MORTGAGE INFORMATION SHEET AND CONFIRMATION FORM

Your Mortgage

Introduction

Your lender has instructed us to act on its behalf in connection with the mortgage. This is to your advantage because it will be cheaper than paying fees for another Solicitor to act on behalf of the lender. However the arrangement means that you must comply with a number of obligations specified by your lender

Your Obligations as Borrower

By signing the mortgage deed you agree with the lender to undertake certain obligations. The most important of these is to repay the loan in accordance with the terms agreed between you and the lender. The loan is secured against the property so that, if you do not pay, the lender has various rights which include the right to compel you to leave the property and then to sell it. Sales by lenders often realise less than the borrower believes to be the full value. If the debt owed to the lender (including interest and costs) is more than the proceeds of sale you will be liable for the shortfall. If there is more than one borrower the lender can claim against you all or any one of you. Your mortgage is a serious commitment which you should not take on without careful consideration.

Identification

We are required by your lender to certify that we have checked your identity. We will correspond with you separately regarding this.

Valuation

Your lender will probably have arranged for a valuation of your property. Even if you have paid a fee for this valuation and/or have received a copy of it you should not rely upon it in deciding whether to proceed with your purchase of the property. There may be defects in the property which are not revealed by the inspection carried out by the lender’s valuer, and there may be omissions or inaccuracies in the valuer’s report which do not matter to the lender but might matter to you. We recommend you to obtain your own more detailed survey of the condition of the property and a separate valuation of it, based on a full inspection by a qualified surveyor, before deciding whether to proceed with your purchase. If you have received from the lender a copy of the lender’s valuer’s report please send it, or a copy of it, to us.

High Percentage Borrowing

If you are borrowing a high percentage of the value of the property the lender may require additional security to protect the lender if it has to sell the property at a price which does not cover the debt owed to the lender. Some lenders obtain an insurance guarantee against high percentage borrowing, for which a single premium is paid on completion of the mortgage. Other lenders carry the risk themselves but charge you an additional fee for doing so. An insurer who pays up under an insurance guarantee of this kind is entitled to recover the payment from you. Even if there is no insurance you will be liable for the shortfall if the proceeds of realisation of a property are not sufficient to repay the lender (see paragraph 2 above).

Vacant Possession / Letting

If you are buying for your own occupation it is a requirement of your lender that vacant possession is obtained on completion of the property purchased. If you subsequently wish to let the property you must not do so without the lenders consent. Lenders are often willing to agree to lettings being made subject to conditions being met which protect their security. If you are buying the property for the express purpose of letting it, or subject to an existing letting, not only must the letting have been approved in principle by the lender but also we must examine the terms of the tenancy to check that they are not against the lender’s interests.

Title Indemnity Insurance

Sometimes investigation of title to the property reveals that there is a defect, for instance the property may have been extended in breach of a restrictive covenant imposed on it. In these circumstances in the absence of any other remedy your lender requires that we obtain insurance against any risk. The cost of this insurance is met by a single premium which may have to be paid by you. We will not have allowed for this in any quotation or estimate previously given to you. If insurance of this kind is required we will explain it to you and notify you in advance whether you will be liable for the cost and, if so, how much that cost will be.

Property Insurance

It is a requirement of your mortgage that you keep the property adequately insured against the risks required by the lender. If you have arranged that the lender will organise this insurance for you no further action is needed on your part. However if the lender has agreed that you may arrange the insurance there are certain requirements to be met on which we will advise you. Furthermore, of course, you must keep this insurance in force for so long as anything is owed to the lender and such insurance must either be index linked or adjusted annually to reflect the rebuilding cost of the property. In the case of flats or other developments the insurance of which is arranged collectively by a landlord or management company, we will be required to make certain checks and satisfy the lender that the lender’s interests are protected.

Independent Legal Advice

If your mortgage is being guaranteed by someone else or in other circumstances involving third parties, the lender may require that the third party concerned be given independent legal advice. The person concerned is, of course, free to choose such solicitors as he or she chooses for this purpose but in the absence of such a choice we are required to make the necessary arrangements. The solicitors giving the independent legal advice will charge a separate fee for this purpose which has not been provided for in any quotation or estimate given by us. The person seeking the independent advice must pay the solicitor giving that advice directly. If, following completion of the mortgage, someone other than you who is over 17 will be occupying the property (e.g. a child of yours) your lender may require that this person sign a consent form and obtain independent advice on it. In such circumstances the same arrangements as described above will apply.

Payment of Purchase Price

Your lender has instructed us to check how the balance of the purchase price is to be paid. Obviously, if the balance of the purchase money is being provided from a related sale with which we are dealing on your behalf, we will be able to satisfy this requirement without difficulty. In other circumstances we have to ask you where the money is coming from and in particular to satisfy ourselves that you do not intend to provide the balance of the money by any form of second mortgage or charge against the property.

Your lender requires that all payments by you should be through us, and not directly to the seller. Please note that we are expressly forbidden by your lender to use the loan for your purchase unless we have in our possession sufficient funds to pay Stamp Duty and registration fees. We shall also require that any fees invoiced by us to you relating to the purchase or the mortgage are paid to us before completion of the transaction.

Fees and Expenses

It is a condition of your mortgage that any fees or expenses relating to the work carried out by us for your lender are paid by you. We are obliged to give you a realistic quotation or estimate not only in respect of the fees payable by you relating to the purchase but also the fees for our work on behalf of your lender. Please note that quotations or estimates already given in respect of our fees do not take into account additional fees and expenses which may be payable in accordance with paragraphs 7 and 9 of this information sheet. If the transaction does not proceed to completion then we are entitled to charge you a fair fee for the work carried out by us and for any expenses and disbursements incurred. Where you have received a “no move no fee” quotation, then only disbursements will be payable by you.

Retentions

Sometimes a lender holds back money from the loan because works remain to be carried out to the property, to be released once the works have been satisfactorily completed. You must bear in mind that the lender will only release money held back if, at the time when payment of it is required, you have fully complied with your obligations under the mortgage and in particular are up-to-date with all payments.

Title Deeds

The documents relating to your property will comprise a title information document plus miscellaneous other necessary or useful documents (e.g. a National House Builders Council guarantee or copy Planning Permissions). The majority of lenders do not wish to be burdened with storing all the documents relating to your property and therefore insist that we send them only a copy of the title information document. The other documents, however, are probably very important and ought to be kept in a safe place to be available when the property is sold. If these documents are lost or accidentally destroyed you may be put to substantial expense in confirming the information contained in the documents or obtaining duplicates. For this reason it is in your best interests and in the best interests of your lender that the documents are kept in a safe place where they will be readily available when needed..

Paying off the Mortgage

The amount to be paid to the lender in order to pay off your mortgage is basically the mortgage debt plus accumulated interest and/or a penalty for early redemption. However the terms of your loan may entitle your lender to charge extra interest. In addition your lender may charge you an administration fee for dealing with the formalities of redemption of your mortgage.

Conflicts of Interest

Although in many respects the interest of the Buyer and the Lender are the same (in particular they both want the property to be acquired with a good and marketable title) there are circumstances in which a conflict of interest may arise because information comes into our hands which you would prefer us not to tell the Lender, such as:

(a) the price is lower that you told the Lender (because this means that the property is worth less than the Lender thought)
(b) you are receiving a Cash Back or other inducement from the Seller (again because this suggests that the property is worth less than the purchase price)
(c) you have decided to let the property rather than occupy it personally
(d) your financial circumstances have changed – for instance you may have lost your job (because you may not be able to keep up the repayments on a reduced income)

Because we owe you a duty of complete confidence, if a conflict of interest arises we will ask for your permission to disclose the circumstances to the Lender. If you withhold permission we must cease to act any further in the transaction either for you or for the lender and return the Lenders papers advising the Lender that a conflict of interest has arisen. This signifies that something unusual has occurred and the Lender will probably withdraw the Loan Offer.

Access to your file

Both during the transaction and after it has been completed the Lender is entitled to demand access to our file relating to your transaction. This right is restricted to documents relating to your Loan but if you have signed a Waiver Form (as most Lenders demand) the Lender may be entitled to the whole file including letters written by you to us and notes we have taken of meetings or telephone discussions.

Confirmation Form

With this information sheet we have sent you a form for you to complete to give certain confirmations and assurances which your lender requires us to obtain from you. Please note that we are not able to ask the lender for the loan nor to complete the transaction unless we have this confirmation form in our hands signed and fully completed. It is therefore important that you should complete, sign and return the form to us as quickly as you can.

CONFIRMATION FORM

Please read this form through carefully and complete the appropriate box in response to each paragraph. Except for box number 5 below (where the information should be written in) you should simply tick off which box is appropriate. When this has been done the form should be signed, dated and returned to us. If there are two or more persons who are borrowing, then each of them should sign the form. If you are in any doubt at all as to how a box is to be completed please refer to us.

Tick ‘Not Applicable’ if you already own the property to be mortgaged

5. I confirm that the only persons who will occupy the property following completion of the mortgage will be

Tick ‘Not Applicable’ if you already own the property to be mortgaged
Tick ‘Not Applicable’ if you already own the property to be mortgaged

Please provide evidence of funds for b-d if applicable e.g. bank statements.



N.B. All intending borrowers must sign

Sending