What do you think is the biggest concern of banks when they lend you money? Well, cautious and conservative as they are, what banks fear most is that you wont be able to pay back the loan. It is not so much a question of trust, if you try to get away from them, theyll hire a debt collection agency or have you called up before a court. What they fear is simply that you will not be able to pay them back, even though you want to.
Looking at it from their point of view it makes sense. Every day they hand out a massive amount of money to total strangers. Each mortgage alone averages over hundred thousand pounds. Thats a lot of your money to simply hand over. So what banks do is they get security. This means that even if things go wrong for you, they will probably still get their money back.
A secured loan must be secured over a particular asset. An asset is anything thats worth money. The asset could be a car or a famous painting, but usually, especially for mortgages, the asset the banks are interested in is your house. The loan will therefore be secured over your house.
In practice what this means is that while the deeds to the house are in your name, the...
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