Mortgages

Question 1

What are the three types of mortgage?

Answer 1

Repayment mortgage, endowment mortgage and pension mortgage

Question 2

Describe the repayment mortgage

Answer 2

Requires a monthly repayments Linda. The repayment will consist party of the loan which has been borrowed and partly of interest on this loan.

Repayment in relation to a house purchase mortgage will usually be by monthly instalments over 20 to 25 years.

The mortgage and may also be required to take out a life insurance policy.

Question 3

Describe an endowment mortgage

Answer 3

Only interest is paid off by means of monthly instalments. The mortgagor will also take out an insurance policy with an insurance company.

There will be monthly payments of a premium to the insurance company and will be invested to pay the capital loan and the end of the policy.

Question 4

Describe a pension mortgage

Answer 4

A pension mortgage links and mortgage with pension arrangements for the mortgages retirement.

This type of mortgage is generally available only to the self-employed and it’s beneficial, for tax reasons, to high earners.

Question 5

Name the statute law which says that legal mortgages are legal interests

Answer 5

s1(2) Law of Property Act 1925

Question 6

How is the legal mortgage over registered land created

Answer 6

By deed

Expressly stating that the property has been charged with debt by way of legal mortgage

Has been registered in the charges register of the title

Question 7

Name at least two remedies available to mortgagee when the mortgagor defaults on payments.

Answer 7

Possession

Sale

An action in debt

Appointment of a receiver

Foreclosure

Liability of guarantors