As a shared owner
If you are a shared owner, under the terms of your lease you’ll need to ask for our consent to remortgage from time to time – this is because your mortgage lender will require the protection offered by the Mortgage Protection Clause in your lease, which they will only have if we have approved your mortgage offer before they lend as we also have a legal interest in the property.
You do not normally need our consent if you are switching to a new product with your existing lender and you’re not borrowing more or extending the term of your mortgage.
As an outright leaseholder
If you are an outright leaseholder you should not need to get our consent to remortgage as there is not a Mortgage Protection Clause in your lease.
What is the Mortgage Protection Clause
The Mortgage Protection Clause is a standard clause in modern shared ownership leases which protects the lender’s loan to a shared owner. It requires us to notify your lender of any breach of the lease and give them an time to fix the problem before we commence any forfeiture proceedings.
Borrowing additional money
In line with the guidance in the Capital Funding Guide, our policy is that we will not approve any additional borrowing for the purposes below to be covered by the Mortgage Protection Clause:
- Debt consolidation
- Holidays
- Home improvements that are not essential repairs or works required to comply with the leaseholders’ covenants in your lease
If you want to increase the amount of borrowing secured against your home or the term of your mortgage you should speak to us first.
If you want to increase your mortgage to buy additional shares in your home you should refer to the Staircasing section.
Applying for approval of a new mortgage
As long as you are not increasing the amount you’ve borrowed or the term then getting our consent is a very easy process, which you can organise through our Home Ownership Team. If you do want to borrow more in line with our policy, the process is till quite straightforward, but we’ll need a little more information from you about what the additional borrowing is for and we’ll have to check your affordability again.
We’ll ask you to complete the Remortgaging Form below and return this to us with a copy of the Redemption Statement from your current lender and your new mortgage offer. We can then review your mortgage offer to confirm that it’s acceptable to us, and issue the completed Mortgage Approval Form upon receipt of the appropriate administration fee. Your lender or broker will then need to arrange to complete your new mortgage and send us a Notice of Charge.
Adding or removing other leaseholders
You can add or remove other leaseholders as part of a remortgaging transaction, but as part of your application we may need to undertake some additional checks. If you want to do this, you should speak to us first to make sure you understand what we will need to do.
If you want to add someone to your lease we’ll need to see a copy of their ID and some information from them to set them up as a new leaseholder.
If you want to remove someone from your lease we’ll need to know how the departing person will be ‘bought out’ of their share (which could be done by increasing the mortgage if that’s affordable), and we’ll ask the remaining leaseholder(s) to complete an affordability check if we can’t obtain the information from your broker.
