Legalities of paying off mortgage

Phil_space

Registered User
Messages
62
Maybe someone with some legal expertise can advise me here...

About 10 years ago I bought an investment property A (mortgage 'A') borrowed on the equity of another investment property B (mortgage 'B'). I have recently sold investment property A but would like to use the proceeds of the sale to help pay off mortgage 'C' (a top-up mortgage), which is one of 2 mortgages on my PPR.

Is there any reason I can't do this? Am I missing something? I would appreciate any advice.

Phil
 
Unless the terms and conditions (and contract) for mortgage B specifically stated that when mortgage A was paid off that any proceeds would have to satisfy mortgage B (and it's highly unlikely that it did) then No there shouldn't be any reason you can't.

But I can't help feeling that there's something more to this.....
 
Thanks DerekO.

Nothing sinister. All mortgages are fixed rate (4.5%), with almost 2 years to run, and therefore cannot be 'part-paid'. However, they can be cleared in full but with a penalty.

I intend to use the proceeds of the sale plus about 30k of my own savings which is currently earning just above 1% net to pay off the mortgage on the PPR. Even with a penalty it would still generate savings of several k. Just checking there is no obvious reason I can't do this as if I use the proceeds to pay off the PPR I will be left with a 'mortgage' on a property that I no longer own.
 
Back
Top