Gain clarity and certainty
Protect your financial interests
At Novum Law Group, we understand that loans and mortgages are often necessary and important arrangements in reaching your property or business goals. That’s why we offer expert advice and guidance to individuals and businesses seeking assistance with these financial arrangements so they have peace of mind.
Our team can provide you with the knowledge and resources you need to make informed decisions about lending or borrowing money. Whether you are seeking to enter into a loan arrangement for personal or business purposes or mortgaging a property, we can help you navigate the process to ensure your interests are protected.
Loan Agreements and Mortgages
Family Loan Arrangements
Reverse Mortgage and Equity Release Contracts
Enforcement and Securities
Don't leave this important life decision up to chance
It is a legally binding document under which one party, the lender, advances funds to another, the borrower. It outlines the terms and conditions of the loan and provides a legal framework that protectsboth parties’ interest. It outlines the terms of their agreement and therefore reduces the likelihood of misunderstandings between them.
Key considerations include the amount and term of the loan, purpose of the loan, interest rates, repayment schedules and what security or collateral is required. You should also consider the fees and charges that you must pay, record keeping and accounting and an exit plan and whether the borrower repay the loan before the due date and what fees may apply. It is also important to consider what actions or omissions will constitute a default and the consequences of default. Seeking legal advice ensures a thorough understanding of the agreement and protects your interests.
A personal guarantee is a legal promise by a guarantor to repay debt or meet the obligations of another person or company if that person or company defaults. They are often used by creditors to ensure that the directors or owners of a company, for example a director, is personally liable for the company’s debts. Personal guarantees add an extra layer of security that contractual obligations will be carried out. To be enforceable, the guarantee must be in writing and signed
correctly by the parties to the guarantee. A guarantee may require the guarantor to provide security for their guarantee, for example by giving a mortgage or charge over the guarantor’s assets. Personal guarantees can have significant adverse consequences including risk of loss of the guarantor’s property.
Collateral is an asset pledged by the borrower to the lender as security for the loan. If there is default, the lender can seize and sell the collateral to recover some or all the outstanding debt. Collateral is significant because it can reduce the lender’s risk by providing an alternative source of repayment. This can allow for lower interest rates as the lender’s risk is diminished. It provides the lender with confidence that the borrower is committed to repaying the loan and safeguards the lender’s interests as it holds a tangible asset in the case of default. The usual types of collateral include real estate, vehicles, or other valuable assets.
Loan defaults trigger legal processes and will depend on the terms of the loan agreement. The borrower will often incur late fees, default interest and penalties. The lender will usually be required to notify the borrower of the default, what steps must be taken to address the default, the period in which the default must be remedied and consequences of default. If the default is not remedied, the lender can enforce the security given to it under the loan agreement. This can include seizing and selling collateral and taking legal action against the borrower to enforce repayment of the debt.