Remortgage with a charge

Sevey

We are trying to remortgage, but the lenders solicitor has informed us there is a second charge on the property.

The second charge is from the builder who agreed to loan us 20% of the deposit interest free for 5 years. We are still within our 5 years interest free period, but would like a better mortgage interest rate.

The solicitor has said that they can get all the details for a cost. What information do we need to provide from the builder to the solicitor, so we can avoid the extra cost?

kingstreet

You need the builder to provide a deed of postponement to keep their second charge as a second charge.

If you do not obtain this, when the existing mortgage is repaid, the current second charge is promoted to first charge and the new mortgage lender will not accept second charge status.

The only alternative is to remortgage and borrow enough to repay the second charge at the same time as the existing mortgage.