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Settling your HPP or BTLPP finance
Settlement is the Sharia compliant equivalent of a conventional mortgage ‘redemption’. It is the point when you complete your acquisition of the Bank’s share in the property and own it outright.
Settlement will occur naturally at the end of the Home Purchase Plan (HPP) or Buy to Let Purchase Plan (BTLPP) term, but you can also settle your finance early if you choose to.
What to expect when you settle your finance agreement
Stage 1 – Requesting a settlement statement
- You or your solicitor will be required to contact the Bank to request a settlement statement. A date of settlement will be required which cannot be more than 30 days in advance. This request should be sent to firstname.lastname@example.org
Stage 2 – Settlement balance
- Our Payments Processing Team will calculate the settlement balance, including any accrued rent up to the date of settlement. The Bank’s solicitor’s legal fee of £240.00 (including VAT) will be payable for the settlement process. This will be incorporated into the settlement balance. For properties based in Scotland, the Bank’s solicitor’s legal fee is £270.00 (including VAT). A copy of the settlement statement will be sent to all relevant parties either by post or email.
- Where the finance balance settles naturally, we will confirm the final monthly payment has been made in writing by letter. We will also outline the next steps in relation to the transfer of title. The Bank’s solicitor’s legal fee of £240.00 (including VAT) or £270.00 (including VAT) for Scottish cases will be payable prior to the Bank instructing its solicitors.
- Please note if you are settling the finance early, we will require proof of the source of funds being used to settle the finance. This proof should be sent to email@example.com
Stage 3 – Transfer funds
- You or your solicitor will need to transfer funds to Al Rayan Bank to settle the outstanding finance balance. Once the finance balance has been cleared, notification will be sent to the Bank’s solicitors. If funds are sent ahead of the date of settlement, they will be applied on date of receipt.
Please note if the funds are not received on the day of settlement, the finance will remain in place and the payments will continue to be debited as normal. If a new settlement statement is required, you will need to repeat Stage 1. For each new settlement statement, there will be a charge of £20 per statement. This will be incorporated into the settlement balance.
Stage 4 – Transfer of title
- If you have appointed a solicitor in this matter, they will need to ensure that the sublease to the Bank is surrendered, before submitting the transfer of title application to HM Land Registry. We strongly recommend that your solicitor monitors the transfer of title application and obtains confirmation from HM Land Registry that the title has been transferred to you.
- If you choose not to appoint a solicitor, the Bank’s solicitor will surrender the sub lease and provide the discharge and transfer documents directly to you. Any fees incurred as part of the process will also be payable by you and the Bank will not have any involvement from thereon. Therefore, it is your responsibility to ensure that the transfer of title application is successfully lodged at HM Land Registry.
We’re here to help
If you have any questions about settling your finance early or naturally, please contact us.
Frequently asked questions
We answer some frequently asked questions about home finance.