Re-mortgaging your shared ownership property - Moat

Re-mortgaging yourshared ownershippropertyIf your mortgage rate is coming to an end you will need to contact your mortgage advisor/lender to arrange a new deal. We suggest that you allow at least three months for thisprocess, as if you are changing lender or borrowing further money, the mortgage lenderwill require Moat to issue them with the mortgagee protection clause. The mortgageeprotection clause is Moat’s guarantee to the lender that should anything happen, themortgage lender will receive the monies as a first priority.

Re-mortgaging forshared ownershipresidentsThe information contained within thisleaflet covers:• Re-mortgaging your home withan existing lender (with no furtherborrowing)• Re-mortgaging your home witha new lender (with no furtherborrowing)• Re-mortgaging your home withadditional borrowing (furtheradvance).Please refer to the relevant sectionof this leaflet as applies to yourindividual circumstances.ImportantinformationMoat will not consent to themortgagee protection clause for:• any mortgage rate whichexceeds 7.5%• any mortgage which has a linkedcurrent account or reserve facility(also known as a drawdown orborrow back facility) as part of theproduct (as this has the potentialto allow you to re-borrow paidcapital on an interest only basis)• interest only or self-certifiedmortgages (mortgages must beon a repayment basis with a termof no more than 25 years).Re-mortgaging with existing lender(with no further borrowing)If you are planning to re-mortgage with your existinglender with no further borrowing, we would simply askthat you send in a copy of your new mortgage offer to usfor our records – however please take into account theimportant information shown on the left hand side of thispage.Re-mortgaging with a new lender(with no further borrowing)If you are looking to re-mortgage with a new lender, youwill need to send in the following documents to enableus to assess your request and issue the mortgageeprotection clause to the new lender:• Copy of the proposed new mortgage offer• Written consent from your proposed lender that theywill not permit any further borrowing without firstseeking Moat’s consent• Redemption statement from your current lender• Fee of £120 (£100 + VAT) this is payable by debit orcredit card over the telephone, or by cheque, payableto Moat Homes LtdOnce all the above requirements have been received andthe mortgage amount, including any fees which are tobe added does not exceed your share of the propertybased on the current market value, Moat will send writtenconfirmation to the proposed lender agreeing to themortgagee protection clause to cover the new mortgageamount.Re-mortgaging with additionalborrowing (further advance)A further advance is defined as ‘any funds securedover and above the current capital outstanding on yourmortgage’.If you are looking to take out additional borrowing on yourmortgage, please note the important information below:• Moat will only agree to the mortgagee protectionclause for the following:• The purchase of additional shares (staircasing)• Essential repairs that are not covered bybuildings insurance• To allow one leaseholder to buy anotherleaseholders interest in the same property• Under no circumstances will Moat grant themortgagee protection clause to the proposed newlender if the additional monies are required for thepurposes of debt consolidation

• Moat will not grant the mortgagee protection clausefor any second charge secured borrowing againsta shared ownership property. It is at the lender’sdiscretion if they wish to lend without the consentof Moat, however any money borrowed would bewithout the benefit of the mortgagee protectionclause• Total borrowings must not exceed a loan to valueratio equal to the resident percentage owned. Forexample:Original valuation at purchase = £150,00075% (equity share) = £112500Current valuation = £177,00075% (equity share) = £132,750.Based on the above example, the maximum borrowing(outstanding capital and further advance) cannot exceed£132,750. Please note that each owner’s original sharewill vary.Depending on your reason for additional borrowing,please refer to one of the relevant sections below:• Further advance for essential repairs• Further advance for transfer of share.Further advance for essential repairsIf your further advance is for essential repairs, for exampleif you boiler has broken down and is irreparable and is notcovered by your buildings insurance, you will initially needto supply the following documentation:• Letter detailing all proposed repairs• Copies of estimates/quotations for all works to beincluded• Copies of detailed plans (if structural works areinvolved), planning permission and buildingsregulations, if requiredAll estimates/quotation must correspond to the additionalmonies requested, ie. if further borrowing totals £10,000then the quote must also total £10,000.Once all of the above documentation has been receivedand we have confirmed our approval to proceed, thefollowing documentation must be submitted:• Copy of the proposed new mortgage offer• Written consent from your proposed lender that theywill not permit any further borrowing without firstseeking Moat’s consent• Redemption statement from your current lender• Fee of £120 (£100 + VAT) - this is payable by debit orcredit card over the telephone or by cheque, payableto Moat Homes LtdUpon receipt of all of these documents, and providingthat the new mortgage amount does not exceed yourshare in the property (as per example above), Moat willarrange for the mortgage amendment approval to besigned and returned to your lender to enable the remortgageto proceed.Please note that once you have completed all the worksfor which you received the further borrowing you will berequired to provide copies of the paid invoices/receipts,guarantees and test certificates within 3 months of themonies being released (unless otherwise agreed withMoat). We also reserve the right to inspect the workduring and on completion. Failure to provide evidence, asabove, that the monies advanced to you were used forthe agreed essential repairs, may result in us taking legalaction against you.Please note that as it is a condition of your lease thatyour property is kept in good repair, essential repairs willnot be taken into financial consideration if you purchasefurther shares in your property, therefore although you willneed to provide us with evidence that these have beenundertaken, you do not need to register these with us.Further advance for transfer of shareIf your further advance is to buy out a joint owner’s sharein your property (transfer of lease), you will need to supplythe following documentation:• A completed application form available from theHome Ownership Team upon request• Written confirmation from the mortgage lender thatthey consent to the transfer taking place• In the case of a ‘court order’ for the property to betransferred, we will require a copy of the court order• Confirmation from the acting solicitor of the amountbeing paid to the leaving party to relinquish theirinterest in the property• Administration fee of £120 (£100 + VAT). This is thefee for transferring your lease.Once the above documentation has been received andwe have confirmed our approval to proceed, the followingdocumentation must be submitted:• Copy of the proposed new mortgage offer• Written consent from your proposed lender that theywill not permit any further borrowing without firstseeking Moat’s consent• Redemption statement from your current lender• Fee of £120 (£100 + VAT) - this is payable by debitor credit card over the telephone, or by cheque,payable to Moat Homes Ltd. This is the fee for usadministrating your re-mortgage.Upon receipt of all of these documents, and providingthat the new mortgage amount does not exceed yourshare (as per example above), Moat will arrange forthe mortgage amendment approval to be signed andreturned to your lender to enable the re-mortgage toproceed.

More informationWe hope that this leaflet has provided you withcomprehensive information about re-mortgaging,however we would be happy to discuss any furtherqueries that you may have.Please contact either Saira or Nancy using the detailsbelow:• Nancy Dakinnancy.dakin@moat.co.uk - 0845 359 6420• Saira Newvellsaira.newvell@moat.co.uk - 0845 359 6211Frequently asked questionsregarding re-mortgagingPlease see below some frequently askedquestions regarding re-mortgaging, with theirrelevant answers. If you have a question that isnot covered below, please contact us:If Moat do not consent to the mortgageeprotection clause, can I still borrow further moneyfrom my lender?Further borrowing which is not for essentialrepairs, or transfer of share can still be securedon the property, however such borrowing wouldnot benefit from the mortgagee protection clauseand would therefore be at the discretion of yourlender.What does the re-mortgaging fee cover?This covers the cost of administering approvalof the new mortgage and issuing the mortgageamendment approval document.I have undertaken essential repairs but paid forthem via my credit card. Can I re-mortgage topay off this amount from my credit card?This would be considered debt consolidation. Wecannot agree to give the mortgagee protectionclause for the purpose of debt consolidationunder any circumstances.What is the mortgage amendment approvaldocument?This is a document approved by Moat agreeingto your new mortgage.Can I include mortgage fees as part of myfurther advance?We are happy to agree for fees up to a total £500to be included as part of your further advance.Fees that are higher than this amount may beagreed, but this will be at the discretion of theHome Ownership Manager at Moat.Your home is at risk if you do not keep up mortgage repayments or payments on other loans secured against it.The value of properties can go down as well as up.Moat, Mariner House, Galleon Boulevard, Crossways, Dartford, Kent, DA2 6QE - 0845 600 1006 - mhoadmin@moat.co.uk - www.moat.co.ukMoat Homes Limited is a charitable housing association. The information contained in this document can be provided in other formats, including large print, on audio tape andelectronic versions. Please contact Moat to see if this document is available in a format more suitable to your needs. April 2013.