Mortgages and liens query
Discussion
Hi all,
Hoping someone could help with the below:
Re private finance for a property development. If you are borrowing money from someone/a private finance company. If its for a 12 month project/investment (and upon the projects completion the loan will be paid back).If they want to secure it against as a 2nd charge/lien against your property, how does that work?
- Do you have to tell your mortgage company?
- I take it it’s a simple CH1 form to register a legal charge against a registered estate?
- Can you register the CH1 form yourself or does your bank or lawyer do this?
- Is it easier to register against your principal property or a BTL property?
- And upon completion the lien is removed?
- What sort of other legal docs are required apart from the loan agreement itself?
- Anything to watch out for?
Many thanks!
Hoping someone could help with the below:
Re private finance for a property development. If you are borrowing money from someone/a private finance company. If its for a 12 month project/investment (and upon the projects completion the loan will be paid back).If they want to secure it against as a 2nd charge/lien against your property, how does that work?
- Do you have to tell your mortgage company?
- I take it it’s a simple CH1 form to register a legal charge against a registered estate?
- Can you register the CH1 form yourself or does your bank or lawyer do this?
- Is it easier to register against your principal property or a BTL property?
- And upon completion the lien is removed?
- What sort of other legal docs are required apart from the loan agreement itself?
- Anything to watch out for?
Many thanks!
It's a mortgage (or legal charge) that you're talking about. A lien is something different entirely.
Dunno about the mechanics as I'm not a property lawyer but I can say with a almost certainty that it's not something that the lender will let you do yourself. They will want it done by a solicitor they instruct (and which they will probably expect you to pay for) to ensure that their position is protected, that the charge is property registered and so forth.
Whether or not you need to tell your current lender will depend on what your current mortgage says but I wouldn't expect there to be any need to - the second charge will rank behind the existing first charge and so the second charge holder would only get paid on a sale after the first charge had been completely paid off and redeemed.
Dunno about the mechanics as I'm not a property lawyer but I can say with a almost certainty that it's not something that the lender will let you do yourself. They will want it done by a solicitor they instruct (and which they will probably expect you to pay for) to ensure that their position is protected, that the charge is property registered and so forth.
Whether or not you need to tell your current lender will depend on what your current mortgage says but I wouldn't expect there to be any need to - the second charge will rank behind the existing first charge and so the second charge holder would only get paid on a sale after the first charge had been completely paid off and redeemed.
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