Higher Lending Charge

This is a premium charged by Lenders in order to indemnify themselves, and NOT the borrower, against any financial shortfall they may incur in the event of repossessing a property which must then be sold at a loss.

It is applicable if the amount required is higher than a certain percentage of the property value, usually 75% LTV; often the Lender will pay the cost of this insurance themselves between 75% and 90% LTV.

The charge may either be added to the loan or deducted from the advance on completion.

Also known as: Additional Security Fee; Indemnity; Mortgage Indemnity Guarantee (MIG).

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