Glossary L

Lender
As the name suggests, a lender is a bank, building society, credit union or a specialised home lender that lends money.

Line of credit
Line of Credit also known as an equity home loan, is when the lender assigns you a credit limit secured against your property, and when you need cash you draw against that limit, usually by writing a cheque or using a special debit card. As you pay back the loan (the terms of repayment vary), the money becomes available to you to use again.

Loan To Value Ratio
This is a tool used to measure the strength of a loan. The formula used to calculate the loan to value ratio (LVR) is as follows,
Mortgage
Property Price x 100 = LVR

For example, if a house is worth $320,000 and the mortgage for the property is $220,000, then the LVR equals 68.75%

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