Redemption statements: what to check before you rely on one
Obtaining a redemption figure is the easy part. Most of the risk on a redemption sits in reading the statement rather than in getting hold of it.
Requesting it
Ask early enough that a corrected figure can still be obtained. Quote the expected repayment date rather than today’s, state whether you act for the borrower or hold their written authority, and list every account or roll number you are aware of against the property.
The last of those is where the avoidable failures cluster. A second advance, a further charge or a linked account under a separate number will not appear on a statement for the number you quoted, and the shortfall surfaces after completion.
What to check on the figure itself
The date it is valid to
A redemption figure is quoted to a date, with a daily accrual after it. Completing later than the quoted date without recalculating leaves a shortfall.
Whether early repayment charges are included
They are sometimes shown separately, sometimes folded in, and occasionally quoted on an assumption about the repayment date that no longer holds.
Fees that are not interest
Administration, discharge and sealing fees are not always in the headline figure.
Every account against the property
Reconcile the statement against the register. A charge on the title with no corresponding figure is the question to resolve before completion, not after.
After completion
The charge comes off the register on an e-DS1 sent electronically by the lender, and that is a separate step from registering the new charge. Undertakings to discharge are a recurring source of claims, and the recurring cause is treating the undertaking as discharged when the money left rather than when the register was updated.
Where a lender is slow to submit the discharge, the file stays open. Diarise it rather than closing on the transfer of funds.
Written as general information for England and Wales, not as advice on an individual matter. Where a lender’s own requirement applies, it sits in Part 2 of the UK Finance Mortgage Lenders’ Handbook, which lenders amend without notice.