Mortgage Query

[CYNthesys]

Can anyone clarify this please.
If a mortgagor pays off an existing legal charge with increased funding from the same lender would the original charge/deed cover the further borrowings, or would a new legal charge have to be executed?

[CYNthesys]

Re: Mortgage Query

to put it another way - if a replacement mortgage is taken out as a condition of discharging an earlier mortgage, would a new deed have to be executed or could the lender continue to rely on and use as security the mortgage deed that had already been discharged

[des8]

Re: Mortgage Query

I believe that if you are remortgaging with the same mortgagor but using a different product a deed of variation will be required, which would indicate the original deed can still be relied on.

[CYNthesys]

Re: Mortgage Query

Land Registry Practice Guide 29 says-
8 Application to note agreed maximum amount of security

Under r.109, LRR 2003, you may make an application to note in the register an agreement for the maximum amount secured by a charge.
Even if such an amount is stated in the charge itself, irrespective of whether or not the charge has been previously approved by us, or in a subsequent deed of variation, you must make an application to note the maximum amount in form CH3.
http://www.landregistry.gov.uk/profe...ctice-guide-29

So if an original mortgage was paid off by a replacement mortgage (for a larger amount) and there was no deed of variation what would the borrowers position be if the original mortgage for xx amount was all that was recorded in the Land Register?

[Streetwise]

Re: Mortgage Query

Land Registry Practice Guide 29 says-
8 Application to note agreed maximum amount of security

Under r.109, LRR 2003, you may make an application to note in the register an agreement for the maximum amount secured by a charge.
Even if such an amount is stated in the charge itself, irrespective of whether or not the charge has been previously approved by us, or in a subsequent deed of variation, you must make an application to note the maximum amount in form CH3.
http://www.landregistry.gov.uk/profe...ctice-guide-29

So if an original mortgage was paid off by a replacement mortgage (for a larger amount) and there was no deed of variation what would the borrowers position be if the original mortgage for xx amount was all that was recorded in the Land Register?

BUMP.

[CYNthesys]

Re: Mortgage Query

BUMP
This is urgent if anyone can clarify pleeeeeeeze

[CYNthesys]

Re: Mortgage Query

These may sound like stupid questions, but here goes-

1. Is a commercial loan agreement that is supported by a legal charge a personal guarantee?

2. Can personal guarantees go by different names, eg an agreement, or is there a specific requirement that it should be headed as a PG

[des8]

Re: Mortgage Query

My understanding is a commercial loan secured by a charge on a (domestic?) property is just that, not a personal guarantee.

Personal guarantees are not necessarily so headed. They could just be called agreements. It is their content which is important.

[CYNthesys]

Re: Mortgage Query

Thanks DES
Where you say "It is their content which is important"
Do you know what the contents of PGs are required to specifically include?

As a side note my late husbands PG was the security for borrowings, but a legal charge was executed to support the PG

[des8]

Re: Mortgage Query

It is not unusual for a PG to be backed up by a charge on the guarantor's home.

PG's are often individually drawn up, but I suspect this was a standard form used by a bank/finance house, in which case it is unlikely (but not impossible) to challenge it on the basis of its content.

The trouble with PGs from the guarantor's viewpoint is they are (unless limited) open ended blank cheques.