Have you been confused by killer home loan jargon?
The world of property finance has more that it’s fair share of home loan jargon. Perhaps this is to make us in the industry feel clever, I’m not sure, but it’s certainly very common.
Consider this statement;
“The current indicator rate for your loan is now 5.8%. It is affected by your high LVR, plus LMI is applicable because you’re borrowing more than 80%. But, if we cross collaterize an additional security property with sufficient available equity we may eliminate LMI. Plus we can apply a lower rate to your total borrowings as we price based on your global borrowings with the bank.”
What does that mean? Perhaps this is clearer,
” Your interest rate will be 5.8%. You pay a one off mortgage insurance premium because you are borrowing more than 80% of the value of the property. You can get a lower interest rate if we add your current loan to the new loan and use both properties to secure the loans”.
Hopefully the second paragraph is clearer than the first. If not, I’m also a slave to killer home loan jargon.
We could go through each of the above jargon terms and give a plain English explanation. But is that really necessary? If we explain the information clearly from the start, interpretation of jargon isn’t necessary.
This approach is not about dumbing down the information borrowers need to know. It’s about talking in language that makes sense and can be understood. A borrower can understand the phrases and jargon of their profession or industry but lost when hit with financial jargon.
Buying a property is a huge cost and a major part of our job is clearly explaining what borrowers need to know so they can make informed decisions.
At Halogen Home Loans our aim is to “Talk simply about the things that matter”.
Paul Gilhooly
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