practice was largely phased out many years ago.
Before proceeding with a guarantor arrangement, it's crucial to have a clear understanding of the type of guarantee being offered, the associated risks, and the legal implications. Consulting with a qualified financial advisor or mortgage broker can provide valuable insights and help navigate the complexities of guarantor structures. It's important to stay informed about any changes in regulations or practices related to guarantor arrangements.
Refinancing your home loan involves comparing your existing home or investment loan with what is available in the wider market. If it makes financial sense, it is swapped out with a new mortgage agreement, typically with a new lender. This process allows you to take advantage of better interest rates, more favorable loan terms, or access equity in your property for various purposes. At OVM Finance, we understand that your financial situation and needs can change over time, and refinancing offers an opportunity to optimize your home loan. Here are some ways refinancing may benefit you:
1. Lower Interest Rates: If market conditions have shifted or your lending capacity and credit score are favorable, refinancing can lead to lower interest rates and more affordable monthly repayments. The monthly savings can be redirected towards your loan to expedite debt reduction plans or used for other financial priorities.
2. Accessing Equity: If your property has increased in value or you've made significant repayments, you may have built up equity. Refinancing allows you to access this equity, which can be used for home improvements, investments, debt consolidation, or other financial needs.
3. Consolidating Debts: Refinancing can be an effective way to consolidate higher-interest debts, such as credit cards, car loans, or personal loans, into your home loan. This may result in a single, more manageable repayment at a potentially lower interest rate, but caution is needed to avoid extending shorter-term debts over a longer home or investment loan term.
4. Changing Loan Features: Refinancing enables you to switch to a loan product with features that better suit your current circumstances. This could involve moving from a variable rate to a fixed rate, setting up an offset home loan, or making other adjustments that align with your financial goals.
5. Debt Repayment Strategies: Our mortgage brokers can collaborate with you to develop a personalized debt repayment strategy, which may involve refinancing strategically to optimize your financial outcomes.
Before proceeding with refinancing, it’s essential to consider potential costs, such as exit fees from your current lender, application fees, legal fees, and any short-term offers from a shortlisted lender. Our experienced team at OVM Finance conducts a comprehensive assessment of your financial situation using industry-leading tools, guiding you through the process and helping you determine if refinancing is the right choice. If you're considering refinancing your home, consult with one of our experts to explore how it could benefit you!
OVM FINANCE GROUP PTY LTD ABN: 99 662 462 393. Credit Representative #542457 is authorised under Australian Credit License #391209.
OZ OVM Finance Group PTY LTD ABN: 97 685 262 275. Credit Representative #568331 is authorised under Australian Credit License #384704.
JV OVM Finance Group PTY LTD ABN: 13 685 263 897. Credit Representative #542628 is authorised under Australian Credit License #384704.
Disclaimer: This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.
Site by Broker Studio
