13. Secured and Unsecured lending

Question 1

Mortgagor

Answer 1

The Borrower

Question 2

Mortgagee

Answer 2

The lender

Question 3

Pension Mortgages?

Answer 3

Pensions can be used to pay off mortgages

Question 4

Mortgage Interest Options

Answer 4

1. Variable rate
2. Discounted rate
3. Fixed rate
4. Capped rate
5. Base rate tracker
6. Flexible
7. Low start
8. Deferred Intrest
9. CAT Standard

Question 5

Loan to value ratio

Answer 5

The amount of the loan in relation to the value of the asset for security expressed as a percentage .

100,000 - £80,000 = 80%

Question 6

Lifetime mortgage

Answer 6

Will lend 55% of property value

Question 7

reversion plan work

Answer 7

selling a percentage of their property to the scheme provider.
Customer retains the right to live in the house

Question 8

Bridging Finance

Answer 8

Can be used by those arranging a loan to finance a new purchase

Question 9

First Charge

Answer 9

A legal right to have first on a property if a borrower defaults on repayment of the mortgage loan

Question 10

Second Charge

Answer 10

a legal call on a property after all the liabilities to the holder of the first charge have been settled

Question 11

Unsecured Borrowing

Answer 11

Personal loans
Overdrafts
Credit cards (revolving credit)