Interested to understand some common property and financial related terms? We continue the series where we provide a Databank Glossary Guide in alphabetical order for your interest each month.
LMI (lenders mortgage insurance) – usually required by lenders when you’re borrowing more than 80 per cent of the property’s value. It provides insurance to the lender in case the borrower defaults on the loan.
LOC (line of credit) – a facility available from financial institutions that gives you a credit limit that you can draw down at any time. It’s similar to a credit card, except you don’t have to make set repayments off the principal.
Low-doc loans – relatively new, these are loans that don’t require as much documentation to set up the loan. They are popular with self-employed people and those who have not yet established a credit rating.
Lower quartile – the price point below which 25 per cent of sales were recorded. If there were 100 sales in a suburb, the 25th lowest price would be the lower quartile price.
LVR (loan-to-value ratio) – to calculate it, divide the loan amount by the value of the property then multiply it by 100 to get a percentage. Banks and financial institutions use this as a measure of whether you can afford this loan.
Clark Real Estate can answer any further questions you may have in relation to common industry terms and what they mean for you. Call them today on 3256 1600.