Charge

What is a Charge?

In the context of credit, Charge is another word for Mortgage, but can also used as slang for ‘taking a out mortgage’.

A First Charge is usually a First Mortgage over a property, and a Second Charge is a Second Mortgage.

Any asset can be charged, not just property: boats, cars and indeed almost anything both fixed and otherwise is chargeable.

A charge may not always be a legal mortgage. An Equitable mortgage is one where no formal documentation may be in place, but the ‘charge’ is effected simply by possession of the asset. The holder of that asset is said to have a Lien or Equitable Lien over the asset.

Holders of legal mortgages (Mortgagees) have a power of sale if payments are not made.

Holders of equitable mortgages or charges do not have a power of sale, and if they wish to enforce their security, they need first to apply to the Courts for an Order for Sale.

A Charge should not to be confused with a Total Charge for Credit which is a defined term in a credit agreement regulated by the Consumer Credit Act 1974.

Jargon Buster

Use the links below and the resulting list of terms on the right to locate the term you are looking for. If you can't locate it, please get in touch.

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
keyboard_arrow_left

keyboard_arrow_right

We have loads of great customer reviews