This is sometimes required when the mortgage exceeds a certain percentage of the value of the property (usually 75%). It takes the form of an up-front, one off fee paid to the lender to protect them against the borrower defaulting on the loan. Occasionally the lender may require a parent to be a guarantor or for other securities (such as other property or shares) to be made. This form of additional security is normally an Indemnity Guarantee Premium or Mortgage Indemnity Premium.
This is required when the mortgage exceeds a certain percentage of the value of the property (usually 75%). The form of additional security used is normally a Mortgage Indemnity Policy. Occasionally the lender may require a parent to be a guarantor or for other security such as shares or insurance policies to be pledged.
This is sometimes called a “mortgage indemnity guarantee policy” and is paid to take out an insurance policy, which will reimburse the mortgage lender if the mortgage borrower defaults on their payments for any reason. The mortgage lender normally starts the insurance policy at the same time the mortgage is agreed but the mortgage borrower has to pay the premium.
An up-front, one-off fee paid to the lender to protect against the borrower defaulting on the loan. This is usually charged on mortgages of more than 75% of the property value. Also known as Indemnity Guarantee Premium and Mortgage Indemnity Premium.
This is a premium charged by Lenders in order to indemnify themselves, and not the borrower, against any financial shortfall they may incur in the event of repossessing a property which must then be sold at a loss. It is applicable if the amount required is higher than a certain percentage of the property value, usually 75% loan to value; often the Lender will pay the cost of this insurance themselves between 75% and 90% loan to value. The charge may either be added to the loan or deducted from the advance on completion.
An Additional Security Fee (Mortgage Indemnity Guarantee policy) is paid to take out an insurance policy designed to indemnify the mortgagee (lender) against loss in the event of default on the mortgage repayment. It is normally taken out by the lender at the start of the mortgage and the mortgagor (borrower) is made to pay the premium! The premium is normally calculated as a percentage (5.8% is typical) of that part of the loan above a certain percentage of the property value, normally 70 - 75%. It is charged as a lump sum to the borrower and can usually be added to the mortgage advance. It should be understood that such policies are for the protection of the lender and NOT the borrower.