In this brief blog, we are going to talk about what a mortgage deed is, where you can find your mortgage deed and provide you with a sample of a mortgage deed.
What is a mortgage deed?
A mortgage deed is a document that formally secures and charges money against a property. It is drawn up by the mortgage lender and must be signed by the borrower.
Most home purchases in the UK will happen with the help of a mortgage. This means that the mortgage lenders interest in the property must be protected and mortgage lenders do this through a mortgage deed. You should read the mortgage deed very carefully as you will be bound by any restrictions contained therein.
Some of the restrictions mortgage lenders may place in a mortgage deed include:
Restricting the borrowers right to undertake any structural alterations without giving consent first
Not to let the property – or part with possession of even part (for example taking lodgers) without securing permissions
Access and rights of way for the property.
Lenders will sometimes add ‘special’ conditions. These tend to require that recommendations from their building surveyor – this may be to carry out particular repairs on structural parts of the building etc
To ensure you have adequate home insurance for the minimum replacement value or cost to build.
Whether or not the owner holds right to any roads that cross the property.
If you break any of the terms of the mortgage which are in the mortgage deed the mortgage lender may repossess the property.
If a borrower is taking out a high loan to value mortgage then some mortgage lenders may require the borrower to take out a mortgage indemnity insurance which insures the mortgage lender should the borrower default on the mortgage. The mortgage lender will be able to claim from the mortgage company should they suffer a loss after the borrower defaults on the high loan to value mortgage.
Sample of a mortgage deed
A mortgage deed from the family building society
You are a member of the Society and you acknowledge that you have received the Loan Amount.
2 You accept the Mortgage Offer made by us.
3 The Society’s Mortgage Conditions 2017 (the Mortgage Conditions) form part of this Mortgage. You confirm you have received a copy of the Mortgage Conditions.
4 The Mortgage is also made for securing further advances but we are not obliged to make any.
5 You, with full title guarantee
5.1 Charge the Property by way of legal mortgage with the payment to us of all moneys payable by you under or otherwise secured by this Mortgage.
5.2 Assign or agree to assign to us the full benefit of every covenant agreement right certificate guarantee indemnity or undertaking held relating to the Property.
6 You apply to enter the following restriction in the proprietorship register of the registered estate:
“No disposition of the registered estate by the proprietor of the registered estate or by the proprietor of any registered charge, not being a charge registered before the entry of this restriction, is to be registered without a written consent signed by the proprietor for the time being of the charge dated …………./…………./……………………. in favour of National Counties Building Society, referred to in the Charges Register”.
In this brief guide, we discussed what a mortgage deed is. If you have any questions or comments please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.