What is a book debt?
A land charge is a land charge in which the creation of a land charge letter is contractually excluded. The mortgage is therefore entered only in the Division III of the land register. A mortgage is a charge on the property for a certain amount of money. It is regularly used as collateral and is one of the mortgages.
Flexibility of the book land charge
The property is liable up to the amount of the registered sum. The difference to a mortgage is that the mortgage is not tied to a loan amount. While the liability for the mortgage decreases with each repayment, a mortgage remains even after the repayment of a loan, unless it is deleted on application. This makes the landlord’s debt much more flexible and easier to manage because of the lower bureaucratic burden, as it can also be used for future loans to the same credit institution. For example, the land charge can not only be used for the purchase of a property, but later also for the modernization or renovation.
Claim for cancellation of the mortgage
After the repayment of the loan, the borrower is entitled to the cancellation or transfer of the mortgage. For this secondary obligation, which results from the credit agreement, the bank may charge no further fees. If a loan is secured by a mortgage, it is also called a real loan. The maximum collateral corresponds to the mortgage lending limit, which is determined by the mortgage lending value. If the debtor fails to meet the obligations under the loan agreement, the lender can assert the mortgage. In the extreme case, the property is then sold or auctioned.