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Mortgages and Securities Explained

This information was reproduced with permission by Dorien Forster 1

Secured

A secured mortgage gets registered on the title of a property and has priority over unsecured mortgages in case of mortgageee sale. A secured mortgage can be in 1st, 2nd, 3rd, position and will be paid out accourding to its ranking.

Unsecured

Unsecured means that the property is not being used for security. In the case of a mortgagee sale the unsecured mortgage will be paid out after all the secured mortgages ahead of it in ranking have been satisfied.

Caveat or Lien

This is a registered interest in the property. To register a caveat you need to convince the lawyer that you have a legitimate financial interest. Often a finance company with a Hire Purchase for the family car, may register a caveat on the family home until the car is paid off.

Priorities

This is a limit set by the bank on a poripery to ensure thiat if the property goes to mortgagee sale that the bank is covered for expenses aboivr the outstanding balance of hte mortgage, e.g. arrears, auctioneer fees, penalties, lawyer fees etc. It should be noted that the priority sum does not represent the customer's debt owing to the bank.