What is a mortgage deed?
Buying your first home is a significant milestone, but the process can be overwhelming, especially with all the legal and mortgage jargon. One term you'll encounter is "mortgage deed." But what exactly is a mortgage deed, and why is it important?
In this guide
- What is a mortgage deed?
- Who issues the mortgage deed?
- What do mortgage deeds look like?
- Who holds the mortgage deed?
- Is a mortgage deed a mortgage offer?
- Is a mortgage deed the same as a house deed?
- Why do you need a witness for a mortgage deed?
- Who can be a witness for a mortgage deed?
- How many witnesses do you need for a mortgage deed?
- Do I date the mortgage deed?
- What happens after a mortgage deed is signed?
- How long after signing a mortgage deed do you exchange contracts?
- Is a mortgage deed proof of ownership?
What is a mortgage deed?
A mortgage deed, also known as a deed of trust, is a legal document that formalises your mortgage agreement with your mortgage lender. It essentially secures the loan against the property you're purchasing - meaning that if you fail to make your mortgage payments on time and in full, the lender has the right to take possession of the property to recover the loan amount.
The mortgage deed will establish the parties involved (i.e., you as the buyer of the property and your mortgage lender), the specific sum of money that you as the borrower are paying to the lender each month to repay your mortgage loan, as well as how repayments are to be made, the rate of interest and the terms and conditions of the payment.
Who issues the mortgage deed?
Your mortgage provider, typically a bank or another financial institution, will issue the mortgage deed.
What do mortgage deeds look like?
Mortgage deeds are usually formal documents that contain detailed legal language. They include information about the borrower, the lender, the property being purchased, the loan amount, and the terms of repayment. Some mortgage deeds may also include clauses specific to the lender's requirements.
Who holds the mortgage deed?
The mortgage deed is held by the lender until the mortgage loan is fully repaid. The lender retains this document as security for the loan they provided to you. You'll only be given your mortgage deed once the mortgage has been paid in full, however you should be able to request copies of the deeds at any time.
Is a mortgage deed a mortgage offer?
No, a mortgage deed is not the same as a mortgage offer. A mortgage offer is a document from the lender indicating their willingness to lend you a specified amount under certain conditions. The mortgage deed, on the other hand, is the legal agreement that you sign to accept those terms and secure the loan against your property.
Is a mortgage deed the same as a house deed?
No, a mortgage deed is not the same as a house deed. A mortgage deed is a legal document between a borrower and a lender that secures in writing the loan that is being borrower, whereas a house deed is a legal document that proves who owns a property, including information regarding the property's ownership history, mortgages, leases, contracts, and wills).
However, a house deed is the same as a title deed. The title deed to the property serves as proof of ownership. If you haven't got the title deeds to your home, contact the Land Registry to get a copy.
Looking for the perfect mortgage deal for you?
There’s thousands of mortgages out there, it can be difficult to know which one is best for you. Our smart technology does the thinking for you - we compare your eligibility to over 100 lenders and budget-boosting schemes to generate a personalised mortgage recommendation. For free!
Why do you need a witness for a mortgage deed?
A mortgage deed needs to be witnessed to ensure its validity and to confirm that the parties involved have signed willingly. This is a legal requirement, and failing to have the deed properly witnessed can make it invalid.
Who can be a witness for a mortgage deed?
The witness must be an independent adult who is not a party to the mortgage agreement (i.e., not included on the mortgage, helping you to buy the property, or buying the property with you).
How many witnesses do you need for a mortgage deed?
Typically, you need one witness to sign the mortgage deed.
Do I date the mortgage deed?
Yes, you should date the mortgage deed when you sign it. This date is important as it indicates when the agreement was finalised and can be referenced in future legal or financial matters.
What happens after a mortgage deed is signed?
After the mortgage deed is signed and witnessed, it is sent back to the lender. They will then carry out any remaining checks before releasing the funds for your property purchase. Once the funds are released, the property transaction is completed.
How long after signing a mortgage deed do you exchange contracts?
The time frame can vary, but typically, you might exchange contracts within a few days to a couple of weeks after signing the mortgage deed. Your solicitor or conveyancer will coordinate this process and keep you informed.
Is a mortgage deed proof of ownership?
No, a mortgage deed itself is not proof of ownership. The mortgage deed is simply the document that secures the loan against your property.
Ready to take the next step in your home-buying journey?
If you're ready to apply for a mortgage, now is the perfect time to create a Tembo recommendation. We'll compare your eligibility to thousands of mortgage products in a matter of minutes to find the best deal for you, including ways to increase your buying power. Then, one of our award-winning mortgage advisors will be on hand from your first call to getting your keys.
