I want to…

Staircase

Staircase

Staircasing is the partial repayment of your equity loan without selling your property. The details below list out the two scenarios.


a. Staircasing: (without another loan being secured on your property)

In this scenario you will be looking to repay (redeem) your loan in part without taking out another loan secured on your property.

Please note: If the product you have is called Home Buy Direct or First Buy, your mortgage account will be made up of an HCA loan and a Developer Lender loan.  You will need to repay both loans in equal amounts.

Staircasing has a number of requirements which must be applied:

  • The minimum amount you can staircase at one time is 10% (of the total market value of the property at the time you staircase).
  • The above requirement means that, when the lenders’ equity in your property is less than 20% you can only repay the loan in full.
  • You may only staircase in multiples of 10%, that is 10%, 20%, 30% etc.
  • You cannot staircase if there are any arrears of interest payments and/or management fees on your mortgage account.  Any arrears must be cleared, before a staircase transaction can proceed.

First Steps

You will need to have the property valued by an independent surveyor.  This valuation is used to calculate the amount required to staircase your loan as per your request. It is your responsibility to pay for the valuation.

Valuations must meet certain criteria and these are listed in the customer information pack.

You will need to send the valuation report to us as soon as possible after you have received it. You will also need to let us know the details of the solicitor you are using for this transaction and, if staircasing, the percentage (%) amount you wish to repay.

Next Steps

If the property’s valuation is approved, we will write to let you know the amount required to staircase your loan. We will also write to your solicitor confirming the amount you wish to staircase (if applicable), the payment required for this to happen and how to make this payment.  From this point on we will liaise with your solicitor so that once payment has been received the legal paperwork is completed.

An administration fee is payable for staircasing your loan (see tariff of charges). To avoid delays, we suggest you contact us to make payment when you forward the valuation report.

b. Staircasing: (by securing another loan on your property)

In this scenario you will be looking to repay (redeem) your loan in part by taking out another loan secured on your property with another lender.

Please note: If the product you have is called Home Buy Direct or First Buy, your mortgage account will be made up of an HCA loan and a Developer Lender loan. You will need to repay both loans in equal amounts.

First Steps

You will need to have the property valued by an independent surveyor.  This valuation is used to calculate the amount required to staircase your loan. It is your responsibility to pay for the valuation.

Valuations must meet certain criteria and these are listed in the customer information pack.

You will need to send the valuation report to us as soon as possible after you have received it. You will also need to let us know the details of the solicitor you are using and the percentage (%) amount you wish to staircase.

Next Steps

If the property’s valuation is approved, we will write to let you know the amount required to staircase your loan. We will also write to your solicitor confirming the amount you wish to staircase, the payment required for this to happen and how to make this payment.  From this point on we will liaise with your solicitor.

Additional points for Staircasing your loan

If you are staircasing your loan we will provide a Guidance Pack to your solicitor who will process the Deed of Postponement document required by your main mortgage lender for this transaction.  The Deed of Postponement ensures your lender is ranked as the first charge on your home.

The amount of other lender borrowing permitted is restricted to the amount you need to pay for your staircasing transaction. For example, if you are looking to staircase 10% and your property is worth £200,000 you will need to pay £20,000. In this example the further borrowing you can take out is restricted to £20,000 – you may not exceed this amount.

Please note: We cannot confirm the exact amount of alternate borrowing you can obtain until we have the required information. You should not arrange alternate borrowing before we send you confirmation of the amount you can borrow. However, you may contact your lender to ensure it is possible for you to obtain the amount you estimate you require.

An administration fee is payable for staircasing your loan (see tariff of charges). To avoid delays, we suggest you contact us to make payment when you forward the valuation report.