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To add on the loan account. Some lenders allow capitalization of interest until the facility limit is reached.
The point where the lender has fully assessed the application and has approved it subject to several conditions. These conditions are usually, a valuation and Lenders Mortgage Insurance.
| Lenders Mortgage Insurance |
Also known as LMI or Mortgage Insurance. It is a policy taken out by the Lender to cover them in case you default on the mortgage. The cost of the policy is borne by the borrower.
Loan to Value ratio. The ration of the loan amount to the value of the house expressed as a percentage.
This type of lending is usually for those who cannot get finance from a bank. Sometimes this is as a result of credit impairment or due to the nature of the security being offered.
The point at which a lender has received your application and is willing to provide finance based on a limited assessment of the application.
The ability for the borrower to make the loan repayments and have money left over for living expenses and any other liabilities such as a car loan repayment. For the purpose of calculating serviceability lenders usually 'load' the interest rate by 1-1.5%.
The point where the lender has fully approved the loan and no further conditions need to be met. The loan offer and loan documents are prepared and sent out the borrower at this stage.
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