What is a mortgage deed?

What is a mortgage deed?

A mortgage deed is a formal, legally binding document that sets out your mortgage contract with your mortgage lender and places a legal charge over the property. It allows the lender to repossess the home if repayments aren’t met.

Your mortgage deed will set out:

• Who’s involved: You (the borrower) and your mortgage lender
• The loan amount and your monthly repayments
• The interest rate and how it can change over time
• When and how repayments must be made
• Any additional terms or conditions specific to the lender

You’ll sign a new mortgage deed not only when buying a home, but also whenever you remortgage and replace your existing loan.

Who issues a mortgage deed?

The mortgage provider, typically a bank or another financial institution, will issue the mortgage deed.

What does a mortgage deed look like?

Mortgage deeds are usually formal documents that contain detailed legal language. They include information about the borrower, the lender, the property being purchased, the loan amount, and the terms of repayment. Some mortgage deeds may also include clauses specific to the lender's requirements.

What is included in a mortgage deed:

• The names and addresses of the borrower(s) and lender
• The property’s address and Land Registry title number
• The loan amount and repayment schedule
• The interest rate and any introductory or follow-on rates
• Standard clauses giving the lender a legal charge over the property
• Any additional conditions specific to your lender

What to do when you receive your mortgage deed

Before you put pen to paper, run through this quick checklist:

• Confirm names, addresses and loan figures are correct
• Read every clause and ask your conveyancer about anything unclear
• Arrange an independent adult to witness your signature
• Keep a copy of the signed deed for your records

Who holds a mortgage deed?

The mortgage deed is held by the lender until the mortgage loan is fully repaid. The lender retains this document as security for the loan they provided to the borrower. The borrower will only be given the mortgage deed once the mortgage has been paid in full, however the borrower should be able to request copies of the deeds at any time.

Is a mortgage deed the same as a mortgage offer?

No, a mortgage deed is not the same as a mortgage offer. A mortgage offer is a document from the lender indicating the lender's willingness to lend the borrower a specified amount under certain conditions. The mortgage deed, on the other hand, is the legal agreement that the borrower signs to accept those terms and secure the loan against the property.

Is a mortgage deed the same as a title deed?

No, a mortgage deed is not the same as a title deed. A mortgage deed is a legal document between a borrower and a lender that secures in writing the loan that is being borrowed, whereas a title deed is a legal document that proves who owns a property, including information regarding the property's ownership history, mortgages, leases, contracts, and wills.

If a homeowner does not have the title deeds to their home, they can contact the Land Registry to obtain a copy.

Why do you need a witness for a mortgage deed?

A mortgage deed needs to be witnessed to make it legally valid and to confirm that everyone involved has signed willingly. This is a legal requirement - without proper witnessing, the deed won't be valid.

Who can be a witness for a mortgage deed?

The witness must be an independent adult who is not a party to the mortgage agreement (i.e., not included on the mortgage, helping the borrower to buy the property, or buying the property with the borrower).

How many witnesses do you need for a mortgage deed?

Typically, borrowers need one witness to sign the mortgage deed.

Do I date the mortgage deed?

Yes, borrowers should date the mortgage deed when they sign it. This date is important as it marks when the agreement was finalised and may be needed for future reference.

What happens after signing a mortgage deed?

After the mortgage deed is signed and witnessed, it is sent back to the lender. They'll then complete their final checks before releasing the funds for your property purchase. Once the funds are released, the property transaction is completed. Remember, the deed is legally binding – the terms can only be changed by taking out a new mortgage and signing a fresh deed.

How long after signing a mortgage deed do you exchange contracts?

The time frame can vary, but typically, you might exchange contracts within a few days to a couple of weeks after signing the mortgage deed. The borrower's solicitor or conveyancer will coordinate this process and keep the borrower informed.

Is a mortgage deed proof of ownership?

No, a mortgage deed itself is not proof of ownership. The mortgage deed is simply the document that secures the loan against your property.