General informatrion

Mortgages are complex. The points highlighted below are important with regard to mortgages generally and if these are not understood then you should asked us clarification.

Payment Difficulties

The consequences of failing to meet the conditions of your mortgage are serious.
As a last resort your lender may apply for a possession order and you will also be responsible for the legal and other associated costs.

If you therefore find yourselves in financial difficulties it is important you let your lender know as soon as possible. The sooner you can discuss it the easier it may be to resolve.

Credit Refernce Agencies

When assessing your mortgage application it is highly likely that a lender will obtain a credit search. Before a lender does this they must obtain the customers authority.
By undertaking a credit search a note will be on the individual credit file that a search was carried out, and this information will be available to subsequent companies who may search a credit file.

It is important therefore to limit the numbers of searches that are made, as this generally is an issue taken into account when reviewing a mortgage application.

In addition once the mortgage is taken out lenders may provide information to Credit Reference Agencies on the way mortgage accounts are conducted.

Early Redemption Penalties

This may be charged by a lender upon early repayment of the mortgage with them.
Before repaying your mortgage early it is suggested you review the terms of your Mortgage Offer, or conversely discuss the matter directly with your lender.

When setting your mortgage up in the first place it is important to review the redemption penalties proposed, to make sure that they are in line with your requirements.

Mortgage Portability

Where a mortgage scheme is portable it means that the loan can be switched to a new property should you decide to move during the period of any fixed, capped or discounted rate.

This means that you can take the existing terms and conditions to a new property without having to pay redemption penalties. (If however you borrow a lesser sum than the present amount outstanding you would need to check this issue with your lender)

However when you wish to move your mortgage it will be necessary for you to satisfy the lenders criteria at the time of the move.

Higher Lending Charge Fee

If your mortgage represents a high proportion of the value of the property (for example 75% or more) you may have to pay an additional fee.
Some or all of this fee may be used by the lender, at its discretion, to obtain mortgage indemnity insurance to act as extra security for its sole benefit.

This insurance does not protect the borrower if the property is taken into possession and sold for less than the amount owed.

Customers remain liable to pay all sums owing, including arrears, interest and lenders legal fees.

If a lender claims the money from an insurance company then the insurance company may recover the sum directly from the borrower.

Costs

There are various costs associated with arranging a mortgage. Some of the more common ones are detailed below:

Solicitor’s fees. These will include legal costs, land registry fees and search fees. They may vary considerably so it is advisable to obtain comparative quotes.

Stamp Duty. This is a tax payable on all purchases over £60,000. Your solicitor will advise you of the level actually due.

Valuation report. The cost of this is based on the value of the property. A basic valuation report is primarily for the benefit of the lender. If customers require a more in depth report on the property they may ask for a survey to be completed. This does cost more than a basic valuation report.

Arrangement fee/Booking fee. Some lenders charge fees usually, but not always, in connection with special schemes. These fees are often non refundable if the mortgage does not proceed.

Brokerage fees. Some Brokers or Intermediaries who arrange mortgages on behalf of customers may charge a fee. We do not.

Insurances

There are a number of insurances customers should consider taking out with their new mortgage:

Buildings Insurance. This is an essential cover to insure the property from fire or other perils.

Contents Insurance. This is a very wise precaution against loss by theft, flooding and other perils.

Life Insurance. This gives cover against financial hardship in the event of death.

Mortgage Payment Protection. This is a short-term product which may be set up to cover redundancy, sickness and accident. It is highly recommended that all borrowers have some degree of income protection to protect their mortgage payments.

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