Conveyancing and Your Mortgage for Residential Properties
With the completion date agreed for the sale or purchase of a property, the issue of the mortgage is something that needs to be concentrated on to ensure that the process is completed on time and to the specifications of the agreed contract.
Before you are able to purchase a property, you need to arrange your mortgage. Without this, you will not have the funds available for a mortgage deposit to pay the seller. You will have received a draft contract from the buyer, which will have been analysed by your solicitor to go over the conditions of the sale as they have been set out.
Who to Call?
When being considered for a mortgage, you will need to consider how much you can borrow, which depends on annual income and any dependent (children, family members, etc.), among other possibilities.
Contacting a mortgage broker is the easiest way to do this. The broker will provide you with an estimate of how much they are willing or able to lend based on your circumstances.
Before being accepted for a mortgage, a mortgage valuation must be carried out by the mortgage company to ensure that the property is fit for the proposed loan. This includes identifying any defects in the property that could affect loan security and is usually completed within 48 hours.
The mortgage valuation is typically paid for by the buyer, but you may get it done for free by the company as a goodwill gesture to attract further business.
The typical time-frame for mortgage repayments is 25 years, but it varies. The shorter the term, the higher your monthly payments, but you will also pay less interest. If you are able to pay off your mortgage as quickly as possible, then opting for a short-term mortgage will be more beneficial.
When this is completed, you will be ready to pay the mortgage deposit to the seller of the house. This usually works out around 10% of the full price. You are also required to take out Building Insurance which is in your best interests as you will be 100% responsible for the property once the exchange is completed.
If you are selling your house, you need to ensure that your mortgage is fully paid off to remove any liability problems for the next owner. By completing a TA13 form, which includes finalisation details and completion date agreements, you are guaranteeing that the house is free from any further mortgage repayments on your end.
Before completion of the sale, you will need to contact your mortgage company and request a redemption figure. This begins the process of paying off the remainder of your mortgage and the amount demanded by your mortgage company can then be paid when the sale to the new buyer is completed.
As the seller, your conveyancer will be required to obtain title deeds from the deed holder or any official copies that are available from the Land Registry. Along with this, they will also need to collect details on existing mortgage fees that demonstrate what still needs to be paid.
When completion day arrives, you can use the proceeds from the sale to go ahead with finalising the payment to the mortgage company. This outstanding mortgage payment will be completed by either your solicitor or the conveyancer to aid in the selling of the property.
There are also legal issues associated with organising the arrangement or paying-off of your mortgage. Once the agreed contract is signed by both parties, you are both liable for any infractions committed that might be considered a breach of the contract.
If either party backs out of the deal, the other is legally within their rights to sue them. If the buyer pulls out, then the seller will be able to keep their deposit. It is beneficial for the buyer, seller and housing chain to fulfil your buying commitments.
Should the seller be proven to have been untruthful when filling out the necessary forms, this can have effects on the buyer’s mortgage payment. If they believed they were buying a property with no defects, but the opposite is discovered during inspections, then this can affect the amount that the mortgage company is willing to lend.
Working with solicitors or conveyancers will make the legal process much more straightforward and will look to eliminate any problems for both parties.