What is a mortgage deed?

What is the purpose of a mortgage deed?

A mortgage deed, also known as a deed of trust, is a legal document that formalises your agreement with your mortgage lender. It essentially secures the loan against the property you're purchasing. This means that if you fail to make your mortgage payments, the lender has the right to take possession of the property to recover the loan amount.

The mortgage deed will establish the parties involved, including their names and addresses, as well as the specific sum of money that the borrower is to pay to the lender as a mortgage loan, how repayments are to be made, the rate of interest and the terms of 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. hey will only be given to you once the mortgage has been paid in full, but 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.

Why does a mortgage deed need to be witnessed?

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.

How many witnesses do you need for a mortgage deed?

Typically, you need one witness to sign the mortgage deed. The witness must be an independent adult who is not a party to the mortgage agreement.

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. 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.