The drafting of loan and security documentation demands technical excellence. Understanding transaction sensitivity requires experience and knowledge. Lenders wishing to enforce transactions must be certain that transaction documents can withstand sustained and novel defaulter contentions.
A loan and/or mortgage agreement is a legally binding contract in which one party (the Borrower) receives money from the other party (the Lender) with the intention that the Borrower will repay the money to the Lender. An agreement is formed upon entering the loan in order to protect the Lender and Borrower’s best interests.
What is included in a loan/mortgage agreement?
A standard loan/mortgage agreement will generally include two sections; a Letter of Offer and the Terms and Conditions.
The Letter of Offer is the most important part of your loan/mortgage agreement as it contains the details of your loan. It specifies information such as the agreed loan amount, the annual interest rate and what the Borrower’s repayments will be on a weekly, fortnightly and monthly basis.
The Terms and Conditions will outline exactly what you are agreeing to when you accept a loan or mortgage. The Terms and Conditions explain both the Lender and Borrower’s responsibilities and obligations, all the common clauses that apply to your loan or mortgage and even circumstances such as how interest will be calculated.