Caveat loan
A caveat loan is short-term finance under which the lender lodges a caveat over a property the borrower already owns; a caveat records a claimed interest in the land and is not itself a mortgage, so the lender's security depends on the underlying loan documents.
Caveat loan, explained.
A caveat is a notice on the title that a person claims an interest in the land; it alerts anyone dealing with the property and can hold up a dealing until it is resolved, but security, priority and enforcement depend on the loan and charge documents behind it and on the legal position, not on the caveat alone. Because the arrangement ranks behind any registered mortgage, caveat lenders lend at low LVRs on the equity above the first mortgage and Caveat lenders assess the available equity and price for the risk; security and priority depend on the underlying documents and legal position.
Terms are short, typically one to twelve months, and interest is often prepaid. Caveat loans may be considered for a settlement, a deposit on a purchase or a business need, with an assessed exit such as refinance or sale. The arrangement needs legal assessment before it is signed.
When the reading raises a question, ask it.
A finance review starts with a conversation and a written position from Dayan Kasturiratna, who provides the credit assistance on every file. No credit check to start.
The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
