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Security

Security (such as a car or a home) ensures the banks interests are protected if you don't meet your home loan repayments.

When banks lend you money, they want to use a physical asset to 'secure' their money. This means that if you default on your home loan and communication breaks down, they have an asset to sell to recoup the money that they have lent you. Note that this process, a mortgagee sale, is a last resort for the bank and they will try to work through any difficulties before getting to this stage.

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