Charge on property

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amanda.1982 | 01:45 Fri 14th Dec 2007 | Property
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Sorry I am a little lost what does it mean to put a charge on a property?

Is it when you borrow money against your property and they just add interest to the amount and you pay it back when you sell the property?

Or is it when the property has gone up in value and you can borrow more up to the amount it has gone up to eg someone buys a property for 60,000 and a year later it is worth 80,000 and as long as you can afford the repayments you can borrow up to another 20,000. Is it the bank who you have the mortgage with that will give a charge on a property.

Or am I way off with both.



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a charge is a legal claim on a property

for example if you were to borrow �50000 on a mortgage from the bank on a property worth �100000, the bank would have a charge on the property so that if you sold it, or died, the bank would have claim on the first �50,000

if you then decided to borrow another �20000 of the equity from say, norton finance, they would hold a 2nd charge on the property, i.e. bank gets first pickings of their �50,000 and then Norton Finance would get their �20,000

A "charge" is now called a restriction and is an entry at the Land Registry on the Register of a property which stops the property being registered in a new name until the owner of the restriction lifts it. Effectively it stops a property from being sold until a debt (any debt - not just the sort of debt detailed by baileybird) is settled. A restriction is without time limit, can be sold to someone else and can be inherited. The Registrar at the Land Registry has to be convinced that a debt is genuine before a restriction is entered.
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thank you so much I understand now!

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Charge on property

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