Mortgage with an overage clause attached
Discussion
Afternoon
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Robbiebgc said:
Afternoon
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Thats a question for a solicitor really, it's their responsibility to report title issues to the lender........my gut feeling is that it wouldn't be acceptable.....Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Sarnie said:
Robbiebgc said:
Afternoon
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Thats a question for a solicitor really, it's their responsibility to report title issues to the lender........my gut feeling is that it wouldn't be acceptable.....Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Robbiebgc said:
Afternoon
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
I can’t see why they would care...if the overage is triggered it will be because you have released significant additional value (of which you get 50%) which adds to their security.Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
In England and Wales, overage will generally secures by a first charge on the land or a restriction on the title. Neither of those are generally going to be acceptable to a mainstream mortgage lender.
The reference to missives indicates it’s Scotland though, so it may be different up there.
However, I’d always rather not have an overage clause on a fairly standard purchase. If the seller isn’t going to put in the legwork to maximise the value, why should they get more money later? Sell at market value now or put some effort in and get more now, but don’t make the transaction overly complicated for something the buyer will just avoid doing anyway.
The reference to missives indicates it’s Scotland though, so it may be different up there.
However, I’d always rather not have an overage clause on a fairly standard purchase. If the seller isn’t going to put in the legwork to maximise the value, why should they get more money later? Sell at market value now or put some effort in and get more now, but don’t make the transaction overly complicated for something the buyer will just avoid doing anyway.
Robbiebgc said:
Sarnie said:
Robbiebgc said:
Afternoon
Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
Thats a question for a solicitor really, it's their responsibility to report title issues to the lender........my gut feeling is that it wouldn't be acceptable.....Looking for advice, has anyone has went through a mortgage process with an overage/clawback clause built in? Were buying a house with land attached and there is a 10 year overage clause on the land and if we break the clause there's a 50% charge in terms of the increased value of land to be paid to the former land owner.
What's the chances of a high street lender agreeing to those terms?
6.12.1 If different from 1.11, contact point if pre-emption rights, resale restrictions, options etc will affect the lender's security:
Issuing Office and for Resale Restrictions and Special Schemes please also ensure the scheme complies with our requirements as documented on our website at nationwide.co.uk/-/media/MainSite/documents/about/media-centre-and-specialist-areas/information-for-lawyers/low-cost-home-ownership-special-schemes.pdf. Please advise us if the restriction does not meet our requirements as the case will not be able to proceed.
Overage agreements will only be acceptable if: -
1.They are made subject to our charge. Our charge must have priority over the Overage agreement. If the Overage agreement is already in place, it must be postponed so that Nationwide’s interest ranks in priority.
2.Any restriction wording does not prevent the disposition by a mortgagee.
Any existing Overage agreement and/or restriction that does not comply with the foregoing will need to be amended on or before completion.
If the Overage agreement relates to developing new units/buildings on the land we do not need to be advised. If the agreement relates to the current building (for example developing it into flats, adding an extension or conservatory, or a loft conversion) please advise us of the terms of the Overage in plain English. This material fact will be assessed to ascertain if we wish to amend or withdraw our offer.
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