To find out how Mortgage Room
can help you arrange a home loan
for you, Contact us today.

What is a home loan?
Broadly, a home loan is obtained from a lender to purchase a home. The loan is secured against the home you are buying and the lender's interests are registered on the certificate of title. This protects the lenders and in simple terms means that you cannot sell your house until the loan to the lender is repaid.

What is a mortgage?
The home loan is secured by a mortgage. A mortgage is a form of security taken over real estate and land. It gives the lender the right to repossess the real estate or land if the borrower does not repay the loan.

How much should I borrow?
Generally, you should only borrow what you can afford. Work out if you can afford the repayments. At the Mortgage Room we will help you prepare a budget before you commit to any borrowings. This will tell you how much you can afford on a personal level and ensure you’re not over committing yourself.

What home loan is suitable for me?
This depends on your individual circumstances. Paul can discuss the options available to you from a range of home loans.

How often should I review my home loan?
It is sensible to examine your personal finances on a regular basis. You should look at the way your mortgage or home loan is managed and your personal budget at least once every year. This may mean that you do nothing or you may realise that you need to take actions to improve your situation.

Who is the mortgagee?
The mortgagee is the bank or lender. They lend principal or money, which is secured against the home of the mortgagee.

Who is the mortgagor?
The mortgagor is the borrower. They borrow the money by giving the lender a mortgage secured against their home.

What is a repayment mortgage?
The borrower pays back the home loan at regular intervals either each month or each fortnight. The amount paid back includes some principle and interest.

What is the meaning of principal?
The sum you borrow. For example you want to buy a $200,000 home. You have $25,000 and you need $175000 to complete the purchase. The $175,000 will be the principal.

What is interest?
When you borrow money you pay interest on the amount you borrow (the debt). There are different ways interest can be paid and the method may depend on the type of home loan you have. Home loans can take their name from the way in which the interest is to be repaid. Check out the Mortgage Types page for more details about the common types of mortgage loans.

How does Mortgage Room get paid?
Generally the lender pays the Mortgage Room a commission for arranging the loan with the borrower. In this situation you do not have to pay for our service. In special situations a fee may be applicable and we will advise you before we do any work for you. At all times we will explain in full how we are being paid and the nature of the payment. For our financial mentoring and budgeting services, we have payment options to help with your personal situation. These are kept at a minimum to assist you with on going support. Please contact us directly for all enquiries.

What does the term drawdown mean?
The term means the act of transferring money from the lender to the borrower after the loan is agreed and settled.

What does gross income mean?
It is income or revenue from a person or company before tax is deducted.

What is a certificate of title?
Ownership of land is detailed in registration. Registration is compulsory because it effects legal transfer of title in land. The title shows you who owns land. New purchasers register a transfer in legal title when they complete the sale. Generally lawyers do this for you so ask them for more details.

What is the term of a loan?
It is the length of a home loan or a specific portion of the loan.

What is the settlement?
Settlement is the finalisation of payment by the new owner to the seller. It is when you get possession and the keys to your new home.

What is a reverse mortgage?
This type of home loan is also called a "home equity". Older people who own their own home but have small or limited income or pensions can borrow a sum of money for any purpose. The money can be a lump sum and the loan is registered as a mortgage against the borrower's home. The borrowers continue to live in their home. The borrowers do not make any repayments of either the principal or interest. Principal, interest plus any fees are added to the loan each year. The amount builds up over the years to a total amount owed which is repaid when:

• The loan ends
• The house is sold
• The borrower moves to another house or into residential care
• The borrower dies (if there is more than one borrower, then when the last one dies)

When the loan ends then either the borrower or his/her estate must pay back what is owed to the lender. This comes from the proceeds of the sale of the home. The amount a borrower can get depends on his /her age and the value of the house.

What type of mortgage is best for me?
When arranging any kind of mortgage it is vital that you get independent, qualified and professional advice. Mortgage Room's team of experienced mortgage brokers will guide you in the direction we believe best suits your circumstances. Contact us and we'll help you find the type of mortgage that best suits you.