Lenders and mortgage insurers categorise different types of residential security as having different sale-ability and therefore, exposing them to different levels of risk. This is reflected in the percentage that the lenders and mortgage insurers will lend against the security.

It is important for you to have a general understanding of these percentages when they are discussing options with their clients. You may wish to revisit this in Module 3: Topic 5 of this program. That topic also looks at the percentage lenders will advance against a property in light of the nature of the title to the property. You might also want to familiarise yourself with these percentages.