Mortgage: Special Conditions..Please explain

Armada

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536
Hi,

I would appreciate if someone could please explain what the following paragraph means on an investment mortgage, loan offer letter from 2006, under the heading Special Conditions.

"The lenders security shall comprise (a) a first legal mortgage or charge over the property described (Property 2) and (b) if the existing mortgage or charge secures present and future advances, the existing first legal mortgage or charge over the property (Property 1) must be stamped up to cover the aggregate of the Borrower's borrowings, Or if the existing mortgage or charge secures a fixed sum only or if the existing mortgage or charge is a collateral mortgage or charge, a second or further legal mortgage or charge over Property 1 must be put in place."

Background: BTLs

Property 1 bought 2002.. Mortgage now paid in full

Property 2 bought 2006 .. 70% Mortgage paid. All payments (incl capital) are fully up to date.

Basically my question is... is there a charge on Property 1 at this stage because of its link in the special conditions of Property 2's loan offer? Or was there ever a charge actually on it?

Many thanks

** Please move if posted in wrong forum.
 

cremeegg

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3,316
I would think that the question "is there a charge on Property 1" is a matter of fact today. Check with the PRA if there is a charge.

Wether the above gave the bank a right to put a charge on property 1 in 2006 isn't clear to me, but if they did not put such a charge then they could hardly do so now.

If there is a charge, you could seek to have it removed on the basis that the mortgage is paid in full. I doubt the bank would be able to refuse just on the basis of the above.
 

Armada

Frequent Poster
Messages
536
I would think that the question "is there a charge on Property 1" is a matter of fact today. Check with the PRA if there is a charge.

Wether the above gave the bank a right to put a charge on property 1 in 2006 isn't clear to me, but if they did not put such a charge then they could hardly do so now.

If there is a charge, you could seek to have it removed on the basis that the mortgage is paid in full. I doubt the bank would be able to refuse just on the basis of the above.
Thank you cremeegg. Its unclear to me too, hence my question. We are trying to redeem the deeds for property 1, as the mortgage is paid. The bank are not very helpful and have highlighted the above special condition of our other property. We were never aware of the link between the two (obviously our own fault at the time of signing the acceptance of the loan offer). I still cant really work it out now either after reading it several times.
 

cremeegg

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3,316
When you say 'redeem the deeds' do you mean get physical possession of them. Nowadays that is largely irrelevant. The important question is if there is a charge registered with the PRA, and only they can confirm that.
 

Armada

Frequent Poster
Messages
536
When you say 'redeem the deeds' do you mean get physical possession of them. Nowadays that is largely irrelevant. The important question is if there is a charge registered with the PRA, and only they can confirm that.
Thank you, I’ll check the PRA out.
 
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