What steps should I take to notify my lender about selling my mortgaged property?

Notify your mortgage lender as soon as you decide to sell by using its stated telephone, online or written contact process. The lender needs to record the proposed sale, identify the loan being repaid and provide the information your conveyancer will need to discharge the mortgage from the property title.

1. Check your mortgage paperwork. Locate your mortgage account number, the lender’s contact details and any terms concerning redemption, early repayment, a fixed or discounted rate, mortgage portability, or restrictions on selling. If the mortgage is held jointly, make sure all borrowers know that the lender will need to deal with the registered borrowers and the conveyancing solicitor.
2. Tell the lender that the property is being marketed or sold. Give the property address, your mortgage account number, the names of the borrowers and, if known, the expected sale price and proposed completion date. Explain whether the property is being sold through an estate agent, privately or directly to a buyer. The lender may have its own form or secure-message procedure, so follow its instructions rather than relying solely on a general customer-service enquiry.
3. Ask what information or authority it requires. The lender may need consent before discussing the account with your solicitor, particularly where the solicitor is not yet recorded on its system. It may also ask for the conveyancer’s details, a signed authority, identity information or confirmation of the intended completion date. Provide these promptly and keep copies of correspondence.
4. Request an up-to-date redemption figure. The redemption figure should set out the amount required to clear the mortgage on a specified date. It may include daily interest, an early repayment charge, administration or discharge costs, and any other sums due under the loan. Check the statement’s validity period and ask how the amount should be recalculated if completion takes place on another date.
5. Send the lender’s information to your conveyancer. Your solicitor will compare the mortgage details with the title, request any required formal redemption instructions and arrange for the lender’s charge to be removed after repayment. Tell the solicitor about any second charge, further advance, secured loan or other borrowing linked to the property, because the first mortgage statement may not show every sum that must be settled.
6. Keep making the contractual payments. Continue paying the mortgage and any associated account charges until your conveyancer confirms that completion has taken place and the loan has been redeemed. Stopping payments simply because the property is under offer can result in arrears, additional interest or damage to your credit record.
7. Review the projected completion statement. Before completion, check that the sale proceeds cover the lender’s redemption figure, conveyancing costs, estate-agent charges and other agreed deductions. If the projected funds are insufficient, tell your solicitor and lender immediately. A shortfall normally has to be paid or otherwise arranged before the lender will release its charge.
8. Confirm the final position after completion. The solicitor should use the completion funds to repay the mortgage and deal with the lender’s discharge requirements. Ask for confirmation of the amount paid and whether any balance, refund or further action remains. Keep the final completion statement, redemption confirmation and lender correspondence with your property records.

If your circumstances change, notify both the lender and your conveyancer rather than waiting for completion. Important changes include a delayed completion date, a revised sale price, a buyer withdrawing, arrears arising, or a decision to retain the property. A redemption statement prepared for an earlier date may no longer be accurate, and the lender may need to issue revised instructions.

Where the property is leasehold, the lender’s repayment is only one part of the completion requirements. Your solicitor may also need current service-charge, ground-rent and managing-agent information, as well as evidence that relevant charges are settled. Supplying lender and property information early helps the conveyancer identify issues that could prevent the mortgage being discharged on completion.

A direct buyer can still be used when a mortgaged property is sold, but the mortgage notification and repayment process remains necessary. The buyer’s funds must be transferred through the conveyancing process so that the outstanding secured borrowing is dealt with correctly and the buyer receives the title free of the lender’s charge, subject to the agreed legal arrangements.