20 words you need to know before you get a home loan in Perth

Whether you're climbing the property ladder or stepping onto the first rung, navigating the world of real estate and financing is like learning a new language — without a guidebook. We want to help you to understand the key industry terms, and some Finance My Home lingo, so you can make confident decisions.

Why understanding the language of financing is important

For first-time home buyers, grasping the key industry terms associated with securing a mortgage is key. It helps you navigate through the tricky process  of homeownership. Plus, knowing the terms ensures you can make informed decisions about mortgage options, interest rates, and loan structures. With a clear understanding of terms like LVR and stamp duty, you can budget effectively, calculate upfront costs, and assess the affordability of a  property. While learning about things such as FHOG allows you to learn about available government assistance to make homeownership more accessible and affordable. This financial literacy can help in negotiations with lenders and allows you to navigate the legal processes of property transactions.

1. Deposit

Definition: Your initial investment, typically around 10% of the property's price.
Why it matters:
The deposit serves as your ticket to the homeownership adventure, showcasing your commitment to the property purchase.

2. Mortgage

Definition: Your trusty sidekick, a  loan that facilitates the acquisition of your dream property.
Why it matters:
Understanding the role of your mortgage is fundamental to grasping the financial aspect of homeownership.

3. Interest Rate

Definition: Your compass guiding monthly mortgage payments. It can be fixed or variable, depending on your preference.
Why it matters:
The interest rate determines the cost of borrowing, influencing your overall financial commitment.

4. LVR (Loan to Value Ratio)

Definition: A ratio indicating the proportion of the loan amount to the property's value.
Why it matters:
Lenders use LVR to assess the alignment of your deposit with the property's value, impacting loan eligibility and terms.

5. FHOG (First Home Owner Grant)

Definition: A government grant designed to assist first home buyers, making home ownership more affordable.
Why it matters:
FHOG provides financial support, potentially easing the financial burden for first-time buyers.

6. Title Search

Definition: A legal process confirming property ownership through a document known as the Title.
Why it matters:
Before purchase, a title search ensures that property ownership details are in order, offering assurance to buyers. 

7. Offer and Acceptance

Definition: A formal document outlining terms and conditions for the purchase and sale of a property.
Why it matters:
The Offer and Acceptance document sets the groundwork for a transparent and legally binding property transaction.

8. Conditional Offer

Definition: An offer subject to  specific conditions, such as property inspection or financing approval.
Why it matters:
Conditional offers  allow flexibility and protection for buyers, ensuring certain criteria are  met before finalising the purchase.

9. LMI (Lender's Mortgage Insurance)

Definition: Insurance protecting the lender if the deposit is less than 20%.
Why it matters:
LMI may be required if the buyer has a lower deposit, impacting overall loan costs and lender risk.

10. Execution of Transfer

Definition: The legal process transferring property title from the seller to the buyer.
Why it matters:
The execution of transfer ensures a smooth and legally sound transition of property ownership.

11. Conveyancer

Definition: A licensed professional  handling the legal aspects of property transactions, including ownership transfer.
Why it matters:
Engaging a conveyancer ensures a legally sound and transparent property transfer process.

12. Building and Pest Inspection

Definition: An assessment of a property's structural integrity and potential pest issues.
Why it matters:
These inspections are crucial for identifying hidden problems, aiding buyers in making informed decisions.

13. Fixed-Rate Mortgage

Definition: A mortgage with a stable interest rate throughout the loan term.
Why it matters:
Fixed-rate mortgages provide predictability in monthly payments, aiding budgeting for first-time buyers.

14. Variable Rate Mortgage

Definition: A mortgage with an interest rate that can fluctuate based on market conditions.
Why it matters:
Variable rate mortgages offer flexibility but require understanding market trends for anticipating changes in interest rates.

15. Pre-Approval

Definition: A preliminary assessment by a lender indicating the amount a borrower can potentially borrow for a mortgage.
Why it matters:
Pre-approval  strengthens a buyer's position in negotiations and streamlines the house-hunting process by providing a clear budget.

16. Offset Account

Definition: A transaction account  linked to your mortgage, with the balance offsetting the interest payable on your home loan.
Why it matters:
Utilising an offset account can help reduce interest costs over time, offering potential long-term financial benefits.

17. Stamp Duty

Definition: A state-based tax on property transactions, calculated as a percentage of the property's purchase price.
Why it matters:
Understanding stamp duty is essential for budgeting, as it significantly influences the overall cost of buying a property.

Finance My Home Lingo

If you work with the Finance My Home team, you’ll soon come to understand that we have our own special lingo. We use these phrases to help our clients understand the process and the extra  service we offer.

18. The Lamb Special

The special tailored finance advice and treatment that we give our clients, inspired by Finance My Home Director Colin Lamb.

19. The ‘have to’ repayment

The minimum monthly repayment that you have to make in order to service your loan each month.

20. Go out and fall in love

When you have all the confidence you need to go to home opens, fall in love with a property and put in an offer — without hesitation.

Ready to take the next step?

Where you want to talk about home loans or flex your new financing lino, the friendly experts at Finance My Home are here to help. Contact us today for a personalised chat and take the first step towards a home, business or investment loan.


We give you confidence to buy, sell, and get to the front of the property queue.

Book a meeting to discuss your loan needs. And we'll be right next to you — every step of the way,

p. (08) 6185 1737
Suite 10/3 Barker Avenue Como WA