Paying off chf mortgage before deeds available

[Cobweb]

We are in a position to repay our CHF mortgage with BoC as the repayments were becoming unaffordable. We haven't received our deeds yet (the latest word from the developers is June this year but we're sceptical as we've been told every year since 2011 that they should be ready soon!).
Our worry is that the developers are struggling financially so what would happen if we repaid our mortgage now but the developers go bust before we get the deeds? I believe the developers give some sort of guarantee to the bank - is that just to protect the bank's interest until the deeds are ready?
Would we be better off to still leave a small amount on the mortgage until the deeds materialise?

[Nigel Howarth]

Hi Cobweb and welcome to the forum

Currently we do not know what would happen if you repaid your mortgage but the developer went bust before you got the deeds. I suggest that you leave a small amount on the mortgage until the deeds are available for transfer.

But make sure you pay off the balance of the mortgage before the transfer takes place otherwise the Land Registry will charge you 1% of the sum advanced to register the mortgage against the title.

We should know soon how this problem will be resolved - parliament will be discussing the insolvency framework on Thursday

Regards,

[Cobweb]

Thanks for the quick reply Nigel. How would we know when the deeds are available for transfer (and is that transfer from the Land Registry to the developers or from the developers to us)?

We don't fully understand the process for issuing the deeds, as far as we knew the Land Registry issue them to the developers, who we then have to pay to get them released. If what we've been told is correct, and the deeds will be ready in June are we too late to stop the Land Registry registering the mortgage against them?

We have been told that we should get confirmation from the bank that the developers don't have a mortgage against thr property/land - is that correct?

Sorry to ask so many questions!

[Nigel Howarth]

Hi cobweb

The developer will advise you when the deeds are ready for transfer - and the transfer is from the developer to you.

At the time of the transfer you will have to pay the Property Transfer Fees to the Land Registry (this is the local equivalent to the Stamp Duty Land Tax (SDLT) that you pay in the UK).

Your mortgage can only be registered against the deed once you have paid the Property Transfer Fees - so as long as you pay it off before the transfer takes place you'll be OK.

It's a good idea to check whether the developer has a mortgage against the property. To get this you'll need to get a Title Search from the Land Registry - for a guide and forms see New title search procedures - it will cost you around €20.

Regards,

[Cobweb]

Thank you so much Nigel that's extemely useful . One last question - what sort of small amount do you suggest leaving on the mortgage (percentage wise)?

[Nigel Howarth]

what sort of small amount do you suggest leaving on the mortgage (percentage wise)?

The smallest amount the bank will allow you.

Regards,