To help you stay savvy in the world of bonds and home financing, we begin at the beginning by taking a look at the letter A in our Mortgage Glossary.
A
Amortization
The process by which your loan amount decreases, over the life of your loan. With each payment made a portion of your payment is applied towards reducing your principal (amount) and another portion of your payment is applied towards paying the interest on the loan. An Amortization table or schedule, shows this ratio of principal and interest and demonstrates how your loan’s principal amount decreases over time.
Access Bond
A bond that doubles as a money management facility. It allows you to deposit and transfer surplus funds into your home loan to be accessed as needed.
Administration Fee
Monthly fee the bank charges you to manage your home loan account
Assessor/Assessment
The bank sends out an assessor to value the property you wish to purchase, the aim being to determine if the house is worth the value it is being sold to you at. /The process of the Assessor assessing or valuing a property on the banks behalf
Assessment Fee
The fee for the administration of performing an assessment on a house
Affordability
Refers to an individual’s financial capacity to purchase and pay monthly expenses for a home
Agreement of Sale
The contract documenting the transfer of property between the seller and buyer. It stipulates the conditions of the sale, price and property details.
