MyRate Education Centre
Property as Security
When a customer borrows money for a home, the title deed is under the borrowers name, not the banks.
If the lender goes under, the customer is protected, the lender cannot take the property and sell it.
There are then two options for the lender:
- They are taken over by another institution who then controls the home loan (things continue as usual for the borrower)
- Or less likely is that it will be seen as a debt write off: the borrower gets their house for free.
However, if the borrower does not make repayments and defaults on their loan, they may be liable to forfeit their property to the lender to repay the loan.
If you find that you may be in this situation, talk to your lender as soon as possible. You’ll probably find the lender will be willing to work with you to sort things out.
Tips:
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| Always check the credibility of your lender before going ahead. |
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