Flashcards in Standard sec. questions Deck (7)
What is a standard security?
Clients will usually refer to a standard security as a “mortgage”.
When a bank, building society or other lending institution makes money available for the purchase or financing of heritable property, it will require among other things, to be granted a fixed charge over the title to the property.
In what senses does it differ from a personal loan?
Personal loans are unsecured loans and standard securities are secured loans (secured over your property). With an unsecured loan, your house is not immediately at risk if you fall into arrears, although the lender can take court action to make you pay the money back.
Can a client grant more than one standard security over their house?
Yes – but not everyone can be first in the queue for repayment in the event of a sale of the property. Instead, multiple securities rank in relation to each other, in accordance with the rules of priority, which will determine the order in which they are entitled to payment in the event of enforcement of these securities
And why are lenders concerned about the amount of “equity”.
Home equity is a homeowner's interest in a home. It can increase over time if the property value increases or the mortgage loan balance is paid down
What happens if I want to sell my house?
they have some control
Discharge and pay off
What does it require me to do?
Standard conditions - pay on time