
Does the declaration of trust prejudice the mortgage lender’s security?
The mortgage lender’s primary concern is that they will be repaid their mortgage upon sale, transfer or if they have to repossess. If the declaration of trust affects their ability to call upon their mortgage if required then the solicitor should seek the mortgage lender's consent to the deed.
One example would be if there is someone over the age of 18 who is granted a legal right to reside in the property within the deed of trust. The reason this would affect the mortgage lender's security would be that if they attempted to repossess the property, the party not on the legal title who has been granted a legal right could stop the mortgage lender from repossessing because they aren't bound by the terms of the mortgage. This is why anyone over the age of 18 has to sign an Occupier Waiver Form (also known as a deed of postponement) if they reside in the property.
What happens if I have told my mortgage lender?
Once you have notified the mortgage lender that there is a declaration of trust then you are bound by their response. If your deed doesn't affect the mortgage lender's security then there should be no issue. If you find that the mortgage lender does not agree with your deed then you will need to rely upon your solicitor to liaise with the mortgage lender to confirm why they do not agree to the deed and then look to redraft the deed to meet their guidance.
If you encounter an issue with your mortgage lender then we may be able to help you with redrafting your deed with our specialist solicitor. Please get in contact if you need our help using the form above.
...so does the mortgage lender need to see the declaration of trust?
Most deeds are used to assign the beneficial interest in property for tax purposes and don't affect the mortgage lender's security. A qualified solicitor who drafts the deed should draft it so that the mortgage lender's security is not affected and as such it is not required to be sent to the lender for their consent. Our solicitors can help draft a deed of trust for you and you can speak to one of our advisors today on 0333 344 3234 (local call charges apply).