Originally Posted by PAULDPALMER
i would have thought that with a house if u dont pay ur mortgage then they would just take the house of u????,....unlike ay a creditcard/loan, they have to fight u and take u to court to get a penny out of u??
Correct they do however they have measurements in place to minimise the instances where they have to do so. Hence Credit checks.
Lenders also cover themselves by way of a Mortgage Indemnity Guarantee which in effect is an insurance policy taken out by the lender which allows them to sell off propertys in the event of reposetion at 75% of the market value. Allowing them to dispose of repossesions quickly.
Borrowers who do not have a large deposit to put down often have to pay a portion of this MIG on behalf of the lender.