When is a first charge a second charge ??

11025
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When is a first charge a second charge ?? Jun 7, 2016 9:40:29 GMT

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Post by 11025 on Jun 7, 2016 9:40:29 GMT

Morning everyone ,

Just had an email from Funding Secure alerting me to the latest offering , which I doubt I will be partaking in at this time , not withstanding that I have a question regarding the wording used ,

"This is a supplemental loan for £10,000 secured by a first legal charge on a property in Newark valued at £180,000.

There is already one loan secured against this property for £120,000, in the event of a default this loan would therefore fall behind the first loan"

Am I correct is assuming that this then isn't a first charge , but a second charge , I have noticed this previously with their loans , hopefully someone with more legal knowledge can confirm or deny ,

cheers

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archie Posts: 1,838 Likes: 1,842	When is a first charge a second charge ?? Jun 7, 2016 9:46:28 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by archie on Jun 7, 2016 9:46:28 GMT I read it as meaning both loans are via FS so first charge in respect of lenders but second charge in respect of repayment priority. I could be wrong
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SteveT
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When is a first charge a second charge ?? Jun 7, 2016 9:46:44 GMT

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Post by SteveT on Jun 7, 2016 9:46:44 GMT

Jun 7, 2016 9:40:29 GMT 11025 said:

Morning everyone ,

Just had an email from Funding Secure alerting me to the latest offering , which I doubt I will be partaking in at this time , not withstanding that I have a question regarding the wording used ,

"This is a supplemental loan for £10,000 secured by a first legal charge on a property in Newark valued at £180,000.

There is already one loan secured against this property for £120,000, in the event of a default this loan would therefore fall behind the first loan"

Am I correct is assuming that this then isn't a first charge , but a second charge , I have noticed this previously with their loans , hopefully someone with more legal knowledge can confirm or deny ,

cheers

It means that both loans are covered by the first charge to Funding Secure, but FS are ranking the supplemental loan behind the original one (else the LTV that the original lenders were told would no longer be correct). So legally it's a first charge but in practice you can regard it as being like a second charge.

[crossed with archie]

Last Edit: Jun 7, 2016 9:47:17 GMT by SteveT

11025 Member of DD Central Posts: 718 Likes: 830	When is a first charge a second charge ?? Jun 7, 2016 9:54:41 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by 11025 on Jun 7, 2016 9:54:41 GMT Thanks for the confirmation guys .
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When is a first charge a second charge ??

Post by 11025 on Jun 7, 2016 9:40:29 GMT

Post by archie on Jun 7, 2016 9:46:28 GMT

Post by SteveT on Jun 7, 2016 9:46:44 GMT

Post by 11025 on Jun 7, 2016 9:54:41 GMT