53. Mortgage services: use of a property as the plague by purchasers of real property by existing property owners to raise funds for any purpose.

A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise money to buy the property to be purchased or by existing property owners to raise funds for any purpose. The loan is "secured" on the borrower's property. This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.

Capital Raising Mortgages

There are many reasons why you might wish to raise capital on your home.

A capital raising mortgage can help you secure funds for anything from renovations and improvements to investing in another property. First Mortgage can find the right capital raising mortgage for your needs. With a whole of market choice, we are experts in locating the best deal from thousands of mortgage offers.

What is a capital raising mortgage?

Capital raising mortgages are usually ways of remortgaging your house to release funds for other purposes. The cash could be for home improvements, a holiday, a new car or simply to consolidate existing debts. Many people use remortgaging to take advantage of lower mortgage interest rates when consolidating all their loans into one manageable monthly fee.

Is a capital raising mortgage right for you?

A capital raising mortgage can be a very useful short-term solution to financial problems, whatever you need the money for. The lower interest rates mean that by increasing your mortgage, you will likely pay less than getting an unsecured loan. However, you should consider the fact that it will mean larger mortgage repayments and a longer repayment term. There may also be early repayment charges on your current mortgage.

54. What does it mean “lease”?

Lease is a form of contract transferring the use or occupancy of land, space, structure or equipment, in consideration of payment, usually in the form of a rent. (James c.van Horne )

Leasing - is an economic activity aimed at investing of own or borrowed funds, whereby the lessor, according to the lease agreement, conveys to the lessee, in return for a payment or series of payments the right to use an asset for an agreed period.

This asset could be owned or acquired by the lessor on behalf of the lessee from the relevant supplier (seller) of the property. Thus the title to the leased asset remains with the lessor for the duration of the contract. (Commercial Code of Ukraine)

Elements in lease structure

• The Transaction: (Asset-renting transaction distinguishes a lease from a loan, lent out is money vs. lent out is the asset)

• Parties to a lease:

  • Two parties ( the owner and the user, the lessor and the lessee)

• The leased asset:

  • The asset may be anything - an automobile, aircraft, machine, consumer durable, building or a factory. Only tangible assets can be lease. Intangible assets cannot be lease. Handing over of possession is essential. Right to use)

• Lease period

• Lease rentals

• Residual value

• End-of-term options

• Upfront payments

Advantages of ‘LEASING’ to ‘LESSEE’

(Saving of capital, Flexibility and Convenience, Planning Cash Flows, Improvement in Liquidity, Shifting of Risk of Obsolescence, Maintenance and Specialized Services)

Disadvantages of ‘LEASING’ to ‘LESSEE

(Higher Cost, Risk of being deprived the use of asset, No Alteration in Asset, Penalties on Termination of Lease)

Advantages of ‘LEASING’ to ‘LESSOR’

(Higher Profits, Tax Benefits, Quick Returns)

Disadvantages of ‘LEASING’ to ‘LESSOR’

(High Risk of Obsolescence, Price Level Changes, Long Term Investment)