Getting ready to buy your first property? If so, are you confused by some of the terms being thrown around such as mortgage deed?
Purchasing a property can come with a lot of paperwork and things to consider. And if you’re unfamiliar with the process, it’s common to feel overwhelmed with everything that needs to be completed.
But don’t panic.
In this expert guide, we’ll cover everything you need to know regarding mortgage deeds including:
- What are mortgage deeds?
- Who can witness them?
- Can they be changed further down the line?
By following this information, you’ll be confident in the buying process and be able to find the best mortgage for you.
What Is a Mortgage Deed?
A mortgage deed is a legally binding contract between you and the mortgage lender. It sets out terms and conditions of the mortgage such as the amount to pay back, repayment dates, rates and duration.
Once signed it’s legally binding and promises the lender you can pay back what’s owed. As such it’s important you read and understand the mortgage deed carefully before signing it.
If you have questions about the deed or aren’t sure about the proposed agreement, consult your solicitor immediately.
Why Do You Need a Mortgage Deed?
The mortgage deed is ultimately insurance for the lender.
Most deeds have a clause in them which states if you default on the repayments, they can foreclose the property. This means that they can take ownership and sell the property to recover the money which is owed.
However, there are circumstances when the borrower can arrange a new repayment plan with the lender. As such, this helps prevent foreclosure on the property and allows you to keep possession of it.
Who Can Witness a Mortgage Deed?
A mortgage deed must be signed by an independent witness to ensure its authenticity. If there was ever a dispute over whether someone signed a deed, the witness will be called upon to testify.
Without a witnesses signature, the deed would not be a legal document and the agreement would not stand.
So, because of the importance of a witness signing the agreement, there are limitations on who it can be. A witness cannot be anyone who falls into the following categories:
- A relative
- Someone with an interest in the property
Can You Remove Someone From a Mortgage Deed?
In the case of a divorce or relationship breakdown, one individual may want to take full ownership of the mortgage instead of relinquishing the property.
It is possible to do this but, they’ll need permission from the lender. After all, they’ll become solely responsible for the repayments so it’s important their finances are in order.
Speak to One of Our Mortgage Brokers Today
If you’re looking to buy a property or remortgage your home, we suggest you speak to one of our expert team members.
They’ll be able to discuss your circumstances and financial situation before finding the best mortgage option for you.
So, call our award-winning team on 0800 32 88 680 today for a no-obligation chat.
