| | I | Indemnity Guarantee Premium - IGP |
|
| What is IGP?
IGP stands for Indemnity Guarantee Premium. This premium is for the creditor to be ensured if a loss occurs. When ever a loaner takes a mortgage loan which is above the 70%-75% (this may vary from loaner to loaner) the loaner asks for a premium in case the customer defaults on his payment. This way the lender is secured against considerable money loss.
For example you live in a house which costs £200.000 and the mortgage is £160.000 this means 80% if you default on you payment and loose the house. Now the when the mortgage company is selling of the house then it sells it as fast as possible to cover the loss, this means that it's offering it on a lower price to get rid of fast as possible. Now in these cases the creditor would normally loose money, also additional fees unpaid does are added up here. To protect him self the loaner asks for a premium. You should know that only the creditor is protected and not you. Because the market is really competitive then these loan percentages change from loaner to loaner some only need a premium above 90%. | | | | |
|
| |
