Editor's Blog2 mins ago
Charge on Property against a personal loan
5 Answers
Several years ago I transferred a large amount of money from my bank to my Son's bank to look after for me in the event anything happening to me. He has since lost his job and having a family and mortgage to pay I gave him permission to draw from the money on the understanding that it would be paid back. However he has now asked me to take out a charge on the property against the amount I gave him. How do I proceed with this as an OAP I am not au fait with this type of procedure. Many thanks to those who will be able to advise me.
Answers
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Do you mean that, rather than now pay back what he borrowed, in cash, he wants you to take a charge on his house for it instead, so that what you have lent him becomes secured against his house ? The idea being, that if the worst came to the worst, the house would be sold and, out of the proceeds, you and the holders of the mortgage he already has would be paid off?
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21:44 Sat 16th Jan 2010
I don't understand this. If you, as householder, were to take out a loan in your own name the loan company could apply for a charging order to be added to the Title Deeds of your house.
If you reneged on the debt and didn't pay, the loan company could then apply to the court for an Order of Sale so they got their money back from the sale of the property,
Or if you decided to sell up and do a runner, the loan company would get their money from the proceeds of the sale.
Really, you should be applying for a charging order on HIS property.
If you reneged on the debt and didn't pay, the loan company could then apply to the court for an Order of Sale so they got their money back from the sale of the property,
Or if you decided to sell up and do a runner, the loan company would get their money from the proceeds of the sale.
Really, you should be applying for a charging order on HIS property.
Do you mean that, rather than now pay back what he borrowed, in cash, he wants you to take a charge on his house for it instead, so that what you have lent him becomes secured against his house ? The idea being, that if the worst came to the worst, the house would be sold and, out of the proceeds, you and the holders of the mortgage he already has would be paid off?
If that happened the debt to the existing mortgagor would be paid in full first.Your money would come out of what is left.
It shouldn't be difficult, 'on paper' or in legal terms, but you must go to a solicitor to do it, with a note of what is owed and what terms as to repayments and interest you requireThe charge will have to be registered on the title of the property..I can see practical difficulties if you want your loan back at any time or he's faling to make repayments of the loan or interest to you.The existing mortgagor could be happy with what they are getting and their mortgage may not be due to be paid off for many years from now; it may have many years to run. At best, the holder of a later mortgage who tries to foreclose,if he can, has to pay off all the earlier mortgagors first (he has to 'foreclose up' ).The solicitor will advise you of the practicalities, possibility, and consequences.The existing, earlier, mortgagor always has important rights in such matters, to protect him and his security .
If that happened the debt to the existing mortgagor would be paid in full first.Your money would come out of what is left.
It shouldn't be difficult, 'on paper' or in legal terms, but you must go to a solicitor to do it, with a note of what is owed and what terms as to repayments and interest you requireThe charge will have to be registered on the title of the property..I can see practical difficulties if you want your loan back at any time or he's faling to make repayments of the loan or interest to you.The existing mortgagor could be happy with what they are getting and their mortgage may not be due to be paid off for many years from now; it may have many years to run. At best, the holder of a later mortgage who tries to foreclose,if he can, has to pay off all the earlier mortgagors first (he has to 'foreclose up' ).The solicitor will advise you of the practicalities, possibility, and consequences.The existing, earlier, mortgagor always has important rights in such matters, to protect him and his security .
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