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Private Mortgages

Do I need to care about standard charge terms?

Do I need to care about standard charge terms? 150 150 Jiang Hong Wilkin Business Law

A mortgage transaction has several important documents. The first is the commitment letter, it is like a term sheet, setting out all the main terms of the mortgage, including the principal amount, interest rate, maturity date, etc. Parties must clearly understand each of the terms of the commitment letter. The second document is the charge, the formal mortgage document which will be registered on title at the land registry office. The terms of the charge should be carefully examined, to see if they match the terms in the commitment letter. If the charge contains an error, it is not easy to correct it, as it will require the lender approval and another registration at the land registry office. The third document is often ignored, which is the standard charge terms. Lenders register their often-used standard mortgage/charge terms with the land registry office with an assigned number. In mortgage transactions only the number is mentioned and the contents of the standard charge terms do not need to be repeated. But the standard charge terms referred by number in your charge are also part of your mortgage. Different standard charge terms have different requirements. Many purchasers/borrowers do not know what is included in their standard charge terms, so do not have a clear understanding of what their mortgage obligations are.

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