When purchasing a home, the majority of buyers will be obtaining a mortgage to finance their purchase. Together with a number of other documents which will be sent to the buyer’s lawyer will be a lengthy set of Standard Charge Mortgage Terms to be provided and explained by the lawyer to the buyer.
While focus for the buyer will be on the exciting moments like obtaining their key and moving day, it is important for anyone obtaining a mortgage to understand what they are signing and receiving. For the moment, let’s talk about Standard Charge Mortgage Terms (SCMT). While this 25-30-page document seems daunting, and the likelihood of anyone other than lawyers or mortgage professionals reading them seems intensely optimistic, it is important for this document to be explained.
Standard Charge Mortgage Terms is a legal document from the lender of the mortgage, which outlines all of the terms and conditions regarding a mortgage loan in relation to real estate. Simply put, it covers what the borrower is agreeing to in obtaining their mortgage financing as well as the lender’s agreement to follow these terms.
Inside SCMT are definitions, coverage of the mortgage and the mortgage amount and applicable interest, what kind of interest is being applied and how it is to be paid, rules for repayment of the mortgage including prepayment terms such as penalties and fees, provisions on the default of the borrower (if they stop paying the mortgage or breach the terms of the mortgage), and promises and agreements between the borrower and lender. SCMT terms will include all of these matters and more, including also but not limited to, a registration number for the SCMT registered at the Manitoba Land Titles Office.
SCMT are provided in nearly all mortgage matters in relation to real estate and are typically required to be provided to the borrower. Before financing can be completed and mortgage funds release to complete a purchase, the lender will typically require confirmation in writing that the SCMT have been provided and explained to a borrower by a lawyer.
While complex and admittedly, likely boring to a home buyer it is important that a buyer understand their SCMT and basically… all the reasons and ways that it is very sound legal advice to: pay your mortgage payments, pay on time, and do not violate any of the terms of the SCMT and mortgage agreements.
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