What is the difference between Caveat Loans & Mortgage Loans?

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A caveat loan is a secured business loan using a registered caveat against real estate as security. Hence, the difference between a caveat loan and a mortgaged loan is the type of security registration. As such:

  • Firstly, a caveat expresses only a financial interest in the property with minimal recovery powers. Therefore, a caveat does not give the ability to sell the property and recover monies owed.
  • Secondly, a first or second mortgage gives the lender recovery powers in the event of a default.