Repaying a Shared Equity Loan.

JG88

Hello!

I hope this is in the right area!

I need some advice regarding repaying an Equity loan on our house. We bought our new build house five years ago from Bloor. At the time they offered a shared equity scheme where we essentially borrowed 20% of the value in order to get a better interest rate (we didn't have more than a 5% deposit). (this isn't a government scheme but a private one).

Our fixed rate mortgage recently came to an end so we decided to try an borrow the extra to repay the equity loan while rates are low. We have agreed an amount with the builder and have all the details of how to pay this back once we get approval but we don't seem to have any consistent advice on whether we need to do this using a solicitor. We have neighbours that recently re-paid a similar loan back to Bloor that did it without a solicitor and appear to have had no problems. Our mortgage adviser has, however, recommended a solicitor should be involved.

I have had a quote from the solicitor we used when we originally made the purchase at over £1000 which seems very steep. Looking at other quotes the best we can hope for is around £500 in fees. Obviously we don't wish to spend this if we don't need to but would love your advice! Any ideas?

From the details we have from the purchase there is nothing stating the need for a solicitor when re-paying, there is however the statement that the builder has a 'Second Legal Charge' on the property while the loan is outstanding. Hopefully this additional information helps.

Many Thanks!

kingstreet

Without a solicitor, you are trusting the builder to correctly remove the second charge.

There are other solicitors. Establish if the cost quoted is reasonable across a number of different firms.

Does your mortgage lender require use of a solicitor?

andymd

We recently paid off the second charge on our property, also with Bloor. We paid money into their accounts (bank transfer) and a couple of weeks later received a copy of the land register confirming the charge had been removed, it was really easy.

We didn't use solicitors, but we paid cash rather getting an extension on our Mortgage, not sure if this makes any difference.

I've always found Bloor to be very professional and trustworthy so I had no concerns about sending them the money directly. I sent a £5 payment initially and got them to confirm they had received it, that way I knew the details were set up correctly in my online banking before making the full payment.

£500 is a lot for legal fees for something relatively straightforward.

JG88

Thanks for the speedy replies!

The process for our mortgage extension is on-going but as far as I'm aware the provider hasn't asked for a solicitor to be involved. I believe that once approved the funds will be directly transferred to myself. I will need to confirm this of course once we are approved.

Andymd. It's great to hear you have been through the same process with no problems. Speaking to Bloor when we first made the request it sounded like it would be as simple as that. I am cautious in nature which is why I'm seeking as much advice as possible. The £5 test is a great tip though, thank you.

rhianne1434

Hi,

We purchased our bloor home just over 2 years ago and are looking to pay back the % we borrowed soon.
Our loan was on a % of the house and the agreement was that when we were ready to pay the money back, it would be the same % of the house, regardless of value.
Is this the same scheme as yours?

If so...
As you guys have been through it, can you confirm how you went about it please? I remember there was mention of getting the house valued etc, it would be nice to know costs involved so we're ready for it.

Thanks