Glossary of terms.
The mortgage industry is a large and complex world that seems to speak its own language. Listed below are some of the many acronyms you may have come across.
We will update this list over time. If there is an acronym you don’t understand, that isn’t listed here, get in touch and we’ll add it to the list!
Cross Collateralisation
Cross collateralisation is a complex term for a borrower offering two properties as security for a new loan.
It keeps the loan to value ratio (LVR) as low as possible, which increases the likelihood of securing the loan, and helps to avoid other costs like lenders mortgage insurance (LMI).
LVR
One of the many acronyms you may have heard being used is ‘LVR’, which stands for Loan to Value Ratio.
LMI
Lenders Mortgage Insurance (LMI) is an insurance policy which insures the lenders/banks from potential loss.
Low Doc Loan
Many lenders offer loans for self-employed borrowers using business bank statements, income declarations from your accountant, and other financial records. This is what we call a Low Doc Loan.
Redraw
Redraw lets you access extra repayments you have made on your loan. In an emergency, access to this extra cash can be a live-saver.