Mortgage Covenants explained and further available mortgage help!
A Mortgage Covenant is a promise included within the Title Deeds that will bind one or both parties to undertake or not undertake certain actions.
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This page details the main two types of Mortgage Covenants, a positive covenant, and a restrictive covenant, and provides further information as to how we can help with the provision of a mortgage or remortgage.
Table of Contents:
What is a Mortgage Covenant?
So, a Mortgage Covenant is a promise included within the Title Deeds. The promise within the deeds will bind either the borrower or the lender or indeed both parties to the covenant to undertake or to not undertake certain actions.
The main types of Mortgage Covenant
There are usually two types of Mortgage Covenants involving property transactions:
- Positive Covenant
This is a promise to undertake some form of action. For example, the purchaser within the mortgage deed will promise to make his payments in accordance with the contractual arrangement. - Restrictive Covenant
This type of covenant is a promise not to do something. For instance, the Title Deeds to a property may restrict the borrower from carrying on a business from the property.
A borrower must comply with the terms laid out in a Mortgage Covenant, and if they do not, the contract should clearly set out the penalties for non-compliance, which for example with the Positive Covenant described above would be repossession of the property if the borrower failed to make their mortgage payments.
The Mortgage Covenants will form part of the title deeds, and as such will generally apply to all future owners of the property too.
Mortgage and Remortgage help available from Shire Direct
Hopefully, we've managed to shed a little light and give you some insight into mortgage covenants. If you are looking for a mortgage or remortgage, why not speak to Shire Direct. Our friendly professionally qualified mortgage advisors are available seven days a week from 8am until 10pm on Freephone 08000 282 281, you can also enquire online anytime. We can often help where others can't, even with the trickiest of circumstances! So get in touch, we'd love to hear from you!
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There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
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