Council grant means 'charge' on property - will this effect remortgaging?

BoBoDobie

I've been accepted for a grant from the council to redo my sofits and facias. As I understand it a charge will be put on the property and if/when I sell it their money is recuperated then.

Question is I'm due to remortgage at the end of August (hoping to switch to a better deal). Should I be better waiting till this is completed before doing the council grant thing? Or won't it make any difference if i do it now?

Thanks

dimbo61

Yes I would and even then the Mortgage lender may say NO
Charge on your home for Soffits and fascias !!!!

BoBoDobie

Ahh can they, didn't realise that! I've a really good LTV rate if that makes any difference.

kingstreet

Are you remortgaging, or asking your current lender for a customer retention product?

If remortgaging, you'll need to ask the council for a deed of postponement, to prevent its charge being promoted to a first charge when your current mortgage is repaid.

If requesting a customer retention product from your existing lender, this is not an issue.

BoBoDobie

Thanks Kingstreet, I've not signed up with the council yet, he's coming round this week to assess the state of them but they are awfully bad so I'm assuming I'll get the go ahead (I've been accepted in principle).

My mortgage ends in August and then L&C shop around for me. Whether that means staying with the Halifax or moving to someone new I'm not sure. So if I remortgage in August for say 2 years, when I remortgage in 2016 I have to pay the charge back then?

kingstreet

No. If you want to remortgage with a second charge over your home, you need to ask the council (the second charge holder) for a deed of postponement, as I said.

This prevents the second charge being promoted to a first charge when the mortgage is repaid by the new mortgage, as without it, the new mortgage cannot be a first charge and the new lender will not accept this.

There is no need for a deed of postponement if you remain with your current lender.

BoBoDobie

Ok thank you for clarifying, I wasn't sure if the deed of postponement would last indefinitely or just cover the next time I remortgage.

Would your advice be to do it now before I remortgage or wait till I've remortgaged (be it with my current lender or if I move)?