Home > Housing Contracts > What is a Mortgage Contract?

What is a Mortgage Contract?

By: Garry Crystal - Updated: 14 Dec 2018 | comments*Discuss
 
Mortgage Contracts Property Purchase

Mortgage contracts are regarded as perhaps the most important contracts in a person’s life next to a marriage contract. As these contracts are important, and large sums of money are being exchanged, it is vital that a solicitor or lawyer draws up the mortgage contract. Mortgage contracts are one of the very few circumstances where the details must be written down in a legally binding contract.

Basic Mortgage Contracts

When you enter into a mortgage contract you are basically dealing with a variety of different parties. A financial lending institution such as a bank or building society that will be lending you the money to buy a property. A solicitor who will be dealing with the sale and the party that is selling the property.

You may not actually deal with the selling party as this will usually be processed through estate agents and solicitors. However, the exchange of contracts will be one of the most important parts of the process, and a solicitor will be needed to complete the transaction.

Terms and Conditions

The terms and conditions of most mortgage contracts will vary depending on the type of mortgage, the interest rates and any mortgage insurance policies. They will also differ in regards to deposits and fees, and the type of properties being purchased. For instance, council buy-to-let properties have certain conditions and waiting periods set into the contract before the buyer can sell.

Mortgage contracts are regulated by the Financial Services Authority (FSA). The regulations are set in place for the protection of the consumer to ensure that they are treated fairly by financial institutions. The FSA is a government body and sets the standards that financial institutions must adhere to.

The Basic Process

The process involved in the buying of property and mortgages is that the buyer will decide on the property they want to buy and then fill out a mortgage application form. Once all financial checks on the buyer have been made, and if they are satisfactory, and property valuations are also approved then the buyer will receive the mortgage offer.

The Mortgage Offer

The mortgage offer will come in the form of an official document that sets out the agreement between the lender and the buyer. A solicitor can look over all of the terms and conditions of the mortgage offer and then if they are agreeable the buyer will sign the offer and return it to the lender. The funds will then be ready for release when the time comes to purchase the property.

The Conveyance Process

Conveyancing is a legal process that will begin once the mortgage offer is in place. The solicitor will begin to investigate the property and make sure that the person selling the property is legally entitled to do so. If everything is in order then a contract will be drawn up to enable the buyer to purchase the property at the price that was agreed and with all details intact including details on fittings and the like. Included in the contract will be the completion date; this is the date from when the property will legally belong to the buyer.

Completing the Deal

A solicitor will be the one that ensures that the mortgage contract and the purchase funds and any deposits are in place in time for the completion date. Stamp duty may or may not also be required depending on the price of the property. Again, the solicitor will be the one that deals with any stamp duty procedures.

Anyone that is considering entering into a mortgage contract should ensure that they take expert financial advice. First time buyers need to be aware of the penalties for missing mortgage payments, and also their rights regarding eviction and repossession. Never sign any contract until 100% sure that the mortgage payments can be met, and that all the terms and conditions of the contract are fully understood.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
If a Mortgage Company sells its Mortgage Book to another Company, is the original Agreement legally binding?
Tommy - 14-Dec-18 @ 1:04 AM
If a mortgage does not include a month and year only a date does that make it legally binding?
margaret - 30-Jan-17 @ 11:05 PM
i like reading this is very interesting
angie - 14-Jun-16 @ 2:46 PM
Can the bank use my house deeds on a personal loand with out my permission
Martin Woodruffe - 10-Nov-14 @ 1:05 PM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Latest Comments
  • Bikerboy700
    Re: The Law & Verbal Agreements
    A company called search point called me to renew a contract for google search adds. They kept calling and harassing me to…
    15 March 2024
  • Haris
    Re: Marriage Contracts
    will you marry me in my contact I m sengle my whatssap numbr +92 03110331553
    11 February 2024
  • Haris
    Re: Marriage Contracts
    I want to see marrie in my contact i am single whatssap number +92 03110331553
    11 February 2024
  • Avinchi
    Re: Marriage Contracts
    IGNORE COMMENTS! ((((ALL INDIANS SEE)))) Property Rights Under the law of marriage contracts a spouse has the right to live in the…
    22 October 2023
  • Judge Judy
    Re: Marriage Contracts
    Regarding the comments please ignore them (SCAM) Just marry me im a judge, 07538577290. Male - 28 Single.
    22 October 2023
  • Deb
    Re: Contracts and Self Employment
    I am self employed and have a contract my contract states my name and the word "employee" in every section. It has headings…
    28 September 2023
  • DEEP DHALI
    Re: Marriage Contracts
    Hi my name is DEEP KUMAR DHALI and I am from India my age was 21 years old any body have from uk women how i marry you please contact me in…
    15 August 2023
  • Yasin
    Re: Marriage Contracts
    I'm Pakistani my age 26 i need a gril in UK with contract marriage but I am very poor people My WhatsApp+923052150964
    13 July 2023
  • Chris
    Re: Broken Employment Contracts
    I am self-employed I run a sole trade business I received an order from a client to perform a service work We signed a written…
    4 April 2023
  • Junayed
    Re: Marriage Contracts
    I am Junayed and am From Bangladesh My WhatsApp 88012918210
    29 March 2023