WADSETTING Meaning and
Definition
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Wadsetting is a term used in finance and real estate that refers to the practice of borrowing against the value of mortgaged property. It is a specialized form of lending in which the property serves as collateral for the loan.
In wadsetting, the borrower (also known as the wadsetter) pledges their property as security for a loan, usually from a lender such as a bank or financial institution. The lender assesses the value of the property and offers a loan amount based on a percentage of its appraised value. This loan amount is known as the wadset.
Wadsetting can be utilized for various purposes, such as obtaining funds for investments, home improvements, or debt consolidation. The wadsetter retains ownership of the property but agrees to repay the loan amount plus any interest charged by the lender. Failure to repay the loan may result in the lender acquiring ownership of the property through foreclosure.
The interest rate on a wadsetting loan is typically determined by factors such as the borrower's creditworthiness, prevailing market rates, and the Loan-to-Value ratio (LTV) of the loan. The LTV ratio is the percentage of the property's appraised value that the loan represents.
Wadsetting has been a common practice in real estate for centuries and continues to be a viable option for individuals and businesses seeking access to capital without selling their property. However, it is essential for borrowers to carefully consider the terms, interest rates, and repayment schedule of a wadsetting loan before entering into such an agreement.
Etymology of WADSETTING
The word "wadsetting" originates from the Scottish dialect, particularly from the Scots term "wadset". "Wadset" is a combination of two elements: "wad" and "set".
The term "wad" comes from the Old Norse word "vad", meaning a pledge or security. "Set" is derived from the Old English word "settan", meaning to set or place.
In Scottish law, "wadset" refers to a type of mortgage arrangement where a property is pledged as security for a loan. Over time, this term has evolved into "wadsetting", which broadly encompasses the process of providing a property as collateral against a debt or mortgage.
Conjugate verb Wadsetting
CONDITIONAL
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CONDITIONAL CONTINUOUS
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CONDITIONAL PERFECT
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CONDITIONAL PERFECT CONTINUOUS
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FUTURE
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FUTURE CONTINUOUS
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FUTURE PERFECT
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FUTURE PERFECT CONTINUOUS
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IMPERATIVE
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PAST
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PAST CONTINUOUS
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PAST PARTICIPLE
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PAST PERFECT
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PAST PERFECT CONTINUOUS
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PRESENT
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PRESENT CONTINUOUS
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PRESENT PARTICIPLE
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PRESENT PERFECT
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PRESENT PERFECT CONTINUOUS
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