4. Borrowers & Lenders Flashcards
Bridging loans
Short term finance to help buyer purchase new home without selling existing
Further advance
Top up on their existing mortgage from existing lender
Second charge
- An alternative way of raising money
- Second mortgage on same property
- Cheaper than remortgage if ERC
- If defaulted first charge gets priority
Regulated BTL
Where the property is occupied by the borrower or a relative
Consumer BTL
Aimed at accidental landlords (travelling, inherited) regulated by FCA
Business BTL
Not regulated and is aimed at customers who aim to make a profit and run a business from it
Semi commercial mortgage
A mortgage which combines residential and commercial usage:
- doctors surgeries
- bed & breakfast
- shops, offices, studios
What is a building society
A mutual organisation owned by its savers and borrowers
In terms of power to raise funding it’s restricted by the building societies act 1997
What is securitisation
Process of raising funds in the secondary market by issuing mortgage backed securities
