Mortgage Offer - The Conditions

LawAbiding

Hi,

As part of my mortgage application I declared I would be paying off my debts using the equity released from my sale with the remaining going towards deposit.

The mortgage offer from Aldermore specifically says this:

"You have stated your intention to repay some or all of your existing credit commitments
and this has been taken into account when assessing affordability for your new mortgage. The outstanding balance(s) with the
companies listed below must be repaid on or before completion of this mortgage and your Conveyancer must obtain a signed
declaration and undertaking from you to that effect. Failure to repay the existing credit commitments could affect your ability
to meet your mortgage payments. Note that if you are repaying borrowing of this type with a mortgage you will be converting
loans that are unsecured into debt secured on your property, which could result in your property being at risk in the event of
non-payment"

And then lists the debts in question.

The money to pay is from the sale which I assume will not be available until completion day? So how can these be paid on or before completion date?

Confused. Com

amnblog

Aldermore have no practical way of checking if you meet this condition as on the day they need to release the funds.

Therefore they put the responsibility on you and your Solicitor to clear the debts.

Most Solicitors take a sensible view and simply make you aware of your responsibilities leaving it to you to clear the debt swiftly.

Occasionally we see a Solicitor who can get picky about these conditions and insist on evidencing repayment.

davidmcn

LawAbiding wrote: »

The money to pay is from the sale which I assume will not be available until completion day? So how can these be paid on or before completion date?

By using the money you get on completion. They just mean they want you to do it immediately afterwards.

LawAbiding

amnblog wrote: »

Aldermore have no practical way of checking if you meet this condition as on the day they need to release the funds.

Therefore they put the responsibility on you and your Solicitor to clear the debts.

Most Solicitors take a sensible view and simply make you aware of your responsibilities leaving it to you to clear the debt swiftly.

Occasionally we see a Solicitor who can get picky about these conditions and insist on evidencing repayment.

Thanks for the insight, we shall see if my Solicitor is picky or not

davidmcn wrote: »

By using the money you get on completion. They just mean they want you to do it immediately afterwards.

Ok, it just threw me when it says "on or before completion", on completion day, if the money is in my bank, I can make the payments the same day, literally will take around 10 mins. Just that these won't clear for a few days after.

davidmcn

LawAbiding wrote: »

Ok, it just threw me when it says "on or before completion", on completion day, if the money is in my bank, I can make the payments the same day, literally will take around 10 mins. Just that these won't clear for a few days after.

It's the same principle as the other stuff which has to happen theoretically simultaneously at completion, but doesn't necessarily e.g. the seller redeems their mortgage account using the money they get from you, but in reality their solicitor may well not manage to do the bank transfer until the next working day.

LawAbiding

davidmcn wrote: »

It's the same principle as the other stuff which has to happen theoretically simultaneously at completion, but doesn't necessarily e.g. the seller redeems their mortgage account using the money they get from you, but in reality their solicitor may well not manage to do the bank transfer until the next working day.

Ah that does make sense, I guess everyone involved has to Trust primarly the Solicitors to get everything done.

One of the debts to be repaid is a loan, which I did not actually declare I would repay and would prefer it to continue. I will of course get it paid as its defined as a condition, but I guess after completion, there will be no harm in applying for another loan in place of it?