a fee to cover the cost of purchasing a mortgage indemnity insurance policy
This is an insurance premium that you have to pay for some mortgages, usually when the Loan To Value is higher than a certain figure. It protects the lender to some extent if you default on the mortgage for any reason. It is important to understand that although you have to pay the premium, the lender benefits from any payout, and that if the payout doesn't cover their costs they may seek further money from you. With many mortgages you can add the Higher Lender Charge to the loan, unless this takes your Loan To Value over a certain figure. The insurer may pursue the defaulter for reimbursement of any monies which have been paid out in respect of lenders claim.
If the amount you borrow is more than, say, 75% of the value of the property, you may be charged a higher lending charge.
A fee extracted by lenders for security when issuing large loans. In a mortgage over 90% the value of the property, a high lending charge is retained in case of repossession.
This insurance covers the lender if your property gets repossessed and the lender does not get all its money back. It protects the lender, not you. You would still be responsible for reimbursing the insurance company if they have to pay out to the lender. It is usually you who has to pay the one-off premium as part of the lender's conditions, but most lenders allow it to be added to the overall mortgage debt, and is collected when the mortgage is redeemed in the future. Usually anyone with at least a 10% deposit will probably escape it.
Higher Lending Charge: This is an insurance effected by a lender in relation to a client's mortgage where the amount to be lent is over certain limits. The insurance covers the lender in cases where the property is sold via repossession and the proceeds are insufficient to cover the whole of the debt outstanding. Where the lender claims off the insurer, the insurer has a right to claim these amounts back from the client, which includes all sums including any additional interest, and legal fees. Some lenders will pay the premium themselves to the insurer, depending on the amount, however other lenders may ask the customer effecting a loan to pay for this charge.
A charge that is sometimes made if a borrower wants a mortgage that exceeds 75% of the propertyâ€(tm)s value. This figure is known as the ‘Loan to Valueâ€(tm). The charge only applies to the additional lending required, over the 75% threshold. The money is used to pay an insurance premium that protects the lender from losing money should they have to repossess the house for any reason. Although it is the borrower who pays for this insurance, they receive no benefit from it.
This is a fee sometimes payable by the borrower. Where a high percentage of the property value is borrowed. Any higher lending charge will be detailed in an illustration.
A fee charged by a lender where the amount borrowed exceeds a given percentage of the value of the property.
Most lenders will typically only loan a maximum of between 75% and 90% of the purchase price of a property. In situations where a borrower is looking to borrow an amount greater than the lender's usual limit, a Higher Lending Charge is levied, usually in the form of a one-off payment.
Lenders often charge this fee if you are borrowing more than a certain percentage of the property’s value to protect themselves if you default. Many lenders (such as Mortgage Express, for example) don’t charge these fees at all, so it is worth checking with your lender to see what their policy is.
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% LTV; often the Lender will pay the cost of this insurance themselves between 75% and 90% LTV. The charge may either be added to the loan or deducted from the advance on completion.
This is a one-off fee charged by some lenders where the “Loan To Value†(see below) is more than around 70% or the amount of the loan is high. The fee is used by the lender to buy insurance to protect itself in case your property has to be taken into possession and then sold for less that your outstanding mortgage debt. It is important to note that the insurance covers the lender, and not the borrower. However, if a claim is paid out under such insurance, the insurers generally have the right to recover the claim from you.
A single premium policy, paid for by the borrower on completion of the mortgage. It insures the lender for losses in excess of a percentage of the loan-to-value sum. The borrower still remains liable for any amount claimed.
A borrower borrowing typically over 75% of the purchase price may have to pay a higher lending charge to the lender. The lender may then use some or all of this to purchase an insurance policy which will protect them in the event of repossession.
A payment to a lender for an insurance policy for the lender's benefit when they lend above a certain percentage of the property value. The policy covers the risk of selling a repossessed property at a loss. (Previously referred to as Mortgage Indemnity Premium or lender's risk fee.)