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Mortgage Calculator
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Types of Mortgages ~ Interest
Rate types ~ Valuations
Credit Reference Agencies ~ Repaying
your Mortgage
~ Mortgage
Process
We undernote herewith
some of the important information that you should understand before
considering a mortgage. This is intended as a guide only and we will deal
with any query you may have on request. JFS Nationwide Homeloans is
authorised under the Financial Services Authority to advise you on your
mortgage requirements.
Types of Mortgages
Purchase
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
A fee may be charged. A typical fee would be 1% of the loan amount payable
on
completion of the loan.
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