Finance and Mortgage Broking

Glossary
Term Definition
360 degree feedback Collecting feedback about a person or a topic from a range of persons within a work
environment including peers, superiors and subordinates.

Active listening Active listening is a communication technique used in counselling, training and
conflict resolution, which requires the listener to feed back what they hear to the
speaker, by way of re-stating or paraphrasing what they have heard in their own
words, to confirm what they have heard and to confirm the understanding of
both parties.

Balance of payments A summary statement of all domestic economic transactions a country undertakes
with the rest of the world during a given year.

Blog A contraction of the words web log, a personal website or web page for opinions
and links to other sites, updated on a regular basis.

Borrowing Obtaining the temporary use of money while incurring the obligation to pay it back,
usually with interest.

Capital The value of assets such as property, car, business or cash.

Capital account The part of the balance of payments relating to investment flows, recording the
movements of loans, investments and other monetary transactions that are not
associated with the production of goods and services.

Capital gain or loss A capital gain or capital loss is the difference between what it cost to obtain an asset
and what was received when the asset was disposed of.

Certificate of title A record of ownership for real estate. A current edition of a Certificate of Title will
normally detail title information including the name/s of the owner/s, the lot/plan
numbers and other registered interests on the title such as mortgages, easements
and covenants.

Change management A structured approach for ensuring that changes are understood, planned,
developed and implemented promptly to cause as little disruption as possible to
the functioning of the business.

Civil law A legal system originating in Europe, intellectualised within the framework of late
Roman law, and whose most prevalent feature is that its core principles are codified
into a referable system that serves as the primary source of law. Civil law proceeds
from abstractions, formulates general principles, and distinguishes substantive rules
from procedural rules.

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 Term Definition
Clipboard (Windows) In Windows and other operating systems, the Clipboard is a short-term storage area
for all kinds of information that you have copied from one place and you plan to use
in another place.

Code of practice Written guidelines issued by an official body or a professional association to its
members to help them comply with ethical standards.

Cold call An unsolicited sales call on a prospective customer, by telephone or in person.

Commercial bills Negotiable, short-term, unsecured promissory notes issued in bearer form
(a security payable to the person possessing it), usually on a discount basis to raise
working capital for any term up to 180 days.

Common law Law developed by judges through a series of decisions of courts or similar tribunals
— judges’ decisions in pending cases are informed or bound by the decisions of
previously settled cases. Common law forms the basis of Australian jurisprudence.

Communication How people share information, give directions, express feelings,

pursue relationships, encourage and inspire others.

Computer hardware The physical elements that comprise a computer system.

Computer network A way of connecting computers via a telecommunications line to enable computers
to exchange data.

Computer software The non-tangible component of computing, the set of programs or instructions that
control the computer.

Consumer Price Index The main measure of inflation and changes in the cost of living in Australia,
(CPI) calculated from the cost of a ‘basket of goods and services’ designed to represent
the expenditure pattern of average employee households in Australian capital cities.

Continual An iterative and incremental change process of constant improvements over time.
(or continuous)
improvement

Credit A person or entity providing another person or entity with financial resources that
do not need immediate repayment. Instead, an arrangement is made to return the
financial resource later, either in one transaction or over a number of transactions.
The provision of the financial resource creates a ‘debt’.

Current account A record of the actual monetary transactions between Australia and the rest of the
world, and the net effect of income received and payments made on Australia’s
foreign investments and debt.

Dashboard A panel of KPI measures usually displayed on a screen with real-time updates.

Depreciation How an asset declines in value over time.

Desktop A view on a computer screen that contains icons (small symbols or pictures)
representing files, programs, and other features of the computer.

Direct marketing Contacting and influencing carefully chosen prospects with means such as
telemarketing and direct mail advertising.

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 Term Definition
Disability income Provides the policy owner with a replacement income after a specified waiting
(income protection) period should the insured be unable to earn an income due to injury or illness.
insurance

Disk drive A computer storage device where information is stored on the surface of a
rotating disk.

Economic cycle The natural fluctuation of the economy between periods of expansion (growth)
and contraction (recession).

EDR External Dispute Resolution.

Electronic commerce Online facilities enabling customers to: pay for products, or complete transactions,
(or e-commerce) securely exchange information or make product or options selections change or
update details.

Emotional intelligence The ability to recognise your own emotions, understand why you are feeling that
way and have empathy for people around you.

Endowment insurance Similar to whole of life insurance, this insurance combines an insurance element
with a savings element, maturing at a date set by the policy owner at the
commencement of the policy.

Exchange rate The price of one currency in terms of another.

Feedback Information or criticism given with the intention of improvement.

File A collection of data of a particular type, for example, documents, spreadsheets,

databases, photographs, music files or video files.

Firewall A security device that shields internal network services.

Fiscal policy Government action in relation to its own revenue and spending such as changing
the direction and level of government revenue-raising and expenditure.

Folder Containers or groupings of computer files.

Gearing The act of borrowing money at fixed interest that is then used to produce more
money than the interest paid.

General insurance The purchase of a promise to pay for or compensate for loss or damage to persons
or property for which one is liable.

Gross Domestic The total market value of all goods and services produced in a country in a given
Product (GDP) year, including total consumer, investment and government spending plus the value
of exports, minus the value of imports.

Growth (economic) A period of economic expansion as typically measured growth in Gross Domestic
Product (GDP).

Hard Disk Drive (HDD) A data storage device for a personal computer.

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 Term Definition
Home equity The equity in a home is the difference between its value and the amount owed on it.
For example, if the home is worth $500,000 and a total of $300,000 is owed,
the available equity is $200,000.

HTML Hypertext Markup Language, the standard type of code used to create web pages.

IDR Internal Dispute Resolution.

Inflation The overall general upward price movement of goods and services in an economy
usually measured by the Consumer Price Index (CPI).

Insurance A method of managing the risk of loss or damage to an individual or property by

transferring the risk to an insurance company in return for payment of a premium.

Interest The cost of borrowing money on a loan, or the amount earned on an

interest-bearing account.

Internet A global system of interconnected public networks, enabling users to connect to

computers across the globe to access a wide range of resources, information and
services.

Intranet A local or restricted communications network.

Intrusion detection Software systems to detect and monitor hacking or other cyber security threats.
systems (IDS)

Investment The use of savings to make money grow and/or to increase income through the
purchase of capital goods.

IO Interest only.

Johari Window A self-awareness tool developed by Joseph Luft and Harry Ingham in 1955.

Jurisprudence The theory and study of law.

Kaizen A Japanese term meaning change (kai) for the good (zen).

KPI Key Performance Indicators.

Legislation A law that has been enacted by a parliament.

Lending Making a wide range of secured and unsecured loans available to consumers and
other borrowers for a range of purposes.

Lessee Borrower.

Lessor Credit provider.

Lien A claim.

Life insurance Insurance against personal risk, including the potential loss of income or assets that
may arise as a result of illness, injury or death.

Lifetime annuities A type of insurance that transfers the risk of outliving one’s savings, paid for using a
(guaranteed) lump sum in return for a guaranteed income stream.

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 Term Definition
Line of credit An agreement allowing a borrower the ability to withdraw money from an account
up to an approved limit.

LMI Lenders’ mortgage insurance.

Loan to Value Ratio The amount of money that a credit provider will lend in relation to the property
(LVR) value.

Local Area Network A computer network that connects computers within a limited geographical area,
(LAN) such as a small office.

Mentoring Mentoring is a relationship between two people with the goal of professional and
personal development. The mentor, an experienced individual, is paired with a less
experienced person or mentee to share knowledge, experience and advice.

Mission statement A written declaration of an organisation’s core purpose and focus that normally
remains unchanged over time.

Mobile commerce (or Offers similar facilities to e-commerce, but via the mobile telephone network.
m-commerce)

Monetary policy Setting the interest rate on overnight loans in the money market (‘the cash rate’)
by the Reserve Bank.

Mortgage A form of security for a loan usually taken over real estate. The lender
(the mortgagee) has the right to take or repossess the real estate if the
mortgagor fails to repay the loan.

Mortgagee The credit provider.

Mortgagor The borrower.

Negatively geared A rental property that is purchased with the assistance of borrowed funds and the
property net rental income, after deducting other expenses, is less than the interest on
the borrowings.

Network (computer) A way of connecting computers via a telecommunications line to enable computers
to exchange data.

Non-verbal Communication that occurs outside of words or speech.

communication

Net Promoter Score The Net Promoter Score is an index ranging from –100 to 100 that measures the
(NPS) willingness of customers to recommend a company’s products or services to others.
It is used as a proxy for gauging the customer’s overall satisfaction with a company’s
product or service and the customer’s loyalty to the brand.

Optical Character Software that converts scanned text into machine-encoded or computer-readable
Recognition (OCR) text.

Overdraft The most common form of business borrowing, a loan arrangement in which a bank
extends credit up to a maximum amount, against which the customer can write
cheques or make withdrawals.

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 Term Definition
P and I Principal and interest.

Pareto principle Also known as the 80/20 rule, the principle that 80% of the results come from 20%
of the items or effort.

Pension An income stream available after retirement and usually paid for
by superannuation.

Performance appraisal A formal process to provide an employee with comprehensive feedback on their
work performance as well as plan future career development.

Policy A statement of principles, guidelines or rules about how processes are conducted in
an organisation.

Principal The original amount borrowed on a loan or the remainder of the original borrowed
amount still owing, excluding the interest.

Procedure A set of steps that are performed to obtain a specified outcome.

Project management The management of a discrete set of work to deliver stated outcomes.

Prospect A person regarded as likely to become a customer.

Qualitative data Data that relates to or is measured by the quality of something rather than
its quantity.

Quantitative data Data that relates to or is measured by quantity.

Recession (economic) A period of general economic decline, often defined as a contraction in the
Gross Domestic Product (GDP) for six months or two consecutive quarters.

Refinance When a new loan is taken out to pay off an existing one. Refinancing can be done to
extend the original loan over a longer period of time, reduce fees or interest rates,
switch banks or move from a fixed to a variable loan.

Regulation A form of secondary legislation, giving more detail to the primary legislation.

Revolving line of credit A credit arrangement that does not have a fixed number of payments, such as a
credit card or overdraft.

Risk The effect of uncertainty on objectives. In finance, the probability that an actual
return on an investment will be lower than the expected return.

Risk profile The level of risk an individual or corporation is prepared to accept.

Root directory The first or uppermost directory in a computer file system hierarchy.

Sales cycle This is the process followed by a mortgage broker to acquire a customer, find out
the customer’s needs, recommend a solution and then implement the customer’s
decision, and provide ongoing service.

Saving The accumulation of surplus funds resulting from thrift.

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Scorecard Typically a numerical measure or an assessment measure of an area of
key achievement.

Search Engine An attempt to move a website further up the ranking of websites following a
Optimisation (SEO) search query.

Security An asset such as a property that guarantees the lender their borrowings until the
loan is repaid in full.

SMART goals SMART goals are Specific, Measurable, Action-orientated, Realistic and
Time-related.

Spam Unsolicited emails, often for marketing purposes.

Spending The payment of money, usually in exchange for goods or services in order to satisfy
an immediate need.

Strategic planning A review of short, medium and long-term goals and the development of strategy or
direction to achieve these goals.

Style guide A set of rules or standards for creating and designing documents.

Superannuation A savings system to provide funds in retirement; superannuation funds are privy to
certain tax concessions.

Target market A group of customers, perhaps distinguished by a geographical area, age group,
profession, occupation or income group, on whom a business is focusing its
marketing efforts.

Target marketing A process of focusing marketing activities on a particular market segment or group.
The product or service offered must match the identified need of that
particular group.

Term life insurance Insurance that provides a payment in the event of the death of the life insured
within a specified term.

Torrens A system whereby ownership and all dealings on a property are detailed on the one
document, i.e. a certificate of title or deed of grant. Under this system, a mortgage
is a charge or encumbrance on the title. Registration is compulsory to effect legal
transfer of an interest in property and each time the property is sold, mortgaged or
a mortgage discharged, the transaction is recorded on the certificate of title.

Total and permanent Insurance paid as a lump sum if the life insured suffers a disability and becomes
disability (TPD) totally and permanently disabled.
insurance

Transaction An activity involving the purchase of goods or services in exchange for money or
some other form of negotiable entity.

Trauma (or critical A type of disability insurance and is usually effected as an extension (or rider) to a
illness) insurance life insurance policy, providing a lump sum payment to the policy owner upon the
diagnosis of one of several specified medical conditions or injuries, for example,
cancer, stroke, heart attack and paraplegia.

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Universal Serial Bus USB is an industry standard for connection, communication and power supply
(USB) between computers and electronic devices.

Universal Serial Bus A portable storage or memory device using a USB connection.
(USB) drive (also
known as a flash drive
or memory stick)

Vision statement An aspirational description of what an organisation would like to achieve or

accomplish in the mid-term or long-term future.

Website A location connected to the Internet that maintains one or more pages on the
World Wide Web.

Whole of life Life insurance that has a savings element as well as an insurance element.
insurance

Wide Area Network A computer network that connects computers over a large area.
(WAN)

Workforce planning Planning that looks at current and future organisational demand, as well as
regulatory requirements and organisational objectives and matches the type and
number of human resources required to meet this demand.

World Wide Web A system of interlinked hypertext documents that are accessed via the Internet.
(WWW)

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