FINS1612 Chapter 10: Viney8e_IRM_ch10
Document Summary
The main providers of term loans are the commercial banks. The margin will reflect the level of credit risk of the borrower. Thomson-reuters publishes libor daily: a range of fees may also apply, including an establishment fee, a periodic service fee, a commitment fee or a line fee. The borrower (mortgagor) conveys an interest in the land to the lender (mortgagee). This is normally required where the loan-to-valuation ratio is above. 80 per cent: the formula to calculate the instalment on a mortgage loan is, some mortgage lenders use a process of securitisation to finance continued growth in their mortgage lending. The lender sells a parcel of existing loans to a trustee of a special-purpose vehicle. The trustee funds this purchase by issuing new securities such as bonds into the capital markets. The cash flows due on the mortgage loans held by the special-purpose vehicle are used to pay interest and principal commitments due on the bonds.