Glossary C

Capital gain
Is a term that refers to the financial gain obtained when you sell something for more than you paid for it. Usually, the profit you receive from selling the asset incurs capital gains tax, except on the sale of a home that remains exempt from this tax.

Capital gain tax
A federal tax on the monetary gain made on the sale of an asset (excluding your own residence) bought and sold after September 1985.

Capital growth
The difference between the price you pay for an asset and the price you receive when you sell it or the valuation placed on that asset.

Capped loan
A loan where the interest rate is not allowed to exceed a set level for a period of time, but unlike fixed rate loans, is allowed to drop.

Is Latin for beware and is a warning on a property’s title that stipulates that a third party has some rights or interest in the property.

Caveat emptor
‘Let the buyer beware’ – the principle that puts the onus on buyers to be satisfied with any item before buying.

Certificate of Eligibility
A document that is issued by the federal government confirming a veteran’s eligibility for a Department of Veteran mortgage.

Certificate of Title
A statement that identifies who owns the land and includes details of mortgages, easements, dimensions of the land and whether there are any obstructions on it.

Refers to personal property. There are two types of chattels; real chattels which are buildings and fixtures, personal chattels which are clothing and furniture.

Combination or Split loan
This is exactly as it sounds. It is a combination of the several of loans on offer and may have a portion variable, fixed or a line of credit.

Comparison rate
As of July 2003 all lenders and brokers must provide a ‘comparison rate’, by law. A Comparison Rate reveals the cost of a loan, allowing you to compare ‘apples with apples’ when choosing a loan. The Comparison Rate takes into consideration the costs associated with setting up a loan including the interest rate, the loan approval fee and any other up-front or ongoing fees. It excludes government fees and charges, because they are standard across all loans.

Construction loan
If you are building a property, a construction loan allows you to draw money as required to assist with building costs.

Consumer Credit Code
is an Act of Parliament that governs the involvement between borrowers and lenders. Credit providers such as banks, building societies etc, must tell you what your rights and obligations are in any credit arrangement. They are required by law to truthfully disclose all relevant information about your arrangement in a written contract, including interest rates, fees, commissions and other information which in the past was often hidden.

Contract of Sale
This is a written statement that is legally binding and outlines the terms and conditions of the sale of property between purchaser and seller.

is the legal process for transferring a real estate ownership from one owner to another. This can be a costly process and is applicable to all States with the exception of South Australia where Torrens Title is used instead.

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