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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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Can I get a wrap around mortgage or seller finance in UK

Customer Question

Can I get a wrap around mortgage or seller finance in UK
Submitted: 4 years ago.
Category: Law
Expert:  Alex J. replied 4 years ago.

Thank you for your question and welcome to Just Answer.

We don't really have the concept of a wrap around mortgage in the UK.

The similar concept would be you could grant the seller a second legal charge over the property in respect of the difference of the unpaid purchase price. It would be like the seller lending you the money recorded on paper only and then you granting the seller a legal charge.

Can I be of any further assistance?

Kind regards

Customer: replied 4 years ago.
I am the seller, so could you please explain what the legal charge means. I have tenants in my house who wish to buy it, but don't have the deposit. I don't understand your answer so could you explain further. Is it possible for me to be in actual fact the building society and the tenants pay me back for having the deeds changed to their name, which obviously would be done by a solicitor to make it legal.
I hope you understand what I am asking.
Expert:  Alex J. replied 4 years ago.

Thank you.

Yes I understand what you are suggesting. A legal charge is an instrument for securing one persons indebtedness to another on the assets they own.

This circumstance is merely one of fact. You will sell the property to your tenants. As a separate part of that transaction you will lend them money so they can complete the purchase from you. As you as lending them the money and are also the seller no money will actually change hands it will just be recorded on paper ie a loan document. This will represent the obligation on the tenants to repay you. In order to secure that loan make sure you can force a sale or take possession of the house you have sold them if they default, they will grant you a legal charge over the property (a legal charge is the same thing as a mortgage).

I look forward to hearing from you.

Kind regards