One of the first things you will notice when you start looking into building your own home is that there are a lot of terms you suddenly need to know, it can feel like a whole other language sometimes. The new home building journey can be fraught with jargon, which can obviously be overwhelming and complicated.
You want and need to feel confident about all the big decisions you are going to have to make, which isn’t really possible if you don’t understand the lingo. To help you navigate through this confusing time, we have compiled a list of the most important terms and their meanings.
- Stamp duty – Stamp duty is tax on property purchases. The amount of stamp duty a buyer pays is based on the property purchase price, location and loan purpose.
- Lenders mortgage insurance – Lenders mortgage insurance (LMI) is an insurance policy that some home loan borrowers need to pay. It’s basically to protect the lender from financial loss if the borrower can’t afford to meet their home loan repayments.
- First Home Owners Grant (FHOG) – The FHOG is a national scheme that provides a one-off payment of $10,000 to first home owners that satisfy certain eligibility requirements.
- State government grant – The WA grant is for new homebuyers who meet the necessary income criteria. Those who do qualify for the federal package could receive $45,000 in government assistance.
- Federal government grant – The federal government grant is a tax free grant program initiated by the government to stimulate the residential sector in response to Covid-19. Eligible applicants will receive a $25,000 grant to help build a new home.
- Lender – A mortgage lender is exactly as the name says, a financial institute or bank that offers home loans.
- Broker – A mortgage broker is a go-between who deals with banks or other lenders to arrange a home loan for you.
- Certificate of title – A certificate of title is a person’s official land ownership record, and notes interests and rights affecting their land.
- Credit report – A credit report is a statement that has information about your credit activity, as well as current credit situation, such as your loan paying history and the status of your current credit accounts.
- Equity – Equity is the sum of a person’s assets, minus any debts or liabilities attached to them.
- Settlement – Settlement is the process of transferring the ownership of a property to another person.
- Site works – Site works is basically the work required on your block of land to prepare it to be built on, as well as the ongoing management of the building site.