AIA Fixed Rate Home Loan
The smarter home loan solution

 

AIA Home Loan Glossary

Acceptance Letter
A letter from the applicant indicating his willingness to accept the loan after the loan is approved by the banking institution
 
Bankrupt
A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee
 
Bankruptcy
A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee

Base Lending Rate (BLR)
A minimum interest rate calculated by financial institutions based on a formula which takes into account the institutions' cost of funds and other administrative costs
 
Booking Receipt
Official recepit from the developer/vendor indication the booking amount received
 
CCRIS
Central Credit Reference Information System. A computerized database system developed and maintained by the Credit Bureau to collect, process, store and generate credit information
 
CTOS
CTOS collates factual information into an electronic media for easy, instantaneous, and accurate retrieval. When you apply for loans, credit cards, hire purchase or leasing facilities, the credit grantor will make an enquiry in the CTOS system for information leads
 
Daily Rest
Allow clients to make prepayment and interest is calculated based on balance at the end of each day (calculation is daily basic)
 
Default
Failure to pay the monthly instalment/interest payments to financial institutions when due
 
Disbursement Fees
Various type of fees such as registration of charge fee, land search fee, bankruptcy search fee incurred by financial institutions and solicitors attending to the loan documentation in relation to the loan which are payable by the borrower
 
Loan Documentation
A set of agreements, forms, and other documents to be signed in connection with a loan. The documentation will form a full set of records for the loan
 
Downpayment
An initial payment made by the buyer to the seller of the house
 
Financial Institutions
All commercial banks and finance companies licensed under BAFIA 1989 and Islamic banks licensed under the Islamic Banking Act 1983
 
Fixed Rate Loan
A term used to describe interest that is charged as a fixed percentage of the loan amount throughout the tenure of the loan. The flat repayment amount is usually determined before the commencement of the repayment programme
 
Floating Rate Loan
A term used to describe a loan, where the interest charged fluctuates due to the rise and fall of a certain indicator such as the Base Rate (BR) or Base Lending Rate (BLR)
 
Foreclosure
Legal action available to the financial institution for recovering outstanding sums owed by a borrower who has defaulted on his/her loan. The property pledged by the borrower to secure the loan is sold and the proceeds of the sale used to settle the outstanding loan amount
 
Freehold
Owner have unlimited right to subdivide and aggregate subject to town planning controls
 
Gross Monthly Household Income
The sum of gross monthly pay of all working family members before deducting income tax, Sosco, EPF, loan instalment or other deductions plus any additional income from overtime, commissions and other sources
 
Guarantor
Person or entity who is legally bound to pay a debt incurred by the borrower if that borrower fails to pay
 
Homeowners Insurance
An insurance policy that combines liability coverage for a homeowner together with protection from damages caused by wind, fire, vandalism and other risks
 
Interest Rate
The amount charged by the lender to the borrower for borrowing a sum of money expressed as percentage of sum borrowed
 
Land Title
Title of the land describes details of the land location, size, title status and extra
 
Late Charge
A penalty charged by financial institution for not paying instalment due on time
 
Leasehold
Lease transfers require State or its equivalent's approval. Lease duration usually 30, 60, 99 or 999 years. Limited by purpose of lease and land legislation, and also environmental and town planning controls
 
Legal Fees
The fees and charges or price to be paid for legal assistance provided by a lawyer. This includes fees charged for time spent on a legal matter
 
Lender
The bank, mortgage company, or mortgage broker offering the loan
 
Letter Of Offer
Letter issued by bank for borrower, will clearly stated the interest rate, loan tenure, term and condition about the loan. Borrower needs to initial every page to confirm he/she understands conditions inside before signing this Letter of Offer
 
Loan Agreement
The contract between the lender and the borrower that sets out the loan terms and conditions. These will include amount, repayment obligations, interest rate, and the security required. It is important to read the Loan Agreement carefully before it is entered into
 
Loan Tenure
Number of years taken to fully repay the loan principal and interest as agreed under a specific repayment programme
 
Margin of Financing
The loan amount granted by the financial institution, expressed as a percentage of the value of property pledged to secure the loan
 
Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time
 
Master Title
Title for a land
 
Mortgage Reducing Term Assurance (MRTA)
A term insurance which reduces over the tenure of the loan. This form of insurance is used to provide cover for the outstanding loan amount, in the event of death or total permanent disability of the insured. MRTA is normally calculated to meet the outstanding loan amount
 
Moving Cost
Processing fees for the loan application, ie: stamping fees, legal fees, disbursement fees and valuation fees
 
Monthly Rest
Interest is calculated based on balance at the end of each month and does not take into account the daily balance of the account
 
Outstanding Loan
Remaining loan not yet paid, including interest and other charges
 
Overdraft
A type of credit facility granted to the eligible current account holder. The borrower is allowed to issue cheques exceeding the credit balance in the current account but subject to a certain pre-approved limit granted by the financial institution
 
Power of Attorney
A formal legal document giving authority to one person to act on behalf of another person
 
Prepayment
Payment of all or part of a loan before maturity
 
Prepayment Penalty
A fee charged by financial institutions for early payment of loan in full. The fee charged is usually based on a percentage of the loan amount or "X" months of interest
 
Principal
The amount borrowed from financial institutions, excluding interest and other charges
 
Property
Refers to landed properties (like house, apartment, condominium) and land (like bungalow lots)
 
Refinancing
The process of paying off a portion or the entire amount of the existing loan with the intention of obtaining another loan from the same or another financial institution
 
Sale & Purchase Agreement (SPA)
A written contract signed between the buyer and seller stating amongst others, the terms and conditions under which a property will be sold
 
Strata Title
Same meaning with individual title, but use for non-landed like condominium/apartment
 
Subsale
Purchase from someone which is not a developer
 
Term Loan
A loan which is repaid through regular periodic payments, usually over a period of time, for example 20 years
 
Title
A legal document establishing the right of ownership on a property
 
Valuation Fees
Fees payable for market value indication
 
Valuation Report
A written analysis of the estimated value of real estate prepared by a licensed Valuer