Bathurst Blog

A recent survey published by ME Bank of 1000 Australians selected at random from prospective buyers, home owners and investors identified lack of procedural knowledge at nearly every stage of the buying process. Newcomers, especially, looking to buy their first home, have low levels of financial knowledge despite 70 per cent saying they feel confident making decisions about their finances. The majority of first-home buyers didn’t know what lenders’ mortgage insurance covers, nor what conveyancing means or that there is no cooling off period when buying property at auction.

Lenders Mortgage Insurance, paid for by the borrower, protects lenders if the borrower defaults, and is frequently a lender’s requirement when the loan to value ratio is high.

Conveyancing is the legal process involved in transferring real estate from one person to another, providing advice on contracts, investigate property titles and assist buyers in meeting legal obligations. A solicitor or a conveyancer is licenced to carry out this work.

A cooling-off period is a set number of days after purchase in which the buyer can cancel the transaction except for properties bought at auction. It is usually 5 days, but can be varied by agreement.

Home equity is the difference between the market value of a property and the amount still owed on the home loan. Put simply, it’s what you own in the house after the mortgage monies are taken into account.