A first charge mortgage is the primary legal charge against your property, which takes priority over any other mortgages. If the property is sold or refinanced, the first mortgage is paid before any of the other mortgages charged on the property. Usually, the loan used to purchase the property is secured by a first charge.

Second and third charge mortgages have secondary and third priority behind your main mortgage. It is a secured loan, which means the borrowers property is used as security. Quite often Deeds of Priority will be entered into between the various lenders setting out the levels of their debt.

A mortgage debenture is a fixed and floating charge in which a loan is secured against a company’s assets. A legal document is registered at Companies House which notes the lender’s interest and prevents another lender obtaining a debenture. The debenture covers cash, property, tangible and intangible assets that are owned by the Limited Company.

A personal guarantee is an individual’s legal promise to repay a limited companies debts. Providing a personal guarantee means that if the business becomes unable to repay its debts, the individual guarantor is personally liable and responsible.