What is a Mortgage?
A mortgage is a legal agreement that conveys the conditional right of ownership on an asset or property in exchange for lending money at a predetermined interest rate. With the rapid growth of the Australian property market in recent years and its continual rise, mortgages have been a hot topic for a lot of individuals, families and companies.
In comparison, a loan agreement, for smaller loans generally where a security is not needed, whether you are borrowing or lending a sum of money, it is wise to enter into a Loan Agreement so all parties are in agreement with the terms of the loan.
There are various legal implications of entering into a mortgage and/or loan agreement and Rockliff Snelgrove Lawyers can guide you through the process including providing advice in relation to the re finance to ensure the process is completed as smoothly and efficiently as possible. If you are considering entering into a mortgage and require independent legal advice before you put pen to paper, please contact our office and we can provide you with our expert advice.
Should I refinance my home?
There are several reasons why you may want to refinance your current home. It may be because you are not getting the best rate possible and wish to lower your loan repayments; you would like to use the equity in your home to purchase another asset such an investment property or just consolidate your debts.
When refinancing your property to purchase another property, there are risks involved such as depreciation of the property, market volatility and potentially difficult tenants all of which need to be carefully considered.
If you are considering refinancing your home contact Rockliff Snelgrove Lawyers today and we can advise you of the legal implications of commencing the refinance.
What is a Guarantee and Indemnity?
Although a Guarantee and Indemnity can be dealt with in the same legal document, there are slight differences (and liabilities) depending on whether you are providing a guarantee or an indemnity.
A Guarantee is a legal document where the Guarantor (a third party) accepts the responsibility for a specific debt that is owed by the borrower (second party) to the lender (first party). In the situation where the borrower cannot repay the debt under the terms of the agreement, the lender can then go after the guarantor for payment of the debt. The guarantor will only be liable to the extent that the borrower is liable to the lender. This can obviously have serious legal implications if are entering into or have entered into a Guarantee and Indemnity.
Similarly, an indemnity arises when that third party compensates the lender against any loss regardless of whether that loss is caused by the borrower. In this sense, even if the borrower can perform under the agreement, and the lender has suffered loss, they will still be able to go after the third party who provided the indemnity, to compensate them for the loss that they have suffered.
It is important to obtain expert legal advice in relation to a Guarantee and/or Indemnity to ensure that you are fully aware of the consequences if the borrower is unable to pay the relevant debt and the lender attempts to go after you for that debt, or if you decide to indemnify someone to perform a particular obligation.
Contact Rockliff Snelgrove Lawyers if you are considering becoming a guarantor or provide an indemnity for someone else.