Show Me the Money! (And the Release of Mortgage)
When selling your property there are several people involved in the process but three of those key players are your conveyancer, yourself, and your mortgagee / bank if applicable.
We all have a different role, but we all are working towards and want the same outcome. There is a common misconception that your Conveyancer will take the reins and do everything to complete Settlement on your behalf. Whilst it is our job to guide and assist you, there are certain limitations of what we can do on your behalf.
Sale of Property When There is a Mortgage
You have secured a contract of sale for your property and engaged a conveyancer, happy days.
Who else needs to know? Your Mortgagee / Bank / Lender.
Who needs to tell them? You.
A Mortgage is a financial agreement (Loan) between yourself and your Lender. If your property has a Loan associated with it, you cannot sell it unless the Loan has been paid out and the Mortgage is released at settlement. This involves you completing the necessary paperwork with your Lender to request for the Loan to be released. Part of that process includes you listing us as the Conveyancer acting on your behalf for the transaction, and thus authorising us to speak to you Lender about it.
Your Lender will not get in touch with us or speak to us about your matter until they have received the completed Release of Mortgage request from you, and you have nominated us as your Conveyancer.
The lead time for your Lender to be ready to release the Loan is hard to predict as there are many contributing factors. An example being that your Lender may be waiting on valuations to be conducted of other securities you own which could add substantial delays to the normal processing time required to Release the Mortgage. Therefore, we encourage our clients to attend to the process of arranging the Release of Mortgage as soon as possible. Whilst we cannot complete this request for you, we make sure we advise you of this requirement in our First Letter Pack we send out soon after receiving the signed contract. We are also always ready to answer any questions you may have, regarding the Release of Mortgage
Sale of a Property When the Loan has Been Paid but the Mortgage has not been Released
You have finally paid off your loan and your debt with the bank is over – Congratulations!
Why are we still asking you to arrange for the Mortgage to be Released? Because the Release of Mortgage has not actually been registered with Land Titles and the Mortgage is still on the Title.
When you purchase a property and borrow money to do so, your Lender will register a Mortgage over the Title after Settlement to confirm the Loan agreement.
Once you have paid off the loan amount, the Loan can be released from the Title, but to do so a Release of Mortgage needs to be obtained from your Lender and registered at Land Titles. Your Mortgagee may arrange to do this for you, or you may be provided with the Release of Mortgage for you to arrange for it to be registered.
It may be that when it comes time to sell the property, you have not yet arranged for the Release of Mortgage to be registered.
If this is the case, the Release of Mortgage needs to be registered at the Land Titles before Settlement. Alternatively, you can provide the physical Release of Mortgage to us, and we can provide at settlement to the Buyer’s Solicitor.
There is a lot involved when you are selling your property but at Enterprise Legal, our main aim is to try and make the process as stress-free as possible.
We have experience in what is involved in the process of selling your property, and what can go wrong so we know what to avoid.
Our goal in advising our clients of the importance of this process is to avoid any last-minute delays that may attribute stress, costs or ultimately, being in breach of your sale contract due to your releasing Mortgagee not being ready on Settlement Date.
If you have any questions regarding your upcoming sale or any of the information in this article, please get in contact with EL's conveyancing team: