Frequently Asked Questions
There’s no used denying it; property law can be a complicated little blighter! Alas fear not, Goldsmith Williams - the legal property boffins - are here to shed some light on the matter.
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This depends on a number of factors including:
- The number of parties in the chain
- Somebody in the chain does not want to proceed as quickly as the others
- The complexity of the transaction e.g. it will take longer if the property is leasehold
- The searches or enquiries reveal something unexpected.
A standard freehold purchase will normally take 4 – 6 weeks but if title problems arise or there is a long chain it could take longer.
It is best to avoid booking your removals until after contracts have been exchanged. At that time removal arrangements can be confirmed to the company. Before exchange the moving date is not definite and you may incur extra charges should the date have to be changed.
No. The electronic banking system only works Monday - Fridays. In addition most law firms do not work on a Saturday. Therefore your completion has to take place between Monday-Friday.
The deposit will depend upon the mortgage. If you are borrowing less than 90% then you will usually pay 10% but if you are borrowing more than 90% the seller may be willing to accept a lower deposit.
You should not cancel direct debits until you have been advised by us that completion of the sale has taken place. If you have made any overpayment the lender will refund this to you following completion.
They should be left with the estate agents. They will only release the keys to the buyer once completion has taken place. If there are no estate agents you should arrange to give the buyer the keys direct.
Please do not hand the keys over until you have received confirmation that we have received the purchase monies.
Please make your own arrangements with the estate agents as they will normally hold the keys. If there are no estate agents you should arrange to collect the keys from the seller.
Yes, you will still need the services of a professional conveyancer.
These give buyers and sellers A-G ratings for their home’s energy efficiency to help cut carbon emissions and fuel bills and are designed to help homeowners reduce the environmental impact of their homes.
Each mortgage lender is different and once contracts have been exchanged and you know the completion date you should contact your mortgage lender to ask when the first payment is due to be taken from your account. You should be aware that because of the way in which the interest is calculated if you complete mid month your first payment may be slightly higher than normal.
If you are getting a mortgage to help you buy your property your lender will have obtained a valuation survey on the property. Unless you instructed them to carry out a homebuyer's or intermediate report at the same time the survey carried out was purely for your lender's needs and will not give you any details about the state and condition of the property.
There may be defects or faults in the property which are not revealed by the inspection carried out by the lender's valuer, or there may be things missing from, or things not accurate in the report. These do not matter to the lender but they may matter to you.
This is when your sale and/or purchase becomes legally binding. Once you have authorised us to exchange contracts we conduct a short telephone conversation with the other party's solicitor, agree a completion date and pay your deposit. If you withdraw from the transaction after exchange, you will lose your deposit and may incur other financial penalties.
Completion signals the end of the transaction and the point at which you finally take possession of the property. Your solicitor will pay off your mortgage (if you are also selling a property), pay any stamp duty due and register the property in your name.
Stamp duty is payable on completion of your purchase. We will send the signed Land Transaction Return to the Inland Revenue together with a cheque for the stamp duty.
A remortgage is the process of paying off one mortgage with the proceeds of a new mortgage, using the same property as security.
Your mortgage with your existing lender must be paid right up to the agreed completion date and your lender will provide us with the figure required to redeem your mortgage up to the time of completion. You should not cancel your mortgage payments until we have confirmed this to you.
If any overpayments are made to your existing lender these will be refunded to you direct from the lender into your account or via cheque or via ourselves from your lender.
Occasionally stamp duty is payable, even though you are only remortgaging the property. This is normally when a transfer of the property title is also taking place as part of the remortgage transaction.
You may wish to repay the second charge as part of the remortgage process. Alternatively, you may wish to postpone the second charge so the new lender will have the first charge on the property and the second charge will remain as a second charge sitting after the new loan.
The interest rate on short term loans is generally higher than that of long term loans because short term finance is provided to meet a particular short term need, and a bridging lender does not enjoy the benefit of receiving interest for long term use of its money. The bridging lender is also offering a bespoke service and has to operate at speeds and levels of service which the longer term lenders cannot match. The costs incurred by bridging lenders therefore tend to be higher than those of long term lenders in order to provide the service required.
There are three basic methods which bridging lenders use for borrowers to pay the interest due on the loan: paying monthly, retained interest and rolled up interest.
Paying monthly is, as it suggests, where you pay the interest due each month.
Retained interest is where you borrow the interest payments due on the loan in addition to the loan amount you require. The extra amount is held by the lender (retained) and used to meet your monthly payments. You may be required to pay interest on the amount of interest payments retained.
Rolled up interest works by adding the interest due each month to the loan balance. Interest is calculated each month based on the balance then outstanding i.e. interest on the interest.
There are various combinations of these approaches available in the market. Some lenders offer the opportunity to retain interest for only part of the loan e.g. six months of a nine month loan. This approach is sometimes used when a borrower believes he will definitely be able to repay the loan within, say, six months but wants the flexibility of having a bit longer if need be. The borrower will, however, need to make sure they can make the payments for the other three months if they cannot repay after the retained period ends.
Generally the loan will need to be repaid by a set date i.e. the term. This is often referred to as redemption.
It is your responsibility to make sure you can repay the loan on or before the end of the term. You should only enter into the transaction if you are confident that you will be able to achieve this. Remember failure to do so can result in action being taken against you, further costs and fees being added to your loan and, as a last resort, repossession of the property.
Typically loans are repaid either by the sale of the property the loan is secured against or refinancing the loan with another lender. It is important to consider the risk that you may not be able to achieve your planned exit (redemption) in the required timescale before committing to the agreement.
Sometimes things do not go according to plan and you may find yourself in a position of not being able to repay your loan at the agreed time. The important thing is to contact your mortgage lender as soon as possible to discuss your position.
Lenders will generally look to reach sensible arrangements with you and extend your loan term unless there are specific reasons why they cannot extend on your particular circumstances. You should be aware that there may be additional costs and charges incurred if you do not repay on time. Many Bridging lenders charge fees for extending the term or for failure to repay on time. It is therefore possible that the lender may also increase the interest rate when this occurs.
It is possible to have more than one mortgage on a property. The later, second mortgage is often referred to as second charge or secured loan lending.
The charge is still a mortgage and should not be treated differently. A charge will be referred to as a first charge (your first mortgage), second charge (your additional mortgage), third charge (a third mortgage) etc. The number of the charge i.e. first, second etc. generally determines the order in which the lenders have the right to any money from the sale of the property. There may be circumstances where this is changed due to deeds of postponement where one lender agrees to postpone the priority of their charge in favour of a ‘later’ charge by another lender.
This does not change the fact that you will still owe the lender the money and they can still seek repossession or hold you personally accountable for any shortfall if the property is sold for less than you owe.
Some lenders restrict the right of a borrower to have a further mortgage and so it may not be possible to obtain a second or third charge mortgage even where there is sufficient equity in the property without your first mortgagee’s consent.
Sometimes a person may want a loan but their partner does not. One person may pressurise the other to take the loan. Lending companies do not want to lend when this happens.
You have the right to cancel your loan application up until the time we request the funds from the lenders. However if we have already given an undertaking to meet the lender’s solicitor’s fees, these will still be payable whether or not completion takes place.
Some lenders do include facility fees which are payable whether or not you proceed with finance. Check the terms of your facility very carefully before signing and returning it as at this stage you are committed. Cancelling before this may mean that you are liable for fees that have not yet been paid such as solicitor’s fees and any other fees you have agreed to.
Wonderful, prompt, courteous, efficient service from start to finish. Off the scale compared to my previous experience with solicitors. Thank You
Mrs Stephen-Martin - 10/10 - Equity Release