Specialists in Personal, Residential and Commercial Finance

F.A.Q.'s

 

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The following list is by no means exhaustive but we hope it answers the most frequently asked questions.


What is a Remortgage?

What is a Secured Loan?

What is a Bridging Loan?

What is an Interest Only Mortgage?

What is the Financial Services Authority?

What Fees can we expect?

What is an Early Repayment Charge?

What is the difference between a Fixed Rate and a Variable Rate?

What is a Buy-to-Let?

What is a Right-to-Buy?

Valuations.

Credit Reference Agencies.

 

 

 

 


Whether you are moving home or buying for the first time. Finding a mortgage can be a confusing and stressful experience. So let us help you in finding the mortgage that suits your needs and circumstances.

Remortgage
There are many reasons for remortgaging. Coming to the end of your tie-in period, wanting a better rate or needing to raise additional capital for home improvements or whatever purpose. We can help you in choosing a suitable product.

Buy to Let
If you are considering purchasing a property to rent out or have an existing property or portfolio of properties and want to remortgage or expand your investments let us search the market for the best product.

Self Certify
For persons where proof of income is not readily available. There are mortgage products available which we can discuss.

Commercial
Whether buying a new premises or releasing equity we will be able to offer you a solution to your needs.

Interest Rate types

Variable rate - The interest rate that you pay rises and falls in line with the Lenders Standard Variable Rate (SVR). This may also be used in conjunction with cashbacks or short term discounts of the rate.

Cashbacks - A Cashback Mortgage provides a lump sum, payable on completion of the mortgage. The amount is determined largely by the size of the mortgage. The borrower can use the money in any way they choose. This is simply offered as an incentive by the lender.

Discounts - This is also used as an incentive by some lenders and gives a stated discount from the lender's variable rate for a given time period after which you will revert to the SVR.

Fixed rate - The interest that you pay is fixed for a given period, no matter what happens to the variable rate. The rate will normally revert to the lenders variable rate after the agreed term.

Capped Rate - The interest rate guarantees a maximum rate that you will pay. If the rate rises you will still only be charged up to a maximum of the capped rate but, however, if the variable rate reduces then you will automatically be switched to the lower rate.

Tracker - The interest rate you pay is linked to the Bank of England's Base Rate (set monthly) or some other base rate set independently from the lender. It will track this rate and so your payments will move up or down depending on the rate over a given time. The rate normally reverts to the lenders variable rate after the agreed term.

Early Redemption Penalties - if you redeem your mortgage before the end of the stated term you may have to pay penalties in excess of the balance outstanding. This is particularly likely if you have been offered an incentive as per some types described above. We will confirm the relevant penalties applying to any mortgage in our quotation and illustration. They will also be specified in the lenders offer of advance.

Higher Lending Charge (HLC) - If your mortgage exceeds 75% of the value of the property, you may have to pay a fee for the Higher Lending. This is arranged by the lender to cover them (NOT YOU) against any losses which may arise should you fail to meet repayments and there is not enough value in the property to pay off the mortgage on repossession. Many lenders do not make a charge until you exceed 90% of the value of the property and if there is a charge this will be confirmed in your illustration.

Valuations

To enable you to proceed with a mortgage, you will be required to pay for a valuation of the property which will confirm to the lender if the property is sufficiently and accurately valued for their lending purposes. There are basically three types of report :

Lenders Valuation - this tells the lender if the property is suitable as security for the mortgage. This will be carried out by an independent professional surveyor but the inspection is limited in scope. The surveyor will inspect the property's general condition and give an opinion on the value of the property. The report may not reveal serious defects and it is important to note that you will not be covered for any faults that existed at the time you bought the property. In extreme cases a serious defect may make the property worthless. It is generally recommended, particularly on older properties, that a more in depth report is obtained.

Home-Buyers Report - this report is more in depth and enables you to gain an expert's opinion of the price and condition of the property. Using a basic checklist the surveyor considers the condition of the property. It is generally cheaper to arrange this survey combined with the lenders valuation. However, these reports have their limitations and do not include areas that are not easily accessible, such as under floorboards.

Full Structural Survey and Valuation - this is the most comprehensive report and valuation. It may take several days to obtain, but you will receive a complete description of the structure, a list of major and minor defects and a guide on how much essential repairs might cost. In view of the legal implications of negligent surveys, surveyors will attempt to catalogue every conceivable fault each of which should be considered depending on their seriousness.

Credit Reference Agencies

When you sign an Application and Authority form, this will allow the prospective lender to make enquiries to any Credit Reference Agency and a record that this search was carried out will be shown on any later search. The lender may register information about you and the conduct of any account with a Licensed Credit Reference Agency (information thus registered is used to help make credit decisions or occasionally for fraud protection).

Repaying your Mortgage

You can select any term to repay your mortgage normally between 5 and 30 years. Obviously the shorter the term, the higher the monthly payment and therefore it is necessary to select a term where you feel comfortable with the monthly payment. We will always discuss a range of quotations and can provide illustrations upon request.

Once you have selected a mortgage product, you have to choose the payment method.

Repayment - with a repayment mortgage, your monthly payment covers the interest and a portion of the capital borrowed so that the amount outstanding is reducing over time and at the end of the term the loan will be repaid in full.

Interest Only - with an interest only mortgage, you only pay the interest on the money borrowed. Therefore is very important that you ensure that suitable investment or saving plans are in place to repay the loan at the end of term (examples include; endowment policy, ISA, PEP or pension plan).

Lending into Retirement - if your mortgage term extends past your normal retirement date, then you will need to prove that suitable income streams will be coming in to repay the mortgage. If not, you will need to reduce the term of the mortgage.

Mortgage Process

Step 1 - Submit a 'call back' or an enquiry application. Alternatively call us on 02380 263332. Once the information is received we will forward our details and Initial Disclosure Document and contact you to obtain a full Fact Find to establish your current situation and requirements.

Step2 - We shall search the mortgage market for the best product that suit all your needs and circumstances. An agreement in principle with a lender may be taken at this stage. We will send a KFI (Key Facts Information) document outlining clear details of the selected products to include all costs and terms. Any queries and requirements will be discussed and sent to you.

Step3 - Once you complete the application and return to us we shall submit to the relevant lender. A valuation on your property will generally be needed.

Step 4 - Once the application has been underwritten by the lender and agreed, a formal mortgage offer will be issued.

Step 5 - The final process now moves to conveyancing where the solicitors or conveyancers will tie up all the legalities of the mortgage deal and arrange a completion date.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT