UK Mortgage n Loans

Barclays Woolwich: Buy to Let Mortgage Guide

2008-02-04T03:42:00.000Z

Fancy yourself as a landlord? With our range of BTL deals, owning your own investment property has never been easier. And we’re sure you’ll find a mortgage that’s right up your street.

The basics:

• Mortgages you don’t need a degree to understand.

• Choose to borrow in your private name (whether you are a UK Resident, Non Uk-Resident or Expatriate), as a combination of private individuals (up to 4 applicants allowed), as a Special Purpose Vehicle (SPV) Limited Company or a Limited Liability Partnership (LLP). A SPV Limited Company may be an attractive option if you’re looking for an alternative investment vehicle.

• Borrow up to 85% loan to value (based on purchase price or valuation whichever is lower) on selected products.

• Mortgages can be for 5 to 25 years.

• Choose repayments on an interest-only and/or capital repayment basis.

• We'll consider loan of £35,000 up to £2.5 million on an individual property.

• Borrow on an unlimited number of properties within our BTL cap of £5m million (subject to formal approval).

• You can choose from a range of BTL Mortgage products including Fixed, Tracker and Switch and Save® Remortgage options. See our latest deals.

• Overpayments up to 10% can be made without incurring an early repayment charge (terms and conditions apply to certain products).

• We don’t have a maximum age restriction, but you will need to be at least 21.

• All mortgages are portable so you can move your BTL mortgage to another BTL property.

Rental cover:

Your property will need to generate sufficient annual rental income to cover your annual interest mortgage payment. The rent cover we will require is 105% calculated on the initial pay rate of the product you select.

General advice:

Owning an investment property is very different to owning your own home; you’re effectively running a small business and therefore need to research, plan and manage carefully to ensure the best possible chance of success.

Remember:

• BTL should be viewed as a long-term investment opportunity - the value of property can go down as well as up.

• Ensure you thoroughly research a prospective property and seek advice from local letting agents about its suitability for letting, level of current demand and anticipated rental income. Consider potential for other letting methods.

• Consider all the costs which may be involved (such as solicitors' fees, stamp duty, letting agency and management fees, building insurance, ground rent/service charge for leasehold flats, maintenance/repairs to the property) into your calculations.

• Consider the implications on your tax affairs. We recommend you consider taking professional tax advice from an accountant or discussing with your tax office.

• Make provisions for how you would make your monthly BTL mortgage repayments in the event of your BTL property being empty, your tenants failing to pay or if interest rates rise.

• You’ll need to arrange insurance that’s specifically for landlords. Find out more about Buy to Let insurance from Barclays.

Link to previous articles:
Barclays Woolwich Mortgage Selector: Which Mortgage is right for me?
Barclays Woolwich Mortgage: Property Ladder-2
Barclays Woolwich Mortgage: Property Ladder
Checklist for Buying a Home
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Remortgaging

Barclays Woolwich Remortgaging

2008-02-01T04:09:00.000Z

It’s important that one understands the motive and requirements before going for remortgaging. Remortgaging requires a lot of consideration, can involve some transfer cost and hence all the cost and requirement parameters should be clearly understood before going for remortgaging. Here, we present the details of remortgaging as available from Barclays Woolwich

Remortgaging could save you money - and it may be easier than you think.

It's the process of moving your mortgage from one lender to another or choosing a different type of mortgage from your current lender. It could also cut your monthly repayments.

When should I consider remortgaging?

• If you're coming to the end of a mortgage deal and are about to move on to your lender's Standard Variable Rate.

• If your home has risen in value since you bought it, remortgaging could provide a cost-effective way of borrowing larger sums of money at lower mortgage rates of interest.

What to think about before remortgaging

Remortgaging can be a fairly straightforward process. The first step is to talk to a mortgage specialist about the wide range of mortgages available. Here are some example of the kinds of things you need to consider if you want to remortgage.

• If you're locked into a fixed-term deal with your present lender, you may be liable for an early repayment charge that could wipe out most of your potential savings. You could also be charged a fee for closing your mortgage with your old lender.

• When comparing your old mortgage with a proposed new one, make sure that you compare like with like, eg a repayment mortgage with another repayment one rather than an interest-only loan.

• If you only have a small mortgage, you might be better off sticking with your current deal, as any savings could be cancelled out by the costs.

How it works

Your mortgage lender will want to know several things when you remortgage, including the market value of your property and your current income. Most lenders will require you to have at least 10% equity in your home.

Once your remortgage application has been accepted, the lender will instruct a surveyor to visit your home to establish how much the property is worth.

Do be aware that a surveyor will often value your home at a lower price than an estate agent.

The whole remortgage process - from your first conversation with a mortgage specialist to starting your new mortgage contract - can take six to eight weeks. However, this should only be considered a guideline.

Woolwich Switch & Save®

If you're thinking about remortgaging and would like to find out what we can do for you, call our mortgage advisers on 0800 316 5500*, see our remortgaging offers or current deals for our existing customers.

Customers switching from another lender can use the Woolwich Switch & Save remortgaging package with no valuation or legal costs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Barclays Woolwich Mortgage Selector: Which Mortgage is right for me?

2008-01-31T03:57:00.001Z

Confused by the range of mortgage options? Read our beginner's guide.

Finding the right mortgage can be tough when there are so many products on the market. A mortgage specialist can help you decide based on your personal and financial circumstances.

When you apply for a mortgage you'll need to be able to provide evidence of who you are, where you currently live and what you earn (usually with three months of pay slips).

If you're self-employed, you'll need a letter from your accountant and/or an annual statement of your income - and when it comes to actually applying for a mortgage, you'll be asked to provide two or three years' worth of audited accounts.

There are some things to consider. Check whether the mortgage you're looking at ties you into buying other products from the same company. For instance, lenders may require that the freeholder has buildings insurance (to cover the cost of rebuilding or repair work to the structure).

There may also be early repayment charges that the lender will charge if you pay off the mortgage early or move it to another lender within a set period.

Repayment methods

Your mortgage adviser can explain the different types of mortgages available. Briefly, these are:

• Interest only - With an interest-only mortgage, your payments will only cover the interest on your mortgage. The amount of capital remains constant and it's down to you how you choose to repay the full amount you’ve borrowed at the end of the mortgage term. So it's important to remember that you'll need a suitable investment in place (such as an ISA), which you must regularly review to ensure that you're able to repay your mortgage in full.

We would recommend that you approach an Independent Financial Adviser to discuss the investment options available to you and the potential risks associated with your chosen strategy. Alternatively, a Woolwich Mortgage Adviser will be happy to answer any questions.

Bear in mind that problems can arise if your chosen investment doesn't perform sufficiently well to allow you to repay your mortgage. But if the investment performs better than expected, you may end up with some extra cash after you've paid off the mortgage.

• Repayment - you pay off the mortgage capital as you go along as well as paying interest so by the end of the term there's nothing left to pay. This is often seen as the safer option, as long as you keep up your repayments in full and on time.

Interest rates

Mortgage lenders can charge interest in a variety of different ways:

• Fixed rate - the rate is fixed for a set period: the shorter the time, the lower the rate will usually be. The advantage of this is that it makes budgeting simpler in the early years of your mortgage as you know exactly what you'll be paying every month. However, if interest rates fall below your fixed rate, you'll not benefit from this reduction. Early repayment charges and arrangement fees may apply. Once your fixed rate period has ended, you'll be switched to the Standard Variable Rate. You may therefore want to consider remortgaging as you approach the end of your initial offer.

• Standard variable rate (SVR) - this rises and falls in line with general interest rates so you should benefit from any drop. However, if general interest rates rise, your mortgage rate will increase too, along with your monthly repayment. There aren't usually any early repayment charges.

• Capped rate - your rate will rise and fall in line with your lender's standard variable rate but it'll never rise above the 'cap', which is set from the start of your mortgage contract for a specified period of time ('capped rate period'). This means that you know the maximum amount you'll pay during the capped rate period. If the lender's standard variable rate falls below the cap, you'll pay the lower rate for as long as this is the case. If the lender's standard variable rate later rises above the cap again, you just go back to paying the capped rate. Early repayment charges may apply. Once your capped rate period has finished, you'll be switched to the Standard Variable Rate.

• Discounted rate - you get a discount from the lender's base rate or SVR for a set period, which may represent a valuable saving. However, your repayments will still be variable so you don't have the certainty that you get with a fixed rate. This means discounted rates may not be ideal for those on a strict budget. If you have some spare money and rates are low and dropping, you could benefit. Early repayment charges may apply.

• Tracker rate - this rate is a set amount above or below the Bank of England or lender's base rate. The aim is to 'track' these base rates (whether they rise or fall). So you'll benefit from general interest rate cuts, irrespective of whether your lender decides to drop its mortgage rate in line with the base rate. However, if general interest rates rise, your mortgage rate will increase too along with your monthly repayment. There may be early repayment charges.

• Offset mortgages - Offsetting is a way of managing your money using your current account, savings account and offset mortgage. You can 'offset' the credit balances you have in your current and savings accounts against your mortgage balance and pay interest (at the mortgage rate) on the difference only.

This means you could potentially reduce the total amount of interest you pay on your mortgage. You will not, however, earn interest on your credit balances.

This type of mortgage can only really work for you if you have savings to offset or, for example, get regular bonuses.

When offsetting credit balances against the mortgage, you have the option of keeping your mortgage repayments as they are, thereby paying the mortgage off more quickly, or keep the original term and reduce your monthly repayments (please note your mortgage repayments may vary). Either option may provide substantial savings. Woolwich Offset Mortgages are on a tracker rate basis.

Remortgaging

This is the process of moving your mortgage from one lender to another, or choosing a different type of mortgage from your current lender. Read our guide to remortgaging.

How we can help

See the range of mortgage services we offer:

For first-time buyers

For people moving home

For customers who want to remortgage.

Link to previous articles:
Barclays Woolwich Mortgage: Property Ladder-2
Barclays Woolwich Mortgage: Property Ladder
Checklist for Buying a Home
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve

Barclays Woolwich Mortgage Explained

2008-01-30T04:07:00.000Z

It's a mighty financial commitment but applying for a mortgage doesn't have to be a headache. Here's how it works:

How much can I afford to borrow?

Do the sums. Use a budget planner to work out what you can afford to pay each month on top of all your other bills. Make an allowance for interest rate rises and unexpected events.

How do lenders decide how much they'll lend?

Lenders take into account such things as your income and expenditure, credit history, age, address and marital status. They use this information to establish whether an application will be approved or declined.

Generally, income multiple calculations help to give an indication of how much you can borrow. Barclays can offer up to four times your salary if you apply on your own. If you're applying jointly you could get up to three times joint salary or four times the first salary and one times the second. (Each of the above are subject to certain conditions being met).

Affordability calculations are also used during the application process as part of the lending decisions. This involves looking at your monthly income against your monthly outgoings, including debt repayments, utility bills and 'lifestyle costs' such as eating out.

What if I'm self-employed?

Policy will vary between lenders so ask around but most lenders ask for verification of your income. If you're self-employed, lenders will usually ask for evidence of your earnings, such as two years of trading accounts. Your application will often need to include evidence of a track record in a particular field.

I have a bad credit history

Lenders will assess each case individually. If you have a County Court Judgment (CCJ) against you for a debt you failed to pay promptly, for example, you may not be turned away by high street lenders if you repaid it more than a year ago.

If it's been less than a year, or if it's still 'unsatisfied' (outstanding), you may have serious difficulties getting a mortgage. CCJs remain on your credit record for six years.

You may only be able to obtain a mortgage from what are known as 'sub-prime' lenders. Those borrowers with adverse credit and CCJs may be charged higher rates by these lenders (historically about 1.5-2% above base rate) to reflect the potentially greater risk of repayments being missed.

These higher rate mortgages are becoming increasingly mainstream and thus competitive, which in turn is slowly bringing rates down. Be aware that sub-prime mortgages often carry large arrangement fees - five or six times higher than high street lenders.

Why else might I be turned down?
Bad credit history is the biggest but other classic reasons for an application being declined include:
• Length of employment, ie short amount of time in your current employment.

• Being absent from the electoral roll at your previous address.

• Property value - a surveyor's valuation report shows the property is not worth the sum you're seeking.

• Construction - many don't like lending on older concrete buildings, for example.

• Location - flats above shops or ex-local authority properties sometimes have difficulties.

• Properties with a short lease.

How much deposit do I need?

Ideally between 10% and 15% of the value of the property as this will give you access to the most competitive rates in the market. In some circumstances lenders may give you a 100% mortgage to cover the full value of your property but some will levy a higher lending charge for the privilege, although Barclays and Woolwich will not.

The 'magic' 75%

If you're having trouble getting a mortgage, your chances will improve if you can afford to borrow less than 75% of the property value. This is because lenders have to indemnify themselves against mortgages over this amount.

Clubbing deposits and buying in a group

Up to four names are allowed on a property's deeds but many lenders limit you to two. However, buying in a group demands serious thought.

You should have a legal agreement drawn up by a professional before you buy that specifies each person's deposit contribution, monthly repayment and what should happen if any member wants to sell, leaves or dies.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Important information

Please read our site terms and conditions. In addition we would advise you that: The information given in this article was correct as at January 2007. It does not, however, take account of any changes in regulations, the law or interest rates since that time.

This article is not a substitute for obtaining professional advice from a qualified person or firm.

Barclays is not liable for any opinions expressed. While every effort has been made to ensure that the information contained is accurate at the time of publication, no liability for damages is accepted by Barclays, the publishers or any other organisation or person providing information, arising from any errors or omissions that may appear, however caused - or from any editorial alterations to submitted information.

Examples given of products and services are not exclusive. Other companies may provide the same products and services, and inclusion of a product or service should not be taken to indicate that Barclays recommends it over any similar product or service.
Link to previous articles:
Barclays Woolwich Mortgage: Property Ladder-2
Barclays Woolwich Mortgage: Property Ladder
Checklist for Buying a Home
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve

Barclays Woolwich Mortgage: Property Ladder-2

2008-01-29T03:49:00.000Z

Joint tenancy agreements

• Particularly appropriate for those in stable cohabiting relationships but perhaps not those with children from another relationship.

• On the death of one joint tenant his or her interest in the land passes automatically to the other joint tenants.

• Your share of the property cannot be transferred under will or intestacy.

• Everything is jointly owned in equal shares, including the property itself, and any profit or loss made when you come to sell the property.

• All parties are liable for the loan and if one person defaults, the lender can pursue the others for the full amount.

• In the event of arrears everyone will receive a bad credit rating.

• The property cannot be sold without the consent of both parties.

Tenancy in common

• Particularly appropriate for buyers who are unrelated friends, family members who are not cohabiting couples (eg siblings) or where the purchasers contribute unequal amounts to the purchase price.

• Each purchaser holds a distinct fixed share of the property, which may or may not be equal.

• The share is not affected by the death of a fellow co-owner. When a tenant in common dies, his interest passes under his will or intestacy. It is his to dispose of as he wishes.

• All parties are liable for the loan and if one person defaults, the lender will pursue the others for the full amount.

• In the event of arrears, everyone will receive a bad credit rating.

• If one person moves out and the others decide to buy their share, they will be liable for stamp duty on the full value of the property, if it's worth more than the relevant threshold.

• It's recommended that before entering into a Tenants in Common agreement you seek independent legal advice.

Pros

• You're on the property ladder.

• You can potentially get a better mortgage deal and there's possibly less financial pressure.

• You're living with people you already know.

• You can possibly afford a bigger property.

Cons

• If one party doesn't pay, the lender can pursue the other borrowers for the full amount.

• Living with friends can cause disputes and cause even the closest friendships to end.

• In the case of a tenancy in common, if one party decides to sell and you want to buy their share, you may need to pay stamp duty on the full value of the property. This will also increase your mortgage and associated costs.

Some other options

If you don't want to live with friends or family, there are a range of ways the Government can help your property dreams become a reality.

Key workers

If you have a 'key' occupation, such as nurse, teacher, social worker, police or community support officer, firefighter or prison and probation officer, and you live in London, the south or east of England, the Key Worker Living Scheme, funded by the Housing Corporation, offers a range of help to get you on the ladder.

The programme offers:

• Equity (Homebuy) loans of up to £50,000 towards buying a home.

• Higher Homebuy loans of up to £100,000 for London school teachers who have the potential to become leaders of London’s education system.

• Shared ownership of new properties.
When you sell your home, the Housing Corporation gets its money back, plus a proportional share of any increase in the value of the property. However, if you leave your job and are no longer eligible for the scheme, you will usually have to pay the Housing Corporation's money back within within a set time period.

Shared Ownership

If you can't afford to buy your own home, Shared Ownership schemes allow people to buy a property with a Housing Assocation. You pay a mortgage on your share of the property and pay rent to the Housing Association for their share – which can be between 25% and 75% of the property.

You can either buy a house that's been built or bought by the housing association or find a property on the open market and ask the housing association to help you buy it.

This scheme will allow you to have a smaller mortgage and, together with the rent, this is usually cheaper than paying a large mortgage on its own.

How it works:

if your share costs less than £125,000, you won't have to pay stamp duty. Each year, you're able to increase your stake in the property, usually in 25% chunks and, as long as your new share is under £125,000, you won't have to pay stamp duty.

When you sell up, the profit will be divided between the owners and the housing association, according to what share you each own. Before entering into a Shared Ownership Scheme we suggest you seek independent legal advice.

Need to know:

each housing association varies, but all owners must individually and jointly meet the eligibility criteria.

Find out more

For more information on these schemes and to find out whether you are eligible, check out these websites:

● Communities & Local Government
For advice and information on schemes.

● Housing Corporation
For information on Shared Ownership and contact details for the housing associations in your area.

● Key Worker Living
For information on who qualifies, how to apply and contact details.

• You can also contact your local authority to find schemes in your area.

Link to previous articles:
Barclays Woolwich Mortgage: Property Ladder
Checklist for Buying a Home
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage

Barclays Woolwich Mortgage: Property Ladder

2008-01-28T03:50:00.000Z

Are you finding it hard to get a foothold on the property ladder?

Buying a first home is never easy - getting that first mortgage can be tricky and more first-time buyers are finding that they're not earning enough to qualify for the mortgage they need.

If that sounds familiar, don't worry. You do have options.

Buying with others

One increasingly popular choice is to pool resources with one or more friends or family members to help boost your spending power.

It works like this:

lenders typically give joint applicants 2.5 times their combined income, or possibly higher if there are more than two people buying. That amount, plus the deposit you've saved, is the amount you could spend on your new house.

Before you start choosing furniture together, though, don't forget that regardless of how emotionally attached you are to the people you're buying with, buying a house together is first and foremost a business deal.

That means that all the arrangements should be formalised by a solicitor. It's the best way of ensuring that everyone understands exactly what’s expected of them.

How it works

There are two types of legal arrangement for co-owning property: joint tenancy agreements and tenancies in common.

Once you've chosen the people you want to live with, you'll need to decide which of these is most appropriate for your circumstances. This will be based on some of the following:

• What your relationship is to your fellow purchasers.

• Who will own what percentage of the property.

• The deposit you pay - this will be based on how much of the property you own and should be detailed in your legal documents.

• How long you anticipate you will want to own the property for.

• Is one party likely to want to sell the property in the near future? If so, who will have the right to buy this portion?

Link to previous articles:
Checklist for Buying a Home
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home

Checklist for Buying a Home

2008-01-25T03:46:00.001Z

Print this checklist to make observations about buying a home.

Buying a home checklist

Property details

Address:

Type (eg flat):

Price:

Estate agent:

No. of bedrooms:

Viewing date(s):

Your views - make notes and mark out of 10

EXTERIOR

Paintwork:

Roof & tiles:

Windows & frames:

Drains/gutters:

Garden:

Other:

INTERIOR

Kitchen:

Bathroom:

Living room:

Dining room:

Bedrooms:

Hall:

Other:

LOCATION

Work:

Schools:

Transport:

Schools:

Noise:

Neighbourhood:

Other:

Other observations (eg reason for sale, estimated bills, age of property):

Link to previous articles:
Barclays Woolwich Mortgage FAQ- 2
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home

Barclays Woolwich Mortgage FAQ- 2

2008-01-24T03:50:00.000Z
What is a redemption statement?
If you are considering paying off your mortgage and would like to understand how much you owe, we can provide you with a redemption statement (please note that a charge may apply). This will give you a total figure (including interest) for the repayment of your mortgage as a given date, including interest and any early repayment charges that are due.

Call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

How often do I get a mortgage statement?
We'll send you a mortgage statement annually. This shows:
• The monthly payments you have made in the past 12 months
• Your mortgage balance (as at a given date)
• Any interest that you will have been charged.

The date you receive this statement will depend upon the type of mortgage you hold with us:
• All Woolwich mortgages (excluding Buy to Let) taken out after 1 December 2003 - every September
• All Buy to Let Mortgages - every December
• All other Woolwich and Barclays Mortgages - every March.
If you want to receive an annual statement at any other point during the year, we will be happy to do this for you. Please note that a charge may apply for this service.

Is there a fixed date for mortgage repayments?
When you take a new mortgage with the Woolwich, your payment date will automatically be set to the 16th of every month.

If you wish to change this to a more suitable date we can do this for you, although you will be charged for the additional daily interest for that first month. For example, where a payment date has been moved to the 21st of the month, an extra five days daily interest will apply.

Call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

Can I change the due date for my mortgage repayments?
Yes. However, please note that you will be charged for the additional daily interest for that first month. For example, where a payment date has been moved to the 21st of the month, an extra five days daily interest will apply.

Call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

What happens if I miss a payment?
If you suspect that you may not be able to make your monthly mortgage payment, please let us know as soon as possible. We can then work out how best to help you.
• If the missed payment is due to a technical problem (e.g. a recent change to your bank account details), call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

• If you are, or expect to be experiencing financial difficulty, call 0870 241 5147 (lines are open 8.30am-5.30pm Monday to Friday and 9am-1pm Saturday)* or write to us at Woolwich, PO Box HK444 Leeds, LS11 8DD.

What do I do if my personal details change?
Let us know as soon as you can if you change your personal details. Call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday-Friday) or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

What do I do if I want to repay my mortgage?
There are three steps to paying your mortgage back in full.

1. Order a Redemption Statement. This will give you a total figure (including interest) for the repayment of your mortgage as at a given date. To order a statement, call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

2. Making your payment. You can do this by addressing a cheque or Bankers Draft for the amount payable to Woolwich PLC and sending to Woolwich, PO Box HK444, Leeds, LS11 8DD. Alternatively, you can transfer the funds by BACS/CHAPS transfer.

3. Confirmation Letter. As soon as we have received the correct amount from you, your mortgage can be repaid. We will send you a letter to confirm that this has been done.

Can I change my mortgage?
Yes, there are several options for changing your mortgage, including remortgaging, taking out a Mortgage Reserve and changing the date of your monthly repayments.

Please call us to talk through your options on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD.

What is the difference between a Mortgage Reserve and a Barclays Savings Reserve?
The Mortgage Reserve facility allows you borrow against any equity you might have within your property. The amount of Mortgage Reserve that may be available for your use will be the difference between the outstanding balance on your mortgage at any particular point in time and up to a maximum loan-to-value of 90% on your property. For flexible mortgages, interest is charged on the Mortgage Current Account at the Standard Variable Rate, except for Offset mortgages where interest is charged at the Offset mortgage rate and charged to the main mortgage account (for interest calculation purposes).

A Barclays Savings Reserve is a savings account that can be set up as part of a Money Manager arrangement. Surplus funds can be swept into it from your current account either weekly or monthly and it also tops up your current account if your current account balance falls below a limit specified by you, subject to sufficient funds being available in the Savings Reserve account.

What is a Savings Pot?
A Savings pot allows you to put your savings into different accounts or ‘pots’ and name them accordingly eg Holidays, Car, Bills. You can hold up to 12 separate savings pots but interest is still calculated at a rate that applies to the total balance of all savings pots. If you are offsetting your savings against your mortgage balance the total of all the savings pots will be used. You can also choose to offset some or all of your savings pots against your mortgage to reduce the amount of mortgage interest you pay. Any savings pots you choose to offset will not earn credit interest or be included in the total savings balance for the purpose of determining the interest rate paid on any pots receiving credit interest. Link to previous articles:
Barclays Woolwich Mortgage FAQ
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging

Barclays Woolwich Mortgage FAQ

2008-01-23T03:31:00.000Z
Can I get a mortgage?
How does a Mortgage Reserve work?
Do you offer a fixed rate mortgage?
Do you offer a tracker rate mortgage?
Do you offer European mortgages?
What is an early repayment charge?
What is an SVR mortgage?
Do you sell home insurance?
How do I get the balance on my mortgage?
What is a redemption statement?
How often do I get a mortgage statement?
Is there a fixed date for mortgage repayments?
Can I change the due date for my mortgage repayments?
What happens if I miss a payment?
What do I do if my personal details change?
What do I do if I want to repay my mortgage?
Can I change my mortgage?
What is the difference between a Mortgage Reserve and a Barclays Savings Reserve?
What is a Savings Pot?

Can I get a mortgage?
When you apply for a mortgage we take into account your income, credit history, age, address and marital status in order to determine whether we can give you a mortgage, and how much we can lend you. You can get an idea of how much we might be able to lend you by using our calculator. Please note this quotation is provided for illustrative purposes only and does not constitute an offer of a loan, nor does it in any way bind us to make an advance to you.

How does a Mortgage Reserve work?
A Mortgage Reserve is a secured overdraft facility on a Mortgage Current Account, which enables customers with a flexible mortgage to borrow against the equity in their home.
The Mortgage Current Account operates like a normal current account. You will receive a cheque book and debit card and will be able to set up standing orders and Direct Debits.

The amount of Mortgage Reserve you may be able to use will be the difference between the outstanding balance on your mortgage and up to a maximum loan-to-value of 90% of your property.

The loan-to-value on your property is the total amount outstanding on your mortgage loan at any particular point in time expressed as a percentage of the lower of the purchase price or our valuation of your property. For example, if the total mortgage loan is £80,000 and the lower of the purchase price or our valuation of your property is £100,000, the loan-to-value is 80%. In this instance, if 90% of the lower of the purchase price or our valuation of your property of £100,000 is £90,000, you could apply for a Mortgage Reserve of £10,000 (£90,000 less £80,000), or a lower amount if you wish.

Applications for a Mortgage Reserve are subject to status. A Mortgage Reserve is repayable on demand and must be repaid by the end of the mortgage term. A charge over your property is required as security.

For Woolwich flexible mortgages, interest is charged on a Mortgage Current Account at the Woolwich Standard Variable Rate except for Offset mortgages where interest is charged at the Offset mortgage rate. For Offset mortgages only, interest due on a Mortgage Current Account is charged to the Main Mortgage account (for interest calculation purposes).

All borrowing on a Mortgage Reserve is on an 'interest only' basis.

You can make payments to reduce the capital amount outstanding on your Mortgage Reserve at any time.

Find out more about our Mortgage Reserve option.

Do you offer a fixed rate mortgage?
Yes. Find out about our fixed rate mortgage options.

Do you offer a tracker rate mortgage?
Yes. Find out about our tracker mortgages.

Do you offer European mortgages?
Yes. We can help you buy property in Europe and we have special features on buying in France, Italy, Spain and Portugal. Find out about our European mortgages.

What is an early repayment charge?
A fee you may face if you pay off all or part of your mortgage earlier than agreed. It is designed to compensate the lender for the costs they incur when you repay your mortgage early.

Not all mortgages feature these charges. Our individual mortgage pages feature details of any repayment charges that apply to these products. To check what, if any early repayment charge applies to your mortgage, you need to check your documentation or contact your mortgage provider.

What is an SVR mortgage?
SVR stands for Standard Variable Rate. It is an interest rate that fluctuates in line with general interest rates and market conditions.

Do you sell home insurance?
Yes, we sell both contents and buildings home insurance. Find out if you can save with Barclays home insurance.

How do I get the balance on my mortgage?
We can provide you with a balance over the telephone (immediately) or in writing.

If you're looking to obtain a balance so you can redeem your mortgage, please see the Redemption Statement question below.

Call us on 0845 605 1111 (lines are open 8.30am-5.30pm Monday to Friday)* or write to us at Woolwich, PO Box HK444, Leeds, LS11 8DD. Link to previous articles:
Barclays Woolwich Mortgage Glossary
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home

Barclays Woolwich Mortgage Glossary

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Advance

A mortgage loan.

APR

Stands for Annual Percentage Rate, which helps you compare the cost of different mortgage deals. It takes into account the amount of interest you’ll pay, the length of the term of the mortgage and other charges such as any application fee.

Application fee

Lenders sometimes charge a fee to secure certain mortgage rates.

Barclays Bank Base Rate

Interest on tracker rate mortgages is charged at a set margin above or below or equal to the Bank of England Base Rate. Interest rate changes on existing tracker rate mortgages take effect from the first of the month following a change to the Bank of England Base Rate. All references to the Barclays Bank Base Rate in your Offer document (where the reference is to 'Barclays Bank PLC’s Base Rate') and Key Facts Illustration document (where the reference is to 'our Base Rate') should be taken to be references to the Bank of England Base Rate.

Bank of England Base Rate

This is also known as the Bank of England's repo rate. This rate can go up or down from time to time and is announced by the Bank of England's Monetary Policy Committee every month.

Completion

The conclusion of the purchase of the new property.

Conveyancer

A legal expert handling all documentation for the sale and/or purchase of a property. This will be a solicitor or licensed conveyancer.

Coveyancing

The legal process involved in buying and selling a property.

Credit scoring

A technique used by lenders to assess the suitability of your application.

Daily interest

With this method of calculating mortgage interest, interest is charged on the amount of mortgage outstanding every day. This means lenders take into account any changes in the amount you owe on a day-to-day basis.

Disbursements

All the various costs itemised on your conveyancer’s invoice for carrying out your homebuying legal work.

Discharge fee

You have to pay this to some lenders for releasing their hold over a property once you've paid off your loan.

Early repayment charge

A fee applicable if you pay off all or some of your mortgage, or change mortgages, during a specified period.

Equity

The difference between the amount you owe on your mortgage and the current value of your property.

Exchange of contracts

The swapping of contracts between a buyer's conveyancer and a seller's conveyancer. Once you've exchanged contracts, both parties are legally bound to the transaction. The Scottish equivalent is called Conclusion of Missives.

Final repayment charge

Sometimes called an exit fee, this charge is applied when the mortgage is repaid in full.

Financial Services Authority (FSA)

An independent body that regulates the financial industry in the UK. One of their aims is to help consumers become better informed about financial matters.

Freehold

A form of legal title – usually on a house – which means you are the absolute owner of the property and the land it's on.

Higher lending charge

Fee or premium sometimes charged by lenders if your mortgage represents a high percentage of the property’s value.

Key facts about our services

This document will be issued to you when you first make contact with the lender and contains information such as the regulated status of the lender, the level of service provided to you and reference to the Financial Services Compensation Scheme.

Key facts illustration

A key facts illustration details things such as the amount of borrowing required, the selected mortgage product, any fees and charges and information about any additional features of the product. All lenders are required to set out the details in a key facts illustration in the same format so it’s easier for you to compare products.

Land registry fee

Your conveyancer pays this on your behalf to register your details in the Land Registry records as part of the buying and selling process.

Leasehold

This means you own a property for a set number of years. When the lease expires, the property returns to the freeholder. Flats are commonly sold as leasehold.

Local authority search

Part of the conveyancing process when you buy a property, carried out by your conveyancer. It gives details of any matters that affect the property, as it reveals any proposed changes to the local area, such as road improvements, and details of any planning permission given for the property.

LTV

This means loan-to-value and is the proportion of the value or price of the property (whichever is the lower) that you borrow on a mortgage. For example, a £171,000 mortgage on a house valued at £180,000 would mean an LTV of 95%.

Mortgage

A mortgage is a loan that you use to buy a property. Your property will become the security for your loan, which means that if you cannot afford your mortgage repayments your home may be repossessed by us.

Mortgage deed

A legal document establishing a mortgage on a property. This is called a Standard Security in Scotland.

Mortgage term

The length of time over which you agree to pay back your mortgage, generally up to a maximum of 35 years.

Negative equity

This is when the amount you owe on your mortgage is greater than the value of your property. It particularly becomes a problem if you want to move house.

Portability

You may decide you want to move house further down the line. This means you have the ability to take your mortgage with you if you move to a new home.

Premium

Amount you pay on a regular basis for a service, such as an insurance policy.

Remortgaging

When you arrange a new mortgage with a different lender and use the new mortgage to pay off the old one.

Retention

Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

Stamp Duty Land Tax

Government tax you have to pay based on the purchase price of a property worth more than £125,000.

Structural engineer's report

A specialist report from a structural engineer on the condition of a property.

Survey

A report on the structural condition of the property you are planning to buy. Typically there are two levels of survey: a homebuyer’s survey and valuation, best suited to smaller or relatively modern properties, or a building survey which will provide a greater level of detail and is more suited to older or more complex properties.

Valuation

An assessment of the value of the property you are hoping to buy, normally requested by your lender to ensure that the property is suitable security for the loan. Link to previous articles:
Barclays Woolwich Mortgage Reserve
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home

Barclays Woolwich Mortgage Reserve

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Are you looking for a bit of extra cash? You may need to look no further than your front room…

You can apply for a Mortgage Reserve with all Woolwich flexible mortgages. It's a secured overdraft facility offered through a Barclays Mortgage Current Account, where you borrow against the equity in your home. You can use it for pretty much anything, like home improvements or even buying a new car.

The Mortgage Current Account operates like a normal current account. You get a chequebook and debit card and can set up standing orders and Direct Debits.

Most importantly, you can choose when to borrow, how to spend your money and how to pay it back.

* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Link to previous articles:
Barclays Woolwich Mortgages: Buy to Let Mortgage
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages

Barclays Woolwich: Buy to Let Mortgage

2008-01-13T23:58:00.000Z
Fancy yourself as a landlord? With our range of BTL deals, owning your own investment property has never been easier. And we’re sure you’ll find a mortgage that’s right up your street.

The basics:

• Mortgages you don’t need a degree to understand.

• Choose to borrow in your private name (whether you are a UK Resident, Non Uk-Resident or Expatriate), as a combination of private individuals (up to 4 applicants allowed), as a Special Purpose Vehicle (SPV) Limited Company or a Limited Liability Partnership (LLP). A SPV Limited Company may be an attractive option if you’re looking for an alternative investment vehicle.

• Borrow up to 85% loan to value (based on purchase price or valuation whichever is lower) on selected products.

• Mortgages can be for 5 to 25 years.

• Choose repayments on an interest-only and/or capital repayment basis.

• We'll consider loan of £35,000 up to £2.5 million on an individual property.

• Borrow on an unlimited number of properties within our BTL cap of £5m million (subject to formal approval).

• You can choose from a range of BTL Mortgage products including Fixed, Tracker and Switch and Save® Remortgage options. See our latest deals.

• Overpayments up to 10% can be made without incurring an early repayment charge (terms and conditions apply to certain products).

• We don’t have a maximum age restriction, but you will need to be at least 21.

• All mortgages are portable so you can move your BTL mortgage to another BTL property.

Rental cover:

Your property will need to generate sufficient annual rental income to cover your annual interest mortgage payment. The rent cover we will require is 120% calculated on the initial pay rate of the product you select.

General advice:

Owning an investment property is very different to owning your own home; you’re effectively running a small business and therefore need to research, plan and manage carefully to ensure the best possible chance of success.

Remember:

• BTL should be viewed as a long-term investment opportunity - the value of property can go down as well as up.

• Ensure you thoroughly research a prospective property and seek advice from local letting agents about its suitability for letting, level of current demand and anticipated rental income. Consider potential for other letting methods.

• Consider all the costs which may be involved (such as solicitors' fees, stamp duty, letting agency and management fees, building insurance, ground rent/service charge for leasehold flats, maintenance/repairs to the property) into your calculations.

• Consider the implications on your tax affairs. We recommend you consider taking professional tax advice from an accountant or discussing with your tax office.

• Make provisions for how you would make your monthly BTL mortgage repayments in the event of your BTL property being empty, your tenants failing to pay or if interest rates rise.

• You’ll need to arrange insurance that’s specifically for landlords. Find out more about Buy to Let insurance from Barclays.

Ready to apply?

Call 0845 075 7070* or speak to a mortgage adviser in your local Barclays branch.
Please read our tariff of charges. This information must be read in conjunction with our legal information.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. To maintain a quality service, we may monitor or record phone calls. Read call charges info. Link to previous articles:
Case Study Example: Barclays Woolwich Offset Mortgage
Barclays Woolwich Offset Mortgage
Barclays Woolwich Remortgaging
Barclays Woolwich: Fixed Rate buyer mortgages
Barclays Woolwich: First-time buyer mortgages
Barclays Woolwich Mortgages: Buying your first home

Case Study Example: Barclays Woolwich Offset Mortgage

2008-01-11T12:42:00.000Z

Case study: Sarah and Simon's story

"We've cut years and thousands of pounds off our mortgage.

"We had an £87,000 repayment mortgage and £7,000 savings. We wanted to be able to get at our savings if we needed to, but use them to our advantage in the meantime.

"So we took an Offset Mortgage. This means we offset our savings against what we owe. So we only pay interest on the difference between the two amounts: £80,000. This is saving us a total of £15,736.75** in interest on our original mortgage term, meaning we could pay it off three years and nine months early.

"The great thing is that our current, savings and mortgage accounts are still kept completely separate and we can have instant access to our savings if we need them."

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
This case history is fictitious but illustrates how this could work for you.
Please read the tariff of charges. This information must be read in conjunction with our legal information.

* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Read call charges info.

** This is only true if your savings are not touched and the interest rate remains the same throughout the term. Link to previous articles:
Barclays Woolwich Offset Mortgage
Barclays Woolwich Remortgaging
Barclays Woolwich: Fixed Rate buyer mortgages
Barclays Woolwich: First-time buyer mortgages
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging

As available on Barclays Woolwich website

Barclays Woolwich Offset Mortgage

2008-01-10T00:33:00.000Z
Looking for a bigger place or just a better mortgage deal? With our Offset Tracker you could reduce the life of your mortgage term by up to 8 years 8 months or save up to £47,772** in interest.
You benefit from a low tracker rate and get to offset your savings and current account against the total amount you owe. Take a look at our latest deal below.

Offset Tracker mortgage

• Barclays Bank Base Rate + 0.48%, currently 5.98%, for the term of the mortgage. The overall cost for comparison is 6.2% APR.

• Application fee: £595

• No early repayment charge

With Offset Tracker mortgage mortgage you can:

• Borrow up to 80% of the value of your home.

• Repay any amount without incurring an Early Repayment Charge.

• Choose to set up a Mortgage Reserve, which allows further borrowing at mortgage rates (a Mortgage Reserve is a secured overdraft that enables you to borrow against the equity in your home).

• Make overpayments.

• Make underpayments or take a payment holidays (subject to a Mortgage Reserve). Interest will be charged during the payment holiday period.

** Calculation based on the above product; repayment mortgage of £100,000 over a 25-year term that has been offset with £20,000 savings, resulting in a reduction in mortgage term of 8 years 8 months or a saving of £47,772 in overall interest. Calculation assumes balance remains constant throughout the life of the mortgage and that the mortgage loan and savings balance will vary. Outcomes will be either a reduction in payments or a reduction in mortgage term. No interest is paid on balances offset against the mortgage.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Please read the tariff of charges. This information must be read in conjunction with our legal information.
* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Link to previous articles:
Barclays Woolwich Remortgaging
Barclays Woolwich: Fixed Rate buyer mortgages
Barclays Woolwich: First-time buyer mortgages
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home

Barclays Woolwich Remortgaging

2008-01-09T02:17:00.000Z
You've had your mortgage for a while, it's no longer competitive or your current mortgage deal is coming to an end. Does this sound like you?
If so take a look at our range of Woolwich Switch & Save® mortgages below. You could make big savings with a far better deal.

10-year fixed Remortgage Plan

5.89% until 30 April 2018, then for the remaining term Barclays Bank Base Rate + 0.95%, currently 6.45% The overall cost for comparison is 6.3% APR†. More Details on Barclays Woolwich 10-year fixed Remortgage Plan….

Lifetime Tracker Remortgage Plan

Barclays Bank Base Rate + 0.47%, currently 5.97%, for the term of the mortgage. The overall cost for comparison is 6.1% APR†.More Details on Barclays Woolwich Liftime Tracker Remortgage Plan….

Mortgage Reserve

Take advantage of a Mortgage reserve - a convenient way of freeing up some cash by enabling you to borrow money at mortgage rates of interest. More Details on Barclays Woolwich Mortgage Reserve….

† Important information

Lifetime Tracker: Offers a non-disclosed valuation and either no fees for in-house legal services or £200 cashback. No application fee. No early repayment charge. Borrow up to 80% of the value of your home.

10-year fixed rate: Offers a non-disclosed valuation and either no fees for in-house legal services or £200 cashback. Application fee: £995. Early repayment charge: 6% of the balance repaid if the mortgage is repaid in whole, part or transferred to another scheme before 30 April 2018. Borrow up to 80% of the value of your home.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Please read our tariff of charges. This information must be read in conjunction with our legal information.
* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Link to previous articles:
Barclays Woolwich: Fixed Rate buyer mortgages
Barclays Woolwich: First-time buyer mortgages
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home

Barclays Woolwich: Fixed Rate buyer mortgages

2008-01-08T02:36:00.000Z
A fixed rate mortgage could be the perfect deal if you're unsure which way interest rates are going.

They also help if you're planning ahead or working to a budget. Fixed rate mortgages mean you know exactly what your monthly repayments will be - perfect for the control freak in you.

What the fixed rate mortgages offer:

• Fully flexible mortgages you don't need a degree to understand.

• The option of a Mortgage Reserve, allowing additional borrowing at standard variable rate.

• Subject to the availability of a Mortgage Reserve, you could apply for a payment holiday or make overpayments or underpayments.

• Choose from a range of fixed rates, subject to availability.

• The comfort of knowing how much you'll pay.

• After the fixed rate period your mortgage will switch to a competitive rate linked to the Barclays Bank Base Rate.

1-year Fix and Track

5.49% until 30 April 2009, then for the remaining term Barclays Bank Base Rate + 0.39%, currently 5.89%. The overall cost for comparison is 6.1% APR. Application fee: £995. Borrow up to 80% of the value of your home.

2-year fixed rate

6.09% until 30 April 2010, then for the remaining term Barclays Bank Base Rate + 0.95%, currently 6.45%. The overall cost for comparison is 6.7% APR. Application fee: £995. Borrow up to 80% of the value of your home.

5-year fixed rate

5.95% until 30 April 2013, then for the remaining term Barclays Bank Base Rate + 0.95%, currently 6.45%. The overall cost for comparison is
6.5% APR. Application fee: £995. Borrow up to 80% of the value of your home.

10-year fixed rate

5.89% until 30 April 2018 then for the remaining term Barclays Bank Base Rate + 0.95%, currently 6.45%. The overall cost for comparison is 6.3% APR. Application fee: £995. Borrow up to 80% of the value of your home.

Early Repayment Charges:

1-year Fix and Track: 1% of the balance repaid will apply if the mortgage is repaid in whole, part or transferred to another scheme until 30 April 2011. This mortgage may be switched to any Woolwich fixed, or capped rate between 1 May 2009 and 30 April 2011 subject to availability at the time, without incurring an early repayment charge on the mortgage you are leaving.

2-year fixed rate: 3% of the balance repaid will apply if the mortgage is repaid in whole, part or transferred to another scheme until 30 April 2010. However, you can overpay up to 10% per year during the fixed rate period without incurring an early repayment charge.

5-year fixed rate: 3% of the balance repaid will apply if the mortgage is repaid in whole, part or transferred to another scheme until 30 April 2013. However, you can overpay up to 10% per year during the fixed rate period without incurring an early repayment charge.

10-year fixed rate: Early repayment charge: 6% of the balance repaid will apply if the mortgage is repaid in whole, part of transferred to another scheme until 30 April 2018. However, you can overpay up to 5% per year during the fixed rate period without incurring an early repayment charge.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Please read our tariff of charges. This information must be read in conjunction with our legal information.
• Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Call charges Apply. Link to previous articles:
Barclays Woolwich: First-time buyer mortgages
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages

Barclays Woolwich: First-time buyer mortgages

2008-01-04T03:49:00.000Z
Buying your first home can be daunting - not least taking your pick of the mortgages on offer. See our fixed rates for easier budgeting at the start of your mortgage.
At Woolwich, we offer all of our products to first time buyers, giving you maximum choice.
Barclays Woolwich current deals include:

2-year fixed rate

6.99% until 30 April 2010, thereafter reverting to the Barclays Bank Base Rate (which is variable) currently 5.50% + 0.95% = 6.45%. The overall cost for comparison is 6.8% APR.

• Borrow up to 95% of the value of your home.

• No application fee.

• Early repayment charge: 3% of the balance repaid until 30 April 2010.

Read our first-time buyer guide for help with everything from choosing the right street to securing your new home.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Please read our tariff of charges. This information must be read in conjunction with our legal information.
* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. Read call charges info. Link to previous articles:
Barclays Woolwich Mortgages: Buying your first home
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1

Barclays Woolwich Mortgages: Buying your first home

2008-01-03T05:44:00.000Z
Barclays Woolwich Mortgages: Buying your first home
Buying Your First Home:

Barclays is there to help you. Buying your first home can give you a lot to think about. Why not spread the load and take advantage of our experience when it comes to mortgages?

What Woolwich mortgages give you:

• Fully flexible mortgages you don't need a degree to understand.

• Plenty of choice.

• Fixed or variable rates.

• No higher lending charge (a fee sometimes charged by a lender when the amount you want to borrow is more than a given percentage of the value of the property).

Barclays Woolwich offers 2 kinds of Mortgages for first home buyers:

1. First-time buyer mortgages

Great fixed rate deals to guide you gently on to the property ladder. Details of

2. Fixed-Rate Mortgages

Designed so that you always know how much you'll pay each month. Details of

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Please read the tariff of charges for Barclays. This information must be read in conjunction with their legal information.
* Lines are open Monday to Friday 9am-8pm and Saturday 9am-2pm. Calls may be monitored and/or recorded for security and training purposes. call charges will apply. Link to previous articles:
Alliance Leicester :Guide to remortgaging
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster

Alliance Leicester Guide to remortgaging

2008-01-02T04:09:00.000Z
You may want to switch your mortgage to enjoy a better rate, or you may want to borrow extra money for some home improvements, but what is remortgaging really all about?
What is a remortgage?
Remortgaging is the process of moving your mortgage to a new lender without moving home – you just take a new mortgage to pay off your current one.
Why should you think about remortgaging?
By remortgaging you can take advantage of the current mortgage deals on offer, and…
…you could save money
Remortgaging is a great way to save money. Find out what interest rate you are paying on your current mortgage, and see if you could get a lower rate with Alliance & Leicester and save money.
…you could raise money
Remortgaging can help you release any money locked up in your home. If you are looking to raise a bit of extra cash for home improvements, a well deserved holiday or even a new car, remortgaging may be a cost effective option. And if you can also save money by lowering your interest rate, your mortgage payments could cost less than you think.
…you could consolidate your debt
Remortgaging, taking advantage of lower interest rates and borrowing a little extra can be a cost effective way to consolidate any expensive debt you may have e.g. credit and store cards or loans.
…you could avoid moving home
The news is full of rising house prices, so if a new home seems out of reach, why not improve your current home? You could remortgage to raise money to add an extension – you may increase the value of your home too!
When should I remortgage?
If you are coming to the end of your current deal – maybe a fixed or discount rate, or if you are paying your lenders Standard Variable Rate start thinking about remortgaging and saving money now.
The remortgage process
Step 1 Decide if and why you want to remortgage. Do you want to remortgage to borrow more money? If so you need to make sure there is enough equity in your property.
Or, do you want to save money or look for a better mortgage deal? Have a look at our range of mortgages or use our Quick Quote calculator to see if you could save money by remortgaging to Alliance & Leicester.
Step 2 Contact your current lender for a redemption statement, and do your maths! Make sure you will be better off by remortgaging, there will be fees and charges involved so make sure the savings outweigh the costs.
Step 3 Take a look at our mortgages and find a deal to suit your needs. View our mortgage range. If you are not sure what mortgage you want, we can help you choose

Step 4 Produce your Key Facts Illustration for your chosen mortgage – this will tell you everything you need to know to make a decision about your mortgage.
Step 5 Apply for your mortgage, call us on 0800 056 3254†
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
†Our lines are open 8am-9pm weekdays and 9am-5pm Saturdays. Calls are free from UK landlines although call charges may vary from mobile phones.
Mortgages are subject to status, valuation, availability and our lending policy. Link to previous articles:
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker

Alliance Leicester guide to moving home-2

2007-12-31T04:03:00.000Z
This is part II fo the article Alliance Leicester guide to moving home . Please read the first part before continuing with this one!
Apply for your mortgage

So, your offer has been accepted, now you need the mortgage. The sooner you apply for your mortgage the better.
Need help finding the mortgage for you? Read our Guide to mortgages or we can help you choose
Don’t forget, before you can exchange contracts, you need to have your mortgage in place with a formal offer from your lender.
Don’t forget insurance

Protect your investment - make sure your home is adequately insured. We can arrange insurance for your Buildings & Contents and sort out Life & Critical illness and Mortgage Payment Cover to protect you should you be unable to work due to accident, sickness or unemployment. Speak to your Mortgage Specialist for a quote.
What happens next?

When you have submitted your application we carry out various checks on you and your property. We will value your property to tell us how much it is worth for lending purposes. Some of our mortgages come with a FREE Basic Mortgage Valuation (FREE valuation means the valuation fee is paid to us with your application and we will then refund this to you on mortgage completion), but you may prefer to have a more detailed survey called a Homebuyers Report.
Making it all happen

The conveyancing
Conveyancing is the legal process of transferring a property from one person to another, so you should find a solicitor or licensed conveyancer to do the work for you.
Alternatively, Alliance & Leicester offer a conveyancing referral service which is managed and provided by Golds Panel Management.
Golds can offer: -
• A solicitors' firm quickly and easily, selected by a name you can trust.
• A verbal indicative quote from an advisor straightaway, with a written quote to follow.
• You can check your case 24 hours a day, 7 days a week, via online tracking.
• No completion - no fee, if you don't move, you don't pay the legal fees.
While we are processing your mortgage application, your conveyancer or legal representative will be working away too. They will carry out searches on your property and surrounding area and will organise the contracts between you and the seller.
Exchange contracts

This is the point where both the buying and selling parties sign their copies of the contract, which are exchanged by their respective legal representatives. This is also when you pay your deposit to your legal representative. You are now legally bound to proceed with buying the property, and if you do pull out the seller can keep your deposit.
Completion

Completion, the day you’ve been waiting for! This is where the balance of the money is transferred to you from your buyer, and your money is transferred to your seller. The deeds are given to the buyer, or their solicitor. And, most importantly, the keys are handed over allowing you to move into your new home.
Our guide to moving home is only relevant for buying a home in England and Wales

Existing mortgage customers changing their product will incur a Mortgage Review Fee of £250 unless otherwise stated.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

†Our lines are open 8am-9pm weekdays and 9am-5pm Saturdays. Calls are free from UK landlines although call charges may vary from mobile phones.

Mortgages are subject to status, valuation, availability and our lending policy.
Link to previous articles:
Alliance Leicester guide to moving home
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker

Alliance Leicester guide to moving home

2007-12-28T04:56:00.001Z
There’s a lot to think about when selling your home and moving to a new property. It can be very costly, and take a lot of time and effort. This guide is designed to help you make the process as stress free as possible.
Selling your home

Firstly you need to think about how much you are going to put your home on the market for. Be realistic, it’s a common mistake to overprice your property, so it helps to get information about similar properties in your area. Remember - your estate agent does not value your property, they just specify an asking price. If you want a 'true' valuation, you'll need a qualified surveyor.
It may also be a good idea to decorate your house when you decide to sell it. First impressions count and can affect how fast your home sells, and its sale price.
Once you have your asking price, it's time to advertise your home - if you are using an estate agent they will take care of this for you. A cheaper, and increasingly popular, alternative is to advertise your house on one of the many property websites available.
Now you need to wait for potential buyers to come and view your property. Depending on the market, this can be a lengthy process.
It helps to keep your home neat and tidy – buyers need to see the property not your clutter. Think about what you look out for when viewing properties and what turns you off, chances are your buyers look out for similar things.
From 10 September 2007, the law will require all sellers putting a home with three or more bedrooms on the market in England & Wales to provide a Home Information Pack.
Buying your new home

Your property is on the market, you may have already had some viewing or even some offers. If you haven’t already started, it’s time to start seriously looking for your next property.
Work out how much you can afford. Your circumstances have probably changed since you bought your current home, so take the time to work out your budget now.
Use our Borrowing calculator to give you an idea of how much you can afford to borrow.
Find a property

Finding the right home for you can be a long process, so check out the areas you are thinking of living in and visit local estate agents and use the internet to find properties for sale.
If your current home is already on the market, and you have an offer, you’re in a good position to start making offers on properties yourself, so when you have found the home you want – make an offer. Link to previous articles:
Alliance Leicester Guide: Buying your first home
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Alliance Leicester Guide: Buying your first home

2007-12-27T04:50:00.000Z
Buying your first home is a daunting task but it can be exciting too and Alliance & Leicester are committed to helping you every step of the way. To make life easier for first time buyers, we have provided you with a comprehensive guide for first time buyers and a list of the key steps to getting your first mortgage.
Firstly, why not take a look at our comprehensive Guide to Buying Your First Home which gives you advice and tips on topics such as working out much you can borrow right through to moving in to your new home.
So what do I do now?

If you already know what you want why not check out our Mortgage Interest Rates If you want more information then continue reading to find out more about the key steps to applying for a mortgage. Whatever stage you are at we are committed to helping you every step of the way.
Step 1 - Work out how much you can afford

Work out your budget and be realistic, it’s important that you think about everything else you have to pay out every month, not just your mortgage – things like bills, council tax and loans. It soon adds up.
Use our Borrowing calculator to give you a better idea of how much you can afford to borrow.
Step 2 - Find a property

If you haven’t already, you need to find a property! Finding the right home for you can be a long process, so check out the areas you are thinking of living in and visit local estate agents and use the internet to find properties for sale.
From 10 September 2007, the law will require all homes with three or more bedrooms, put on the market in England & Wales to have a Home Information Pack. For buyers, the Home Information Pack provides important information about the properties they are considering buying.
When you have found the home you want – make an offer.
Step 3 - Apply for your mortgage

So, your offer has been accepted, now you need the mortgage to buy it. The sooner you apply for your mortgage the better.
Need help finding the mortgage for you? Read our Guide to mortgages or we can help you choose
Don’t forget, before you can exchange contracts, you need to have your mortgage in place with a formal offer from your lender.
Don’t forget insurance

Protect your investment - make sure your home is adequately insured. We can arrange insurance for your Buildings & Contents and sort out Life & Critical illness and Mortgage Payment Cover to protect you should you be unable to work due to accident, sickness or unemployment. Speak to your Mortgage Specialist for a quote.
What happens next?

When you have submitted your application we carry out various checks on you and your property. We will value your property to tell us how much it is worth for lending purposes. Some of our mortgages come with a FREE Basic Mortgage Valuation (Free valuation means the valuation fee is paid to us with your application and we will then refund this to you on mortgage completion) but you may prefer to have a more detailed survey called a Homebuyers Report.
Making it all happen - the conveyancing

Conveyancing is the legal process of transferring a property from one person to another, so you should find a solicitor or licensed conveyancer to do the work for you.
Alternatively, Alliance & Leicester offer a conveyancing referral service which is managed and provided by Golds Panel Management.
Golds can offer: -
• A solicitors' firm quickly and easily, selected by a name you can trust.
• A verbal indicative quote from an advisor straightaway, with a written quote to follow.
• You can check your case 24 hours a day, 7 days a week, via online tracking.
• No completion - no fee, if you don't move, you don't pay the legal fees.
While we are processing your mortgage application, your conveyancer or legal representative will be working away too. They will carry out searches on your property and surrounding area and will organise the contracts between you and the seller.
Exchange contracts

This is the point where both the buying and selling parties sign their copies of the contract, which are exchanged by their respective legal representatives. This is also when you pay your deposit to your legal representative. You are now legally bound to proceed with buying the property, and if you do pull out the seller can keep your deposit.
Completion

Completion, the day you’ve been waiting for! This is where the balance of the money is transferred from buyer to seller. The deeds are given to the buyer, or their solicitor. And, most importantly, the keys are handed over allowing you to move into your new home.
Our guide to buying your first home is only relevant for buying a home in England and Wales
Existing mortgage customers changing their product will incur a Mortgage Review Fee of £250 unless otherwise stated.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
†Our lines are open 8am-9pm weekdays and 9am-5pm Saturdays. Calls are free from UK landlines although call charges may vary from mobile phones.
Mortgages are subject to status, valuation, availability and our lending policy.
Link to previous articles:
Guide to Alliance & Leicester Mortgages
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Guide to Alliance & Leicester Mortgages

2007-12-26T04:23:00.000Z
Whether you are a first time buyer or already have a mortgage, the sheer number of mortgages available could leave you a little confused.
At Alliance & Leicester we understand that everyone’s circumstances are different. You may want lower repayments in the early years, or the certainty of a fixed rate. You might want a greater level of flexibility, or you may not have any idea at all! That’s why we’ve produced this handy guide to help you understand the different types of mortgages available.
1. Paying your mortgage back

Despite all the different types of mortgage schemes and deals available, there are still just two basic ways of repaying your mortgage available:
• Repayment mortgage (capital and interest)
• Interest only mortgage

Repayment mortgage
This type of repayment method is also known as a Capital & Interest mortgage - your monthly repayments pay off the interest and some of the capital borrowed each month. This is the only method that ensures your mortgage is totally paid off by the end of the term – as long as you keep up your payments.

Interest Only mortgages

This is where you only repay the interest on your mortgage each month, so you’ll need some sort of investment plan to pay off the capital, e.g. a pension, an endowment policy, an ISA or other long term investment plan. When your investment matures, you cash in the plan and use it to pay off your mortgage loan. You are responsible for the repayment of the capital when the mortgage reaches the end of the term, and you may want to seek professional advice on the investment.
You can also combine these two methods, called Part & Part, so part of your mortgage would be interest only, and the remaining part would be repayment.
2. Types of mortgage products

Discount mortgages

The rate of interest you pay is set at an amount below the lender’s standard variable rate (SVR), and the rate you pay moves up or down in line with any changes to the SVR. This type of loan is cheaper than Standard Variable Rate at the start of your mortgage and allows you to take advantage of any interest rate cuts. But if interest rates rise, your monthly payments go up.
Most people find that buying a home – and especially their first – leaves them financially stretched. With the extra expense of decorating and furnishing, anything that keeps costs down in the first years can be a big help. That’s exactly what a discount mortgage does.
The discount you enjoy in the first few years of your mortgage can mean a big saving, and the discount usually means you are tied into your mortgage during the discount period. So, if you change your plans and need to repay your mortgage during the discount period, you will have to pay an Early Repayment Charge. However if you simply want to move house, you can usually take your mortgage with you.

Fixed Rate mortgages

The rate of interest on your mortgage is fixed for a set period of time regardless of whether the Bank of England Base Rate or the lender’s Standard Variable Rate changes.
Most mortgages have rates that change over time - and repayments that go up as well as down. This can make budgeting difficult, but a fixed rate mortgage can help. Fixed rate mortgages are suitable for those who prefer to know exactly what their monthly outgoings will be.
There may be minor variations in your monthly payments to cover insurance, but your mortgage interest rate will stay fixed no matter what happens to mortgage rates elsewhere. An Early Repayment Charge may apply if the mortgage is repaid during the fixed period.
Remember, if interest rates fall, you may miss out on a reduction in your monthly payments.

Cashback mortgages

You receive a lump sum or percentage of your loan in cash when you complete your mortgage.

Tracker mortgages

Your mortgage interest rate is linked to the Bank of England’s base rate for a set period. So if the base rate goes up so will the rate of interest you will have to pay on your mortgage, but if the base rate falls so will your monthly repayments.

Flexible mortgages

This type of mortgage is designed to accommodate your changing financial needs. It may allow you to overpay, underpay or even take payment holidays. You may also be able to make penalty free lump sum repayments.
3. Protect your investment

Don’t forget insurance to make sure your home is adequately insured. We can arrange insurance for your Buildings & Contents and sort out Life & Critical illness and

Mortgage Payment Cover to protect you should you be unable to work due to accident, sickness or unemployment. Speak to a mortgage specialist for a quote.
Existing mortgage customers changing their product will incur a Mortgage Review Fee of £250 unless otherwise stated.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
†Our lines are open 8am-9pm weekdays and 9am-5pm Saturdays. Calls are free from UK landlines although call charges may vary from mobile phones.
Mortgages are subject to status, valuation, availability and our lending policy. Link to previous articles:
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan

Alliance & Leicester Mortgage Loans FAQ -2

2007-12-24T04:48:00.001Z
Continuing further from the part 1 of the Alliance & Leicester Mortgage Loans FAQ, following is the remaining set of questions

Q. Are there any age restrictions on making an application?

A. To apply for a mortgage with Alliance & Leicester you must be at least 18 years of age. If your income is needed to support the loan, you should be aged no more than 75 at the end of your mortgage term. For example, if you are taking a mortgage over a 25 year term, the oldest you should be is 50 years old.
Q. How do I repay Capital with an Interest Only Mortgage?

A. An interest only mortgage is where you only repay the interest on your mortgage debt each month. Alongside this you will need to put money into a separate investment vehicle which is designed to grow sufficiently to pay off your loan when your mortgage comes to an end. You are responsible for the repayment of the capital when the mortgage reaches the end of its term. You may want to seek professional advice on the investment vehicle.

Any capital repayments you make during the term of your mortgage are subject to the terms and conditions of your mortgage product and there may be an Early Repayment Charge.
Q. Can I borrow money to buy a property abroad?

A. Alliance & Leicester will lend on properties situated in England, Wales, Scotland and Northern Ireland only.
Q. Can I have a ‘buy-to-let’ mortgage with Alliance & Leicester?

A. Alliance & Leicester does not arrange mortgages for buy to let or commercial properties.
Q. Does Alliance & Leicester offer a conveyancing referral service?

A. Alliance & Leicester offer a conveyancing referral service which is managed and provided by Golds Panel Management. Golds can refer you to an approved solicitors' firm quickly and easily and give you an idea of the likely costs involved straightaway.
Q. What is a HIP (Home Information Pack) and what does it contain?

A. From 10 September 2007, the law will require all homes with three or more bedrooms, put on the market in England & Wales to have a Home Information Pack. The HIP is a set of documents providing important information about a property, such as its energy efficiency and other information to help the home buying and selling process. For more information visit Home Information Packs (Link to http://www.homeinformationpacks.gov.uk). Link to previous articles:
Alliance & Leicester Mortgage Loans FAQ-1
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan

Alliance & Leicester Mortgage Loans FAQ

2007-12-21T04:13:00.000Z
Q. How do I know which mortgage is right for me?
A. Alliance & Leicester offer a range of mortgages, so you should be able to find one to suit your needs. If you need help choosing a mortgage read our guide to mortgages or we can help you choose. For advice and a recommendation based on your personal circumstances, make an appointment with a Mortgage Advisor at your nearest branch who will be happy to discuss your requirements.
Q. How much can I borrow?
A. For a quick estimate use our Borrowing Calculator.
Q. How much will my mortgage cost?
A. The cost of your mortgage depends on a number of things - how much you want to borrow, how long you need the mortgage for and the mortgage you choose. To find out more get a Quick Quote and produce your personal Key Facts Illustration which will show you all the costs of your mortgage.
Q How do I apply for a mortgage?
A. To apply for a new mortgage just call us on 0800 056 3254†, or book an appointment at your local branch.
Q. What is Mortgage Transfer Service?
A. Our Mortgage Transfer Service takes care of the legal administration work and costs when you transfer your mortgage to us from your current lender. This means there is no need to appoint a solicitor as the company we use, 'First Title', take care of this. This makes the process as hassle-free as possible.
First Title will get to work as soon as we receive your completed application. All you have to do is check, sign, and then return the documents they send to you.
Should any additional work be required such as registering a change of name, then a fee would be payable by you. Please ask for details.
Q. How much will my mortgage application cost?
You will need to pay a Valuation Fee at the time of application, if you have chosen a mortgage that offers a free valuation; the fee will be refunded to you on completion. The cost of your Valuation depends on the value of your property and the type of valuation you choose.
If you choose a mortgage with a Product Fee and you produce your Key Facts Illustration for your mortgage online this fee will be automatically added to your mortgage on completion. If you prefer, you will be able to pay the Product Fee when your mortgage completes.
Produce your Key Facts Illustration to highlight all costs associated with your mortgage.
Q. Free Valuation - what do I get?
A. On some of our mortgages we offer a free Basic Mortgage Valuation. This means that your house will be valued for mortgage purposes only - to check that the property is worth the amount of money we are lending you. You must pay for this valuation up front and it will then be refunded on completion of your mortgage with us. You are only entitled to one free valuation per application.
If you would prefer to have a more in-depth survey you can have a Homebuyer Survey & Valuation. There is an extra charge for this type of valuation. We will not refund the equivalent cost of the Basic Valuation.
If you are remortgaging then you will not receive a copy of the valuation report. Also in some circumstances Alliance & Leicester may use alternative valuation methods, which include the use of limited external appraisals or computer based data, to establish the value of the property.
Valuation costs are as follows and include an administration charge of £125

As a Basic Mortgage Valuation Report (refunded on completion) As part of a Homebuyer Survey & Valuation
Purchase Price/Valuation £ £
Not exceeding £25,000 220 425
Not exceeding £50,000 220 425
Not exceeding £75,000 250 425
Not exceeding £100,000 250 425
Not exceeding £125,000 280 460
Not exceeding £150,000 280 460
Not exceeding £175,000 320 510
Not exceeding £200,000 320 510
Not exceeding £250,000 340 575
Not exceeding £300,000 370 625
Not exceeding £400,000 430 725
Not exceeding £500,000 530 825
Not exceeding £750,000 670 950
Not exceeding £1,000,000 820 1,100
Exceeding £1,000,000 1,070 1,570

Q. What will the 10% Overpayments facility allow me to do?
A. Many of our mortgages let you pay off up to 10% of your mortgage balance each year without being charged the Early Repayment Charge that applies on the product. You can pay up to 10% as a lump sum in January of every year. This gives you the opportunity to reduce your outstanding mortgage balance and reduce your monthly payments.
Link to previous articles:
Alliance Leicester Mortgage Jargon Buster
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan
Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage

Alliance Leicester Mortgage Jargon Buster

2007-12-20T04:29:00.000Z
A
Advance
A mortgage loan.
APR (Annual Percentage Rate)
The total cost of a loan, including interest charges and product fees, shown as a percentage rate. The calculation assumes that you maintain the mortgage for the full term. APR is an industry standard calculation and enables direct comparison of mortgages from all lenders.
Arrangement fee
See Product Fee
Assignment
The transfer of ownership of an insurance policy or a lease.
B
Balance Outstanding
The amount of loan owed at a particular time.
Bank of England Base Rate
The Bank of England set a rate each month known as the 'Base Rate'. Banks and Building Societies use the Base Rate to set the interest rates they pay on deposits, or charge on debts.
Bridging Loan / Bridging Finance
A temporary loan advanced to help somebody buy a new property before they have sold their existing one.
Buildings Insurance
Insurance against the cost of rebuilding a property from scratch following structural damage, for example by flood, fire or storm.
Building Regulations
The health and safety requirements that any new construction must meet.
Building Society
A mutual institution owned by its investors and borrowers that provides a range of savings and mortgages.
C
Capital and Interest Mortgage
See Repayment Mortgage
Cashback Mortgage
You receive a lump sum or a percentage of your mortgage in cash when you complete your mortgage.
Charge
An interest in the ownership of a property; usually a mortgage or some other debt secured against the property.
Completion (Date of Entry in Scotland)
End of the purchase process. The seller moves out, the buyer moves in and ownership is transferred.
Conclusion of Missives
Final part of the contract process in Scotland.
Contents Insurance
Insurance against accidental damage or theft of all moveable contents, including furniture, appliances and soft furnishings.
Contract
A document that describes the agreement under which the property will change hands.
Conveyancer
A person other than a solicitor who may conduct the conveyancing.
Conveyancing
The process of transferring property from one party to another, usually managed by a solicitor or a licensed conveyancer.
Covenant
A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.
Credit Scoring
Lenders often use a system called credit scoring to help them decide whether to lend to you. They ask a series of questions about you and your finances and score your answers. Depending on your score you will be accepted or declined.
D
Debt Consolidation
The process of combining outstanding debts e.g. loans, credit cards etc, into one loan.
Deeds
Legal documents that show who owns a property or piece of land.
Deposit
Sum of money which the buyer puts down to secure the mortgage loan after exchange of contracts, usually 5 to 10 per cent of the purchase price.
Direct Debit
A Direct Debit is an instruction from a customer to an originator authorising their bank or building society to make regular collections direct from their account.
Disbursements
All the various costs for carrying out the legal work in relation to buying or remortgaging your home.
Discharge
Paying off a mortgage.
Discount Mortgage
A discount offered by mortgage lenders to borrowers, reducing monthly mortgage repayments often for the first two or three years of the loan period.
E
Early Repayment Charge
A charge payable on some mortgages if they are repaid early (during an Early Repayment Charge period). The amount depends on the mortgage outstanding and the terms of the mortgage.
Easement
A legal right over land, for example the right to access a specified area of land, such as a right of way.
Equity
The difference between the value of a property and the amount of mortgage and/or secured loans owed.
Exchange of contracts
The point at which both buying and selling parties sign their copies of the contract which are exchanged by their respective legal representatives and are legally binding. The buyer usually pays a deposit at this point and the date of completion is agreed.
F
Financial Services Authority (FSA)
The regulatory authority for the UK financial services industry. The FSA has taken over the regulation of mortgages and all lenders and mortgage intermediaries must be directly authorised and regulated by the FSA, or must be an appointed representative of an authorised firm.
Fixed rate mortgage
A mortgage where the interest rate payment is fixed for a specific time. It then normally reverts back to a variable rate.
Fixtures and Fittings
All non-structural items included in the purchase of a property.
Flexible Mortgage
An arrangement enabling the mortgage borrower to overpay, and with the overpayments that have been built up, borrow money back, take payment holidays or pay less in some months.
Freehold
Legal title that gives you absolute ownership of the land your property is on.
Full Structural Survey
A full structural survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden.
Further Advance
An additional loan to your existing mortgage taken after the main mortgage has completed which is also secured against the property.
G
Gazumping
When a seller pulls out of a sale after accepting a higher offer.
Gazundering
A tactic whereby the buyer offers less than the agreed price just before exchange of contracts.
Ground Rent
The annual fee which a leaseholder pays to a freeholder.
Guarantor
A guarantor is someone who guarantees to pay your mortgage if you can't or won't for any reason.
H
Higher Lending Charge
This charge is payable (usually added on to your loan) if you borrow more, for example, than 90% of the valuation or purchase price of your property.
Home Buyers Report
This is an intermediate-level survey which is usually offered by the mortgage lender and prepared by their own surveyor. The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but it does not involve in-depth investigation or the testing of water, drainage or heating systems.
Home Contents Insurance
A policy insuring household contents against theft and damage.
Home Envirosearch
A report on detailed flood, subsidence and land contamination history for each UK neighbourhood.
Home Information Pack (HIP)
This is a set of documents providing important information about a property, such as its energy efficiency, boundary ownership, evidence of title and planning permissions. For more information visit Home Information Packs
I
IFA
Independent Financial Advisor.
IDD / Initial Disclosure Document
This is a document designed to assist you in comparing the services provided and the fees and charges made by lenders and intermediaries.
Interest Only Mortgage
This is where you only repay the interest on your mortgage debt each month. Alongside this you will need to put money into a separate investment vehicle which is designed to grow sufficiently to pay off your loan when your mortgage comes to an end. You are responsible for the repayment of the capital when the mortgage reaches the end of its term. You may want to seek professional advice on the investment vehicle.
J
Joint Mortgage
A mortgage where there is more than one named individual responsible for the contract.
Joint Tenants
A form of ownership frequently used by couples which ensures that when one dies, the property passes automatically to the other. The alternative is Tenancy in Common
K
Key Facts Illustration (KFI)
This document contains key mortgage information which is designed to help you compare the costs and features of different mortgages from one or more lenders. It is designed to make it easy to compare mortgages at a glance.
L
Land Certificate
A Land Registry certificate proving ownership of a property.
Land Registry
A government organisation that holds records of all registered properties in England and Wales.
Land Registry Fee
A fee paid to the Land Registry to register your details if you have bought a property or changed mortgage lenders.
Leasehold
To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord.
Life Assurance
Insurance which pays out on the death of the policy holder. Policies can run alongside your mortgage and will pay off all or part of the outstanding debt in the event of your death.
Local Authority Search
A search of the local area to highlight anything that may impact on the property or surrounding area, e.g. planned road building, planning permissions etc
Loan to Value (LTV)
The amount of mortgage expressed as a percentage of the property value. For example, if your mortgage amount was £80,000 and your property is valued at £100,000 your loan to value, or LTV, is 80%.
M
Monthly Interest
A method of calculating mortgage interest on a monthly basis.
Mortgage Deed
A legal document relating to the mortgage lender's interest in the property.
Mortgage Indemnity Guarantee
See Higher Lending Charge
Mortgage Offer
Sum of money that the lender offers to lend you to pay for a property.
Mortgage Payment Cover (MPC)
This is insurance designed to pay your monthly mortgage payment for a limited period, usually a year, if you are unable to work through illness, accident or redundancy.
Mortgage Review Fee
There may be a fee when you change your existing Alliance & Leicester mortgage to another product.
Mortgage Term
The length of time over which the mortgage is to be repaid. Often this is 25 years - but it can be shorter, or in some cases for longer periods of time.
N
Negative Equity
When the value of the mortgage which is outstanding on the property, is more than the market value of the property.
NHBC
National House Building Council. A warranty scheme for new properties providing cover against major structural defects for 10 years.
O
Ombudsman
An independent professional body which is set up by law to help settle individual disputes between consumers and firms, for example, estate agents, solicitors and insurance companies.
Originator
An originator is any party who 'originates' a Direct Debit, i.e. the Direct Debit comes from that party. For example, if you pay your Council Tax by Direct Debit, your Council would be the originator of the Direct Debit.
P
Planning Permission
The permission granted by the local planning authority (usually the local council) for any new building or engineering operations or change of use of a building if it meets the public's interest.
Premium
The amount you pay regularly, monthly or annually, to an insurer for an insurance policy.
Private Sale
Sale of a property without the use of an estate agent.
Product Fee
There may be a fee involved when you apply for a mortgage. This is to reserve the mortgage and to cover administration costs.
R
Remortgage
The process of moving your mortgage without moving home. You take a new mortgage with a different lender to pay off your old mortgage.
Repayment Mortgage
Also known as a Capital and Interest mortgage. Your monthly payments pay off the interest and some of the capital borrowed. By the end of the term of your mortgage you will have paid off all your mortgage debt.
Repayment Type
How you pay back your mortgage. See Repayment Mortgage or Interest Only Mortgage.
Retention
Holding back part of a mortgage loan until any repairs to the property are satisfactorily completed.
S
Sole Agency
The choice of a single estate agent to act on the seller's behalf.
Solicitor
Legal expert handling all documentation for the sale and purchase of a property.
Stamp Duty
A tax you must pay on a property when you buy it. The duty must be paid at the point of completion.
Subject to Contract
Words to indicate that an agreement is not yet legally binding.
Survey
A thorough report on the property you are planning to buy
Surveyor
Person who conducts the survey.
T
Tenants
People living in a property on a non-ownership basis.
Tenancy in Common
A form of ownership by two or more people in which, if one dies, their share of the property forms part of their estate and does not automatically pass to the other(s).
Title
The record of ownership of a property, the evidence of which is found in the title deeds.
Total Amount Payable
The total cost of repaying a mortgage.
Tracker Mortgages
Tracker mortgage normally follow movements in the base rate set by the Bank of England. The interest rate is then set at a constant level above or below the base rate, rising and falling in line with any changes during the tracking period. This means that if the base rate falls, the amount you pay falls. Likewise, if the base rate goes up, so will your payments. Tracker mortgages tend to be for a set period of time, say five years, after which you usually transfer to a new tracker rate, or to a different type of rate altogether.
Transfer Deeds
The Land Registry document that transfers legal ownership from seller to buyer.
Transfer of Equity
Adding or removing a party to/from a mortgage.
U
Under Offer
A term applied to a property for which the seller has provisionally accepted the buyer's offer.
V
Valuation
A valuation of the property for mortgage purposes to ensure that the property is worth the amount requested for a mortgage
Valuation Fee
The charge for the valuation of the property.
Variable Interest Rate
Rate of interest payment that fluctuates over time with general interest rates.
Vendor
The seller of a property or piece of land.
Existing mortgage customers changing their product will incur a Mortgage Review Fee of £250 unless otherwise stated.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
†Our lines are open 8am-9pm weekdays and 9am-5pm Saturdays. Calls are free from UK landlines although call charges may vary from mobile phones.
Mortgages are subject to status, valuation, availability and our lending policy.YOU MUST READ THESE FACTS IN CONJUNCTION WITH IMPORTANT INFORMATION
Link to previous articles:
Alliance Leicester Lifetime Base Rate Tracker
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan
Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage
Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan

Alliance Leicester Lifetime Base Rate Tracker Mortgage Plan

2007-12-19T05:20:00.000Z
Mortgage Plan : Alliance Leicester Lifetime Base Rate Tracker Mortgage Plan

Initial Interest Rate: 6.39%

Rate for remaining term (Variable): 6.39%

Overall cost of comparison (APR): 6.7%

Early repayment charges Apply?: No

Product Fee: £999

Tracks the Bank of England Base Rate (+0.64%) for the term of the mortgage

Loans available between £25,000 and £250,000. Link to previous articles:
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan
Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage
Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker FeeSaver

Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

2007-12-18T04:13:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Initial Interest Rate: 6.24% for two years

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes *

Product Fee: £999

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.49%.

Then Bank of England Base Rate +2.14% for the remainder of the term (variable)

10% Overpay facility.

Loans available between £25,000 and £250,000.

*Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 5% of the amount repaid. Link to previous articles:
Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan
Alliance Leicester 2 Year Fixed Mortgage Plan
Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage
Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker FeeSaver
Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%

Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

2007-12-17T03:54:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Initial Interest Rate: 5.94% for two years

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes *

Product Fee: £1,999

Loans available between £25,000 and £250,000.

*Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 5% of the amount repaid.

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.19%.

Then Bank of England Base Rate +2.14% for the remainder of the term (variable)

10% Overpay facility. Link to previous articles: Alliance Leicester 2 Year Fixed Mortgage Plan
Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage
Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker FeeSaver
Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%
Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan

Alliance Leicester 2 Year Fixed Mortgage Plan

2007-12-14T03:46:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Fixed Mortgage Plan

Initial Interest Rate: 6.19% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes *

Product Fee: £999

Loans available between £25,000 and £250,000, fixed until 30 November 2009.

Then Bank of England Base Rate +2.14% for the remainder of the term (variable)

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 5% of the amount repaid.
Link to previous articles: Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage
Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker FeeSaver
Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%
Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan
Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan

Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage

2007-12-13T04:31:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage

Initial Interest Rate: 5.98% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes *

Product Fee: £1,999

Loans available between £25,000 and £250,000, fixed until 30 November 2009.

Then Bank of England Base Rate +2.14% for the remainder of the term (variable)

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 5% of the amount repaid.

Link to previous articles: Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan
Alliance Leicester 2 Year Base Rate Tracker FeeSaver
Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%
Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan
Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 5 Year Fixed Max LTV 90%

Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan

2007-12-12T03:59:00.000Z
Mortgage Plan : Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan

Initial Interest Rate: 6.19% for five years

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.4%

Early repayment charges Apply?: No

Product Fee: £149

Typical features: Discount Mortgage from Alliance Leicester with No Pre-payment charges

Lower repayments for the first five years with a discount of 1.70% off our Standard Variable Rate.

Loans available between £25,000 and £999,999.

Fully Flexible - you can overpay, and with the overpayments you build up, you can borrow money back, take payment holidays, or pay less in some months.

Link to previous articles: Alliance Leicester 2 Year Base Rate Tracker FeeSaver
Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%
Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan
Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 5 Year Fixed Max LTV 90%
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan

Alliance Leicester 2 Year Base Rate Tracker FeeSaver

2007-12-11T04:18:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Base Rate Tracker FeeSaver

Initial Interest Rate: 6.24% for two years

Rate for remaining term (Variable): 6.74%

Overall cost of comparison (APR): 6.9%

Early repayment charges Apply?: Yes*

Product Fee: £0

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.49%.

Then Bank of England Base Rate 2.14% for the remainder of the term (variable)

Loans available between £25,000 and £999,999.

FREE Valuation (The valuation fee is paid to us with your application and then refunded upon completion of the mortgage).

Remortgage customers can select our Mortgage Transfer Service or £250 cashback.

Fully Flexible - you can overpay, and with the overpayments you build up, you can borrow money back, take payment holidays, or pay less in some months.

*Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 3% of the amount repaid.
Link to previous articles: Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%
Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan
Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 5 Year Fixed Max LTV 90%
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 3 Year Fixed Max LTV 90%

Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%

2007-12-10T03:51:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%

Initial Interest Rate: 5.89% for two years

Rate for remaining term (Variable): 6.74%

Overall cost of comparison (APR): 6.8%

Early repayment charges Apply?: Yes*

Product Fee: £599

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.14%.

Then Bank of England Base Rate 2.14% for the remainder of the term (variable)

Loans available between £25,000 and £999,999.

Fully Flexible - you can overpay, and with the overpayments you build up, you can borrow money back, take payment holidays, or pay less in some months.

*Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 3% of the amount repaid.

Link to previous articles: Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan
Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 5 Year Fixed Max LTV 90%
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 3 Year Fixed Max LTV 90%
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan

Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90%

2007-12-07T07:37:00.001Z
Mortgage Plan : Alliance Leicester Premier 2 Year Base Rate Tracker Max LTV 90% Mortgage Plan

Initial Interest Rate: 5.89% for two years

Rate for remaining term (Variable): 6.74%

Overall cost of comparison (APR): 6.8%

Early repayment charges Apply?: Yes*

Product Fee: £499

Exclusive mortgage deals for new and existing Premier and Premier Direct Current Account customers taking out a new mortgage.

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.14%.

Then Bank of England Base Rate 2.14% for the remainder of the term (variable)

Loans available between £25,000 and £999,999.

Fully Flexible - you can overpay, and with the overpayments you build up, you can borrow money back, take payment holidays, or pay less in some months.

*Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 3% of the amount repaid.

Link to previous articles: Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 5 Year Fixed Max LTV 90%
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 3 Year Fixed Max LTV 90%
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan

Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan

2007-12-06T04:23:00.000Z
Mortgage Plan : Alliance Leicester 5 Year Fixed FeeSaver Mortgage Plan

Initial Interest Rate: 6.24% until 30/11/12

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.5%

Early repayment charges Apply?: Yes*

Product Fee: £0

Loans available between £25,000 and £999,999, fixed until 30 November 2012.

FREE Valuation (The valuation fee is paid to us with your application and then refunded upon completion of the mortgage).

Remortgage customers can select our Mortgage Transfer Service or £250 cashback.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2012 and pay a fee of 3% of the amount repaid.

Link to previous articles:
Alliance Leicester 5 Year Fixed Max LTV 90%
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 3 Year Fixed Max LTV 90%
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan
Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan

Alliance Leicester 5 Year Fixed Max LTV 90%

2007-12-05T04:02:00.000Z
Mortgage Plan : 5 Year Fixed Max LTV 90%

Initial Interest Rate: 5.99% until 30/11/12

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.4%

Early repayment charges Apply?: Yes*

Product Fee: £599

Loans available between £25,000 and £999,999, fixed until 30 November 2012.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2012 and pay a fee of 3% of the amount repaid.

Link to previous articles:
Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester 3 Year Fixed Max LTV 90%
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan
Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages

Alliance Leicester 3 Year Fixed FeeSaver Mortgage Plan

2007-12-04T04:37:00.000Z
Mortgage Plan : Alliance Leicester 3 Year Fixed FeeSaver

Initial Interest Rate: 6.24% until 30/11/10

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.7%

Early repayment charges Apply?: Yes*

Product Fee: £0

Loans available between £25,000 and £999,999, fixed until 30 November 2010.

FREE Valuation (The valuation fee is paid to us with your application and then refunded upon completion of the mortgage).

Remortgage customers can select our Mortgage Transfer Service or £250 cashback.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2010 and pay a fee of 3% of the amount repaid.

Link to previous articles:
Alliance Leicester 3 Year Fixed Max LTV 90%
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan
Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages
Alliance Leicester Premier Tracker mortgages

Alliance Leicester 3 Year Fixed Max LTV 90%

2007-12-03T06:17:00.001Z
Mortgage Plan : Alliance Leicester 3 Year Fixed Max LTV 90%

Initial Interest Rate: 5.99% until 30/11/10

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.7%

Early repayment charges Apply?: Yes*

Product Fee: £599

Loans available between £25,000 and £999,999, fixed until 30 November 2010.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2010 and pay a fee of 3% of the amount repaid.

Link to previous articles:
Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan
Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan
Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages
Alliance Leicester Premier Tracker mortgages
Alliance Leicester 2 Year Fixed mortgage Plan

Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan

2007-11-30T04:26:00.000Z
Mortgage Plan : Alliance Leicester 2 Year Fixed FeeSaver Mortgage Plan

Initial Interest Rate: 6.23% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes*

Product Fee: £0

Loans available between £25,000 and £999,999, fixed until 30 November 2009.

FREE Valuation (The valuation fee is paid to us with your application and then refunded upon completion of the mortgage).

Remortgage customers can select our Mortgage Transfer Service or £250 cashback.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 3% of the amount repaid.

Link to previous articles: Alliance Leicester Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Alliance Leicester Premier Fixed Rate mortgages
Alliance Leicester Premier Tracker mortgages
Alliance Leicester 2 Year Fixed mortgage Plan

Alliance Leicester Year Fixed Max LTV 90%

2007-11-29T04:27:00.000Z
Mortgage Plan : 2 Year Fixed Max LTV 90%

Initial Interest Rate: 5.87% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.8%

Early repayment charges Apply?: Yes*

Product Fee: £599

Loans available between £25,000 and £250,000, fixed until 30 November 2009.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 3% of the amount repaid.

Link to previous article: Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages
Alliance Leicester Premier Tracker mortgages
Alliance Leicester 2 Year Fixed mortgage Plan

Alliance Leicester 2 Year Fixed mortgage Plan

2007-11-28T04:11:00.000Z
Mortgage Plan : 2 Year Fixed

Initial Interest Rate: 5.73% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.8%

Early repayment charges Apply?: Yes*

Product Fee: £999

Loans available between £25,000 and £250,000, fixed until 30 November 2009.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 3% of the amount repaid.

Link to previous article: Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages
Alliance Leicester Premier Tracker mortgages

Alliance Leicester Premier 2 Year Fixed Max LTV 90% Mortgage Plan

2007-11-27T04:51:00.000Z
Mortgage Plan : Premier 2 Year Fixed Max LTV 90%

Initial Interest Rate: 5.87% until 30/11/09

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.8%

Early repayment charges Apply?: Yes*

Product Fee: £499

Exclusive mortgage deals for new and existing Premier and Premier Direct Current Account customers taking out a new mortgage.

Loans available between £25,000 and £500,000, fixed until 30 November 2009.

10% Overpay facility.

*Early Repayment Charge: You are only tied into your mortgage during the fixed period.

Repay all or part of your mortgage before 30 November 2009 and pay a charge of 3% of the amount repaid.

Link to previous article: Alliance Leicester Premier Tracker mortgages
Other Related Link: Alliance Leicester Premier Fixed Rate mortgages

Alliance Leicester Premier Tracker mortgages

2007-11-26T06:18:00.000Z
Mortgage Plan : Premier 2 Year Base Rate Tracker Max LTV 90%

Initial Interest Rate: 5.89% for two years

Rate for remaining term (Variable): 6.74%

Overall cost of comparison (APR): 6.8%

Early repayment charges Apply?: Yes*

Product Fee: £499

• Exclusive mortgage deals for new and existing Premier and Premier Direct Current Account customers taking out a new mortgage.

• Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.14%.

• Then Bank of England Base Rate 2.14% for the remainder of the term (variable)

• Loans available between £25,000 and £999,999.

• Fully Flexible - you can overpay, and with the overpayments you build up, you can borrow money back, take payment holidays, or pay less in some months.

• *Early Repayment Charge: You are only tied into your mortgage during the first two years.

• Repay all or part of your mortgage in years one to two and pay a fee of 3% of the amount repaid.
Link to previous article: Alliance Leicester Premier Fixed Rate mortgages

Alliance Leicester Premier Fixed Rate mortgages

2007-11-23T06:57:00.001Z
Mortgage Plan : Premier 2 Year Fixed Max LTV 90%

Initial Interest Rate: 5.87% until 30/11/09

Rate for remaining term (Variable): 7.89% (current)

Overall cost of comparison (APR): 7.8%

Early repayment charges Apply?: Yes*

Product Fee: £499

• Exclusive mortgage deals for new and existing Premier and Premier Direct Current Account customers taking out a new mortgage.

• Loans available between £25,000 and £500,000, fixed until 30 November 2009.
• 10% Overpay facility.
• *Early Repayment Charge: You are only tied into your mortgage during the fixed period.

• Repay all or part of your mortgage before 30 November 2009 and pay a charge of 3% of the amount repaid.

Link to previous article: Mortgage Charges and fees - What to lookout for

Mortgage Charges and fees - What to lookout for

2007-11-21T04:30:00.000Z
Here is a list of common Mortgage Charges and fees that one should take note of:
Arrangement Fees

Most lenders nowadays charge you for the work involved in setting up a mortgage or to reserve a loan at a particular rate. The amounts can vary considerably between lenders. Paying more doesnt always get you a better deal.

High Lending Charge

If you are borrowing more than 90 per cent of the property value, check to see whether you will be charged an extra fee. This is to protect the lender in case you fail to keep up the payments, but not all of them make this charge.

Insurance

Some lenders will offer you a lower mortgage rate if you buy their home insurance products. They will also encourage you to take out their mortgage payment protection policy. It is usually better to shop around for the cheapest insurance deal.

Early Redemption Penalties

With mortgage special offers, fixed rate deals, etc, you will normally be charged a penalty if you pay off your loan within the offer period. In particular, try to avoid those loans with redemption penalties that extend beyond the end of the offer period as you will be stuck on the lenders standard variable rate.

Initial Disclosure Documents And Key Facts Illustration

Initial disclosure documents (IDDs) spell out mortgage advisers services, such as whether they can recommend products from one company only, or are free to sell mortgages from all lenders. Key facts illustrations (KFIs) are given to borrowers when they apply for or are recommended a mortgage. These outline the mortgages cost over its term, repayments, fees and an interest rate expressed as an annual percentage rate (APR).

Annual Percentage Rate

The APR tells prospective customers the interest rate over the life of the mortgage. This factors in any initial offer rate and then the lenders standard variable rate to which the mortgage reverts, as well as the impact of fees. The APR in the key facts document does not reflect that many mortgage borrowers switch to better deals than the lenders standard variable rate (SVR) after their initial offer expires. Neither does it include the potential costs on leaving the mortgage, such as administration fees and early repayment charges.

Standard Variable Rate

Because house prices are at a record high many people (probably including yourself) are now thinking of their mortgages in the long term as well as the upfront rate. For this reason it is worth knowing what current customers are paying. It is highly unlikely that when you come to the end of your fixed or discount rate period you will be on the same SVR as current customers. But you can use the information to see how the lender compares against others in the market.

Link to Previous article : Types of Mortgages

Types of Mortgages

2007-11-20T08:10:00.001Z
Unfortunately in recent years mortgages have become increasingly complex and wrapped up in technical jargon. Borrowers now need to consider at least two things, the type of mortgage loan they want and how they are going to repay it. Have a look at your options below.

Types Of Mortgages: Here is the list of different types of mortgages that are available in UK markets.

Variable Rate Mortgage

Rates on these loans fluctuate in line with general interest rates but because they are at the lenders discretion they dont necessarily move as far, or as fast. Discounts are usually offered to new borrowers in the early years.

Tracker Mortgage

Rates on tracker loans are normally linked directly to movements in the Bank of England base rate. The link may be for a limited period rather than the life of the mortgage.

Cashback Mortgage

When these loans are granted, cash payments are given to borrowers to spend how they like. They are typically between 6 per cent and 8 per cent of the loan.

Fixed Rate Mortgage

Rates of interest on these loans are guaranteed not to change for a specified period, typically the first three to five years of the mortgage.

Capped Rate Mortgage

With this type of loan, the interest rate is guaranteed not to exceed a fixed level during the capped-rate period. The advantage is that it can go down if rates are cut.

Repayment Methods

Repayment Mortgage

Also known as capital and interest mortgages because part of the monthly payments gradually pays off the loan while the remainder covers the interest on the amount outstanding.

Offset Mortgage

These loans are taken out in conjunction with a current account or savings account. Regular mortgage repayments are required but at the same time the cash in the other accounts helps to reduce the loan, thereby saving interest. This can help to speed up repayment of the mortgage.

Interest Only Mortgage

As its name implies, the borrower pays the interest only on the loan during the mortgage term so the capital remains outstanding. Payments may also be made into a savings scheme, such as an Individual Savings Account, to repay the capital at the end of the term. Sometimes the loan is repaid out of the sale proceeds of the property.

Endowment Mortgage

This is where an interest-only loan is combined with a life assurance with-profits policy intended to pay out a sufficient sum to clear the mortgage at the end of the term. But endowment policy payouts are not guaranteed and many are currently expected to produce shortfalls.

Link to Previous article : How the Standard Compensation is calculated

How the Standard Compensation is calculated

2007-11-02T04:11:00.001Z
The FSA document have a nice example of how the Standard Compensation is calculated in case of endowment policy.

Click on the image below to have a bigger view of the figure:

Link to Previous article : Time limits for mortgage endowment complaints

Time limits for mortgage endowment complaints

2007-11-01T05:34:00.000Z
Here are some common questions from FSA documents about time limits for complaining:

When should I complain to the firm?

You should complain to the firm that sold you the endowment policy as soon as possible after you realise that you have cause for complaint. If you delay making a complaint, you could lose the right to some or all of any redress that may be due to you, as there are time limits within which you must make your complaint. An important time limit is that you usually have three years from the time when you became aware (or ought reasonably to have become aware) that you have cause for complaint.

A firm can usually reject your complaint as being out of time – known as ‘time barring’ –
if you are outside these time limits. It can also ask the Ombudsman to reject the complaint on similar grounds.

Firms can choose not to apply time bars but most do so.

How do I know when the three-year time limit ends?

Since 1 June 2004 a firm can usually only time bar an endowment complaint if:

_ you complain more than three years after receiving a red reprojection letter (or a similar letter warning you that there is a high risk that the policy will not reach the target amount); and

_ it has given you six months’ notice of the date after which the complaint would be time barred.

I made a complaint but the firm told me it was time barred by the end of 2003. I wasn’t told that the time limit for my complaint ended then. Why?

Between 1 February 2003 and 31 May 2004 our rules allowed a firm to time bar an endowment complaint if you made the complaint more than three years after the first red reprojection letter and more than six months after you received a second similar warning or reminder of the need to act. So during this period firms did not have to warn you of the actual date after which your complaint would be time barred.

When should I complain to the Ombudsman?

If you are unhappy with the firm’s decision, you should complain to the Ombudsman within six months of the firm sending you a ‘final response’ letter. Even if your complaint is rejected by the firm as being out of time, you can still refer your complaint to the Ombudsman if you think there are exceptional circumstances or that the time bar was wrongly applied, or otherwise unfair. Ultimately it is for the Ombudsman to consider what is fair and reasonable in the circumstances of the case.

Taking your complaint to court

If you cannot resolve your complaint with the firm and the Ombudsman cannot help, you may still be able to pursue your complaint through the courts. There are costs in doing this, and time limits for taking a claim to court. This is a complex area of law and the exact time limit will depend on what your claim is for and the particular facts of your case.
It is important that you do not delay if you are considering taking any action through the courts – seek legal advice as soon as possible.

Mortgage endowment compensation

If you have a valid complaint, you may be due compensation. The FSA has set out how this should be calculated.

How is compensation calculated?

The calculation of any compensation involves comparing:

_ the mortgage interest and endowment policy premiums you have actually paid and the current surrender value of your mortgage endowment policy; with

_ the mortgage interest and capital repayments you would have paid on an equivalent repayment mortgage, and how much capital you would have paid off the mortgage.

In some cases other factors need to be considered in the overall calculation, for example:
_ whether life assurance was needed;
_ whether the policy ran past your retirement date;
_ the type of endowment policy (for example, low start); or
_ the extent to which you could reasonably have avoided or reduced the loss by taking prompt action. This is also called mitigation.

No compensation is due if you are not worse off – for example, if your endowment policy has grown and is now worth more than the capital you would have paid off on an equivalent repayment mortgage.

I have been offered compensation. How do I know it is a fair offer?

When calculating mortgage endowment compensation, firms are required to follow guidance issued by the FSA. So, if the firm has offered compensation in accordance with our guidance, you can assume it is a fair offer.

However, if you have received an offer of compensation, but don’t understand how the firm calculated it, or you think there may be a mistake in the calculation, contact the firm and ask for a breakdown of the figures.

I have been offered compensation but it doesn’t amount to my shortfall; why is that?
The compensation is usually based on what your position would have been now, if you had not been sold the policy but had taken out a repayment mortgage instead. Compensation is not based on what you expected the policy to be worth.

What if I have already surrendered my endowment policy and changed to a repayment mortgage? How will the firm calculate compensation?

The calculation involves comparing:

_ the mortgage interest and endowment policy premiums you had actually paid, up to when you surrendered the policy, and the amount received when the policy was surrendered; with

_ the mortgage interest and capital repayments you would have paid on an equivalent repayment mortgage, and how much capital you would have paid off your mortgage, up to the point when you changed to a repayment mortgage.

Again, the precise calculation may vary if other factors need to be taken into account.

If you get compensation from making a complaint about the sale of your endowment policy, you should consider using it to reduce the amount you owe on your mortgage.

I changed to a repayment mortgage after receiving a reprojection letter but still have an endowment policy in place. The advising firm has agreed that I was mis-sold the policy but has only calculated compensation up to the date when I changed to a repayment mortgage. Is this correct?

Yes, because the endowment policy was originally taken out to repay your mortgage.
Therefore, the compensation is calculated up to the point when the endowment policy ceased to be used to repay your mortgage.

I have been offered compensation by the firm. If I take my complaint to the Financial Ombudsman Service, could the Ombudsman award more?

Firms and the Financial Ombudsman Service use the guidance issued by the FSA to decide how much compensation is due. Therefore, if the firm has offered compensation in line with our guidance, it is unlikely that the Ombudsman would require the firm to pay more unless, for example, the firm has made an error in its calculation, or new factors come to light which require the Ombudsman to use a different method of calculation.
If you have received an offer for compensation, but don’t understand how the firm calculated it, contact them and ask for a breakdown of the figures.

Do I have to pay tax on any compensation I receive?

Compensation is intended to put consumers back in the position they would have been in had they not received the ‘wrong’ advice. Where the calculation does not contain additional interest, tax will not be due on a compensation payment. However, in some cases (for example if the policy is sold, surrendered or varied) tax may be payable.

Consumers in this situation should not lose out, so our guidance to firms is that it may be appropriate for them to pay any personal tax liability that might arise (for example, following the surrender, sale or variation of the policy).

Where the circumstances of the case mean that the compensation calculation includes an amount of interest, you will usually have to pay tax on the interest in the normal way.
If you are not sure where you stand, or need help with calculating the amount of tax that
may be due, you should contact HM Revenue and Customs – see Useful contacts

Link to Previous article : Steps to make Complain for Endowment Mortgage

Steps to make Complain for Endowment Mortgage

2007-10-31T05:17:00.000Z
Here is graphical representation of the steps one must take to make a complain for Endowment mortgage
You may click on the image to see a clear and enlarged picture

Link to previous article How do I make a complaint about endowment policy?

How do I make a complaint about endowment policy?

2007-10-30T04:50:00.000Z
Step 1 – First, complain to the firm that sold you the endowment policy.

This may be a financial adviser, the endowment company or your mortgage lender. Check with the endowment company if you are not sure who you should complain to as they would have the details.

Firms must have a proper complaints procedure and tell you how to use it.

Try to find all the paperwork and any notes you made at the time. You are entitled to copies of the sales paperwork from the firm that sold you the endowment policy.

It is usually best to make your complaint in writing. You can phone to make a complaint, but if you do, make sure you keep detailed notes. Record the name of the person you spoke to and the date and time you called. Keep these notes in a safe place as they are a record of your complaint.

When you make a complaint, the firm may send you a questionnaire (commonly known as an endowment mortgage questionnaire) to complete and return to them. Fill this in to the best of your ability – it will speed up the process.

Step 2 – Then, if you are unhappy with the firm’s decision, you can usually take your complaint to the Financial Ombudsman Service

(the Ombudsman) – see Useful contacts.

You must do this within six months of the firm sending you a ‘final response’ letter. The Ombudsman provides a free, effective, straightforward process for resolving disputes.

If you are thinking of taking a complaint there, you can call its Contact Centre for help. You can choose whether or not to accept the Ombudsman’s decision. If you accept, it is binding on both you and the firm. If you don’t accept, you can take your case to court. There will be a charge for doing this, and depending on what your claim is for, time limits may apply.

See the FSA guide to making a complaint about financial services for more detailed information about the complaints process (including ‘tips for effective complaints’ and ‘taking a complaint to court’).

In some cases the complaints process may be slightly different:

_ If you took out your endowment policy on advice from a solicitor before 1 December 2001, see page 5.

_ If you were advised before 29 April 1988 to take out your endowment policy

Link to Previous article : Complaint about a mortgage endowment policy - 2

Complaint about a mortgage endowment policy - 2

2007-10-29T04:54:00.000Z
I’ve surrendered my policy – can I still complain?

Yes, you may have a valid complaint and be due some redress – as long as you can show that you were not properly advised at the time of the sale and you lost out financially as a result.

Should I complain if:

_ My endowment policy finishes after I retire?
You may have a valid complaint if the adviser did not check that you were likely to be able to afford to carry on paying the premiums after you retired.

_ I was advised to cancel one endowment policy and take out another?
You may have a valid complaint. An endowment policy is a long-term investment that often gives a poor return if you cash it in early. You should usually avoid cashing in one policy and taking out another for the same purpose.

_ My endowment policy runs on after my mortgage loan is due to finish?
You may have a valid complaint. An endowment policy sold to repay a mortgage loan will not normally be suitable if it finishes after the date when the loan has to be repaid.

_ I was given a guarantee that the endowment policy would pay off my mortgage loan?
You are likely to have a valid complaint if you can show that you were told that the endowment policy was guaranteed to pay out enough to pay off your mortgage loan and that this was part of the legal contract between you and the firm. This is likely to be rare.

Will I be charged for making my complaint?

You will not be charged if you complain to the firm that sold you the policy.
If you need to refer your complaint to the Ombudsman, this service is also free.

Complaints management companies

Some companies offer to help consumers pursue their complaints with financial services firms and with the Ombudsman. In return, the consumer has to pay the company a fee, usually in the form of a fixed share of any compensation that is awarded for a successful complaint.

Some companies ask for a fee upfront, and you may still have to pay a fee if you decide not to use them. So make sure you understand what you may have to pay and when you would have to pay it.

A number of these companies are currently focusing on mortgage endowment complaints, where the ‘success fee’ you would have to give them can amount to hundreds or even thousands of pounds. This is money that you obviously won’t then be able to put towards paying off your mortgage. And using these companies does not necessarily increase the chances of your complaint succeeding or of your getting compensation.

Your own circumstances may mean that you would find it helpful to use one of these companies to handle the complaint for you.

But think carefully about the likely costs and benefits of this and do check the fees and conditions before you sign any contract.
From April 2007 complaints management companies operating in England and Wales must be authorised by the Department for Constitutional Affairs – see Useful Contacts .

What if I can’t trace the firm that sold me the endowment policy, or the firm has ceased trading?

If you bought your endowment policy through an independent financial adviser, your endowment company should have the details of who sold it to you. If you’re not sure the firm still exists, contact the FSA Consumer Helpline or use the Check our Register service – see Useful contacts .

If you cannot trace the firm because it has ceased trading, you can contact the Financial
Services Compensation Scheme (FSCS) – see
Useful contacts.

The FSCS is a ‘fund of last resort’ for consumers who have a claim against a firm that has been authorised by the FSA but is unable (or likely to be unable) to pay claims against it, often because it has ceased trading. But the FSCS is unlikely to be able to help you if the advice was given before 28 August 1988.

Link to Previous article : Complaint about a mortgage endowment policy - I

Complaint about a mortgage endowment policy

2007-10-26T05:52:00.000+01:00
This set of articles from FSA is for you if:
_ you have a complaint about the way your endowment mortgage was sold to you.
It sets out:
_ what you can complain about and how to do it;
_ the time limits within which to make your complaint; and
_ how compensation is worked out.

This article from FSA explains what may give you grounds for complaint and tells you how to make a complaint about a mortgage endowment policy. But time may be running out, so if you want to complain, do it now. Otherwise you may be too late, or the amount of compensation you can claim may be limited.

If your endowment policy is not expected to pay out its target amount, you may be left owing money on your mortgage (known as a shortfall).

Making a complaint

Before you can get compensation you need to show that you have grounds for a complaint (see below) and that you have lost out financially as a result.

If you haven’t lost out, but are still unhappy with the risks of an endowment policy, you may be able to switch to a repayment mortgage. If the firm that sold you the policy has upheld your complaint it should help you switch and ensure that you don’t lose out if you have to pay any charges, such as transfer charges.

An endowment policy includes life insurance cover so that the mortgage loan will be paid off if you die early. If you stop the endowment when you move to a repayment mortgage and you need life cover, you should make other arrangements through a mortgage protection plan or a separate life insurance policy.

Do I have grounds for a complaint?

You may have grounds for complaint if your adviser did not:

_ tell you how your money would be invested and explain the risks involved; or

_ explain that an endowment policy is a longterm commitment that often gives a poor return if you cash it in early; or

_ check you were comfortable with the risks of your money being linked to investment performance, including the stockmarket; or

_ check there was a reasonable expectation you would be able to keep up payments until the end of the term; or

_ explain any fees and charges and how they would affect the return on your savings. If you bought your endowment policy between 29 April 1988 and 31 December 1994, you should have been given ‘product particulars’ including charges and surrender values for the first five years. If you bought your policy on or after 1 January 1995, you should have been given a Key Features document with details of fees and charges and their effect on your savings over the longer term.

Remember:

_ if you want to make a complaint, do it now – time may be running out; and
_ take your complaint to the Financial Ombudsman Service (FOS) if you’re not happy with the firm’s response – but do it quickly because time limits apply.
Link to Previous article : Important Tips about Home Purchase Plans (Ijara n Musharaka)

Important Tips about Home Purchase Plans (Ijara n Musharaka)

2007-10-25T06:15:00.000+01:00
Firms regulated by the FSA have to give you certain documents. Whenever you see the sign, this means you are being given information that’s important for you.

Keyfacts documents that firms must give you

You should get the following documents:

■about our home purchase plan services –
explains the service and the range of products firms offer, and, if appropriate, the names of the Islamic scholars they have consulted.

■risks and features of this home purchase plan
– will explain the key risks, features and benefits of the plan.

■financial information statement –
will give you the costs involved in the plan – ie the overall cost and how much you will pay each month.

■Offer letter
including an updated financial information statement – you’ll get this when the firm offers you a home purchase plan. Use this to make sure you’re getting the product you applied for.

Complaints

If things go wrong with a firm, you should take your complaint to the firm first. If you can’t resolve the problem between you and the firm, you may have access to the Financial Ombudsman
Service – see Useful contacts . The Ombudsman deals with complaints that cannot be resolved between you and the firm.

Compensation

If you are dealing with a broker who advises you or arranges the sale of the plan for you, and the broker stops trading, you may have access to the Financial Services Compensation Scheme.
The scheme provides a safety net for consumers.

Don’t forget
■A home purchase plan may be suitable for you if you want to buy your home in a way that doesn’t involve paying interest.

■You will bear the costs of two solicitors’ fees and you may pay more for a property valuation and building insurance.

■You won’t legally own your home until the end of the plan – this could be between 7 and 25 years.

■Home purchase plans are complex products, so make sure you get independent legal advice.

■If you want Islamic services, the about our home purchase plan services document will tell you which firms can offer them.

■Make sure you deal with a firm FSA regulates.

■Make sure a home purchase plan is right for you – there are other ways of buying your home.
Link to Previous article : Islamic Mortgages

Islamic Mortgage

2007-10-24T05:17:00.000+01:00
How Islamic Mortgage Works? An example of how Islamic Mortgage Works

Suppose that there is a married Muslim couple with the surname Taj, who are looking for a house according to their Islamic faith.
Mortgages from British financial institutions are interest-based, something which does not comply with Islamic Sharia law. Islam has no objection to wealth creation, but says it must be based on partnerships and fairness where risks and rewards are shared.

In the eyes of Islamic scholars, interest is an excess payment from one party to another which is unrelated to the value of the goods traded.

Mortgage interest is therefore unacceptable because one party gains at the other's expense without any regard to the price paid for the home.
This means many Muslims in Britain find themselves in a difficult situation, trying to balance the core principles of Islamic equality with the realities of the British mortgage market.

In many cases Muslims conclude they have no choice but to reluctantly take out an interest mortgage - something Mr Taj's own parents did.

But Mr and Mrs Taj are among a growing number of young couples who want to turn to the two lenders in the UK offering Sharia compliant mortgages - the United Bank of Kuwait and the West Bromwich Building Society.
Once the Tajs find a house, the lender buys on their behalf and owns it outright.
Just as with an interest mortgage, the couple move in and begin paying instalments to the lender to slowly buy the home over many years.
But the difference is they also pay a rent to the lender who has effectively become their landlord.
The lender owns the property and receives a rent until the Tajs pay the final instalment.
In Islamic terms, the rent is not another name for interest: It is seen as a fair payment for use of the property rather than a charge for borrowing money.
There are a number of factors which make this more expensive than an interest mortgage. Firstly, the couple need a large deposit of 20% of the value of the home.
Secondly, because the process means the home legally changes hands twice, the Tajs will end up paying stamp duty twice, rather than once.
The couple have an added worry of trying to save enough to keep up with the rising London property market.
Hence, the borrower ends up paying more, but the Muslims who believe in their faith are prepared to pay more
So is there a demand for this type of mortgage?
"There's enormous interest in this subject among young Muslims. A lot of our friends are in the same situation," says Mr Taj.
"Some have managed to raise the money to take out an Islamic mortgage.
"A few of them have taken out interest mortgages because they feel it is the only choice they have, given the costs.
"I think they feel guilty about it but believed they had no alternative.
"It would make a real difference if there were more products on the market. Then there would be more choice for Muslims."

Link to Previous article : Home purchase plans and regulation - 2
This example is based upon a cast from BBC

Home purchase plans and regulation – 2

2007-10-23T06:35:00.000+01:00
A home purchase plan may be right for you if you want to buy your home in a way that does not involve paying interest and that a number of scholars of Islamic law consider acceptable. But you need to think about several things, some of which are listed below.

Islamic services

If it is important to you that the firm you use offers Islamic services, check that it does. Firms we regulate must give you a document called about our home purchase plan services. The document must tell you the names of the scholars who have checked that the firm’s services comply with Islamic law.
FSA regulates the financial services provided by a firm – FSA do not regulate its compliance with Islamic law. If you have any doubts about the Islamic nature of the product or services a firm is offering, you should speak to your imam or an independent Islamic scholar.

How much finance do I need?

Home purchase plans are a long-term commitment so think about how much you can afford. For example, what would happen if your circumstances changed and you lost your job or had to take a drop in income? Also you can't be sure that your rent won't go up in future. If you can't pay your rent, you'll be breaking the terms of the lease.

Shop around

There can be a big difference in what is available from different firms, so shop around to:
 -- get all the information available from firms about their individual services and products; and
 find out about different rental rates on offer – for example, standard, fixed and discount rates – and the total cost of each one.

Use the keyfacts document called about our home purchase plan services to compare the service being offered by different firms and the keyfacts financial information statement to compare the cost of the products on offer

Getting advice

Home purchase plans are complex products. Make sure you get advice from a specialist adviser to help you understand them.
Firms we regulate and their agents must follow the standards we set when giving you advice. They should only recommend those home purchase plans that are suitable for your personal circumstances, based on the information you give them.

What are the risks

■We require firms offering these products to protect your interests. However, there will be limits to what the firm can do, so it’s important to get independent legal advice to make sure your interests are properly protected. Take the time you need to make sure a home purchase plan is right for you.

■You need to remember that the firm, not you, owns the property, and that you won’t legally own your home until the end of the agreement – this can be anything up to
25 years.

■During this time, if the firm goes bust, or sells its part of the property to someone else, unless your interests have been properly protected you may risk losing your share of the property and your right to live there.

■Make sure that the lease giving you the right to live in the property has been properly registered with HM Land Registry or you may lose your right to live there.

■As with any method of buying a home, you need to think about whether or not you will be able to continue to make payments if your circumstances change.

Additional Costs

Two solicitors will be needed – one to act on behalf of the firm and one to act on your behalf. You will have to bear the costs of both.

Because the firm is the owner of the property, you may also pay more for a valuation and buildings insurance than you would with a mortgage.

Features not included

Because of the way they work, home purchase plans may lack some of the features of an interest-based mortgage.

For example:
■Overpayments normally allow you to pay for your home more quickly. When you take out a home purchase plan you can only make overpayments when the rent is reviewed, and this does not reduce the term but the amount you pay each month. This means you usually won’t benefit immediately from overpaying each month as you could with a mortgage.

■A further advance of money is often used to pay for things like home improvements. Unlike a mortgage, you may not get a further advance on an existing home purchase plan.

■Payment holidays allow you to stop making payments for a time. This may be useful if you were to lose your job or take time off to look after a child, for example. You can’t usually take a payment holiday with a home purchase plan.

Check the information from firms to see what features they offer.

Link to Previous article : Home purchase plans and regulation - 1

Home purchase plans and regulation

2007-10-22T05:54:00.000+01:00
What are home purchase plans?

Home purchase plans help you buy your home in a way that doesn’t involve paying interest.
So they may be of special interest to Muslims who want to buy a home in a way a number of scholars of Islamic law consider acceptable.

What does regulation mean for you?

Firms we regulate must meet set standards. Among other things, this means that firms must:

■have staff with the necessary skills and knowledge;

■give you clear information about the services they provide –and

■only sell you products that suit your needs and circumstances.

And if things go wrong with a firm FSA regulate, you may have access to schemes that deal with complaints and possibly compensation.

Always check that the firm you’re dealing with is regulated by FSA.

■You won’t pay interest with a home purchase plan.

■Keyfacts documents contain important information that you should read.

■Protect yourself – only deal with firms regulated by the FSA.

Home purchase plans work in the following way:

Step 1: You find the property you want to buy and agree the purchase price with the seller.

Step 2: You pay the home purchase plan firm a contribution towards the purchase price.

Step 3: The firm buys the property in its name.

Step 4: You enter an agreement to buy the property from the firm at the end of a fixed period (known as ‘the term’) at the same price as the purchase price paid by the firm.

Step 5: At the same time you enter the agreement with the firm to buy the property, you also take out a lease with the firm allowing you to live in the property during that fixed period.

Step 6:
You make monthly payments to the firm. Each payment is made up of a rental payment and a payment towards the purchase price of the property.

Step 7:
Once you have made all the payments to the firm, the property is transferred into your name and
becomes legally yours.

Two types of home purchase plan are currently available – the ijara and the diminishing musharaka.

1. The ijara

Under the ijara, the monthly payments you make towards buying the property are held by the firm and used to buy your home at the end of the agreement.

2. The diminishing musharaka

Under the diminishing musharaka, each payment you make towards buying the property buys a slice of the firm’s share. So the firm’s share in the property gets smaller while your share increases. As your share in the property increases, so the rent you pay for the use of the firm’s share will get smaller.

Ask the firm for full details of their home purchase plans to make sure you understand how they work. You can then choose which is best for you.

Link to Previous article : Open Market Home Buy Scheme - 5

Open Market Home Buy Scheme - 5

2007-10-19T07:45:00.001+01:00
Don’t forget

■ With Open Market HomeBuy, you get an equity loan from a mortgage lender and a HomeBuy Agent, as well as a standard mortgage loan.

■ You pay interest on the standard mortgage loan, and after five years on the lender’s equity loan too. You won’t ever pay interest on the HomeBuy Agent’s equity loan.

■ The amount you owe on the equity loans will increase if the value of your home increases. Over time, this could mean you owe much more than you originally borrowed. Think about how you would repay this.

■ Any money from the value of your home that you have to pay the mortgage lender and the HomeBuy Agent will mean you have less to put towards buying a new house if you want to move home.

■ Make sure you understand what you will owe if your home falls in value.

■ All the loans must be repaid before you get any money from the sale of your home.

■ If your home is worth less than the amount you owe, you usually won’t have to repay the HomeBuy Agent in full.

■ Whenever you repay one of the equity loans, you’ll have to pay for a valuation of your home.

Is this type of mortgage right for you?

■ There are many types of mortgage available and different ways to get onto the property ladder. Open Market HomeBuy gives you an extra option, but it’s important to consider all the choices available to you before you decide what’s right for you. Perhaps you could get a conventional mortgage by choosing a cheaper property, buying with a friend or building up a deposit. There are also other government housing schemes that your HomeBuy Agent can tell you about.

■ If you do decide to use the Open Market HomeBuy scheme, you’ll also have to decide which mortgage lender to borrow from. The about this mortgage document will help you compare different mortgages and choose the one that is best for you.

■ If you are unsure about all the different options available, consider getting some independent
financial advice. Your HomeBuy Agent may be able to give you details of a specialist adviser.

What is right for you will depend on your needs and circumstances. Before making a decision about an Open Market HomeBuy mortgage, you should make sure you have considered all the options open to you.

Useful FSA publications

0845 numbers will be charged at the local rate based on current charges from BT landlines.
Charges for calls from mobile phones and other networks may vary.
Available from FSA website:
www.fsa.gov.uk/consumer or on our Leafletline on: 0845 456 1555

■ Choosing a mortgage – taking the right steps

■ You can afford your mortgage now but what if...?

Work out what you can afford using our online mortgage calculator:

FSA mortgage calculator:
www.fsa.gov.uk/consumer

Other information

More information about the Open Market HomeBuy scheme, including eligibility and the application process can be found in the Housing Corporation leaflet, Have you heard about Open
Market HomeBuy? This is available from the Housing Corporation’s website at www.housingcorp.gov.uk

Link to Previous article : Open Market Home Buy Scheme - 4

Open Market Home Buy Scheme - 4

2007-10-18T06:06:00.000+01:00
Repaying the equity loans

Because the amount you owe on the equity loans is based on the value of your home, when you repay them your property will have to be valued. You will have to pay for this valuation.

Repaying the mortgage lender

The mortgage lender’s equity loan will run for the same length of time as your standard mortgage loan – often known as ‘the term’. You will agree this with the mortgage lender when you take out the loans. At the end of this time, you must pay whatever you owe on the equity loan. The mortgage lender will often allow you to repay your loans earlier, but they may charge you a fee for this, known as an ‘early repayment charge’.

You may also have to repay the mortgage lender’s equity loan if you move home – check whether your lender will allow you to transfer the loan to a new property. The amount you owe on the equity loan will have gone up if the value of your home has increased.

Think about how you will repay this money.

Repaying the HomeBuy Agent

The HomeBuy Agent’s equity loan won’t have a fixed date for repayment. You repay the loan when you sell your home, or if you are no longer eligible for the scheme – for example, if you leave your qualifying employment. Your HomeBuy Agent will tell you more about how this could happen.

You can repay the HomeBuy Agent’s loan earlier if you wish, but remember that whenever you repay the loan, if the value of your home has increased you will need to give the HomeBuy Agent their share of the increase. You have to pay back the full amount of the loan and any increase in one go – you can’t pay it in stages.

Can I move to a new home without having to repay the loans?

When you sell your home, you will always have to repay the HomeBuy Agent’s loan, including the HomeBuy Agent’s share of any increase in the value of your current property. But you may be able to apply for another Open Market HomeBuy loan to buy a new home. Your HomeBuy Agent will be able to tell you if you are still eligible for the scheme.

And remember you may also have to repay the mortgage lender’s loans if you move home. This may mean paying early repayment charges. The about this mortgage document will give you this information. Bear in mind that you may have to repay the loans earlier than you planned – you may need to sell your home to move with your job for example.

Could I lose money with this scheme?

In some cases when house prices fall, you could owe more than the house is worth. This is known as ‘negative equity’. It would make it difficult for you to move. This is a risk with any mortgage.
Open Market HomeBuy gives you some protection against negative equity. If the money from the sale of the house won’t pay off all the loans, then you don’t have to pay the HomeBuy Agent their full share – just what is left over after everything you owe to the mortgage lender has been paid. But in these circumstances you won’t get any money from the sale – whatever money there is must go towards paying as much of the HomeBuy Agent’s loan as possible. All the loans secured against your home need to be paid off before you get any of the money from the sale – you are last in line. So any money you put down as a deposit could be at risk.

What if I want to switch to a different mortgage deal?

If you want to switch the standard mortgage loan to a different deal, you will have to pay back what you owe on the mortgage lender’s equity loan as well. That means paying back the standard mortgage loan, the original equity loan and the mortgage lender’s share of any increase in the value of your home. You will need to think about whether you can afford to do this. You may also need to pay an early repayment charge.

Link to Previous article : Open Market Home Buy Scheme - III

Open Market Home Buy Scheme - III

2007-10-15T07:08:00.000+01:00
What would happen to the equity loans if the value of my home falls?

Different mortgage lenders deal with a fall in value differently, so it’s important to understand how any loan you apply for works.
With some mortgage lenders, the amount you owe will fall if the value of your home falls. Mortgage lenders who take this approach will share any fall in value, in the same way that they share any increase.

Example 2 – The mortgage lender shares any fall in value

Remember, Adam bought a house for £150,000 using an equity loan of £18,750 from his mortgage lender (12.5% of the property’s value).

Suppose the value of the house falls by 5% when he decides to sell his home. It is now worth £142,500. What does he owe the mortgage lender? Because his mortgage lender is sharing any fall, what Adam owes is based on the new value of the property. He originally borrowed 12.5% of the property’s value so he now owes 12.5% of £142,500, which is £17,812.50.

That’s £937.50 less than he originally borrowed.

Other mortgage lenders won’t share a fall in value, although they will take a share of any increase, so the amount you owe them on the equity loan will never fall below the amount you originally borrowed.

Example 3 – The mortgage lender doesn’t share any fall in value

If Adam’s equity loan from his lender worked like this, then if prices fall he will still owe the lender the amount he originally borrowed – in this case £18,750.

Link to Previous article : Open Market Home Buy Scheme - II

Open Market Home Buy Scheme – II

2007-10-12T04:34:00.000+01:00
This is part II of the article: Open Market Home Buy Scheme - I. Please read the article from part I, before proceeding with this part.

The FSA document covers a very good example as below:

Example 1 – The value of your home increases

Adam buys a house for £150,000. He has a deposit of £3,750. In addition to a standard mortgage loan of £112,500, he takes out a £18,750 equity loan from the mortgage lender and another equity loan for £15,000 from the HomeBuy Agent.

■ The mortgage lender’s equity loan is 12.5% of the property’s value (£18,750 is 12.5% of £150,000).

■ The HomeBuy Agent’s equity loan is 10% of the property’s value (£15,000 is 10% of £150,000).

When Adam decides to sell his home, the value of his house has increased by 20% to £180,000. This is an increase of £30,000. So what would he owe on the mortgage lender’s equity loan and what would he owe on the HomeBuy Agent’s equity loan?

The mortgage lender’s equity loan

Adam originally borrowed 12.5% of the property’s value from his mortgage lender. So, in addition to the £18,750 he originally borrowed, he will also owe 12.5% of the £30,000 increase, which is £3,750.

So, on the mortgage lender’s equity loan, Adam now owes £18,750 plus £3,750, giving a total of £22,500.

The HomeBuy Agent’s equity loan

Adam originally borrowed 10% of the property’s value from the HomeBuy Agent. So, in addition to the £15,000 he originally borrowed, he will also owe 10% of the £30,000 increase, which is £3,000. So Adam now owes the HomeBuy Agent £15,000 plus £3,000, making a total of £18,000.

What happens to the equity loans if the value of my home increases?

The amount you finally repay to the mortgage lender and HomeBuy Agent on the equity loans will depend on the value of your home at the time you repay the loans. The share of any increase in value that you owe will be based on the percentage of your home’s value you originally borrowed.

Adam will also have to pay back the amount he borrowed on the standard mortgage loan from his mortgage lender, but this isn’t affected by changes in the value of his home.

Remember:
If you borrow under the scheme, part of any increase in the value of your home will belong to the mortgage lender and the HomeBuy Agent. This means that the amount you owe them both will increase if the value of your home increases. The more the value of your home goes up, the more money you’ll owe on your equity loans. This could mean a big increase in the amount you owe. You need to keep this in mind – think about what you owe and how you will repay it.

Link to Previous article: Open Market Home Buy Scheme - I

Open Market Home Buy Scheme

2007-10-11T06:17:00.000+01:00
The Open Market HomeBuy scheme is led by the government in partnership with a small group of mortgage lenders. It helps key workers, social tenants, priority groups on a housing register and priority first-time buyers to borrow money to buy a home.

■ The Open Market HomeBuy scheme is just one way for you to raise money to buy a home. You need to decide whether it is right for you.

■ The mortgage lenders offer different Open Market HomeBuy mortgages with different terms and conditions. Make sure you shop around and choose the right deal for you.

■ If you are unsure about the scheme or want to know more about the other types of home loan available, consider getting independent financial advice. Your HomeBuy Agent may be able to give you details of a specialist adviser.

How does the Open Market Home Buy scheme work?

The scheme involves borrowing money from a mortgage lender and a HomeBuy Agent. HomeBuy Agents manage the money that the government puts into the scheme.

If you borrow under the scheme, you will take out three different loans. Each works in a different way, so it’s important that you understand the features of each one. These are:

■ A standard mortgage loan from a mortgage lender.

The mortgage lender will charge interest
and you’ll make monthly payments. This loan
will usually be the largest of the three.

■ An ‘equity loan’ from the same mortgage lender.

This works in a very different way from the lender’s standard mortgage loan. When you pay off this loan the mortgage lender takes a share of any increase in the value of your home. The share it takes is based on the percentage of the property’s value you originally borrow through the equity loan. The example on page 3 shows how this works. The lender won’t charge you interest for the first five years. After this time you will pay interest. The rate you pay will depend on the lender you choose.

■ Another ‘equity loan’ from the HomeBuy Agent.

As with the mortgage lender’s equity loan, the HomeBuy Agent will take a share of any increase in the value of your home when you sell the property or repay the loan. However, the HomeBuy Agent won’t ever charge you interest and there are no monthly payments.

FSA regulates the mortgage lenders involved in the Open Market HomeBuy scheme, which means they have to meet our standards. The mortgage lender has to give you details about the loans in a document called about this mortgage. This will tell you:

■ what you are borrowing;

■ what you’ll be charged; and

■ what your repayments will be.

Use this document to help you compare products from different mortgage lenders to see which is most suitable for your needs. We don’t regulate HomeBuy Agents, so the document won’t include information about their equity loan. Ask your HomeBuy Agent for more information.

Remember:

If you can’t pay back the money you owe, there is a risk you could lose your home, because all three loans are secured against your property. And when you sell your home, the loans must be paid off before you get any of the money from the sale.

Link to Previous article: Mortgage Shortfall: can’t avoid mortgage shortfall?

Mortgage Shortfall: can’t avoid mortgage shortfall?

2007-10-10T06:17:00.000+01:00
Firstly, when your investment pays out at the end of the mortgage term, you should pay all the money into your mortgage to find out exactly how much you still owe the lender. You then need to look at how best to pay off the shortfall.

Talk to your lender as soon as possible. You may have a number of options available to you, some of which we list below.

■ Pay the shortfall from savings you have elsewhere.

■ Discuss a new repayment period with your lender to pay the shortfall. The quickest way may be to carry on with your previous monthly payment, although you may be able to agree a lower payment over a longer term. You should avoid extending the term beyond your retirement, unless you’re sure you can afford it.

In general, provided you keep up the new agreed monthly mortgage payments, you should not lose your home as a result of the shortfall.

■ You could sell your property to repay the mortgage, and buy a cheaper property so that you don’t need a mortgage.

■ If you have retired, or are about to retire, you could consider a lifetime mortgage. This is repaid from the proceeds of the sale of your home when you die or if you move out of it (perhaps into a care home) when the scheme will usually end.

But you should think very carefully about this as there are risks as well as benefits. The FSA factsheet Raising money from your home will tell you more about these and other options, but you should think about taking professional advice on this option.

FSA documents list a very good Example as below

Joe has come to the end of his mortgage term and the endowment company has paid him £35,000, but this is not enough to pay off his mortgage and he is left owing the mortgage lender £8,000. The interest rate on his mortgage is 4.4%. Joe could carry on with the monthly payment he has been making, which is £157.67. This would repay the remaining capital and interest in 4 years and 9 months, costing £8,987 in total, but the monthly amount is more than Joe wants to pay. Joe will retire in seven years. So he has agreed with his lender that he will repay the £8,000 over seven years and his monthly payment will be £110.66, which will cost him £9,295 in total.

Useful contacts

Call rates may vary

FSA Consumer Helpline

Tel: 0845 606 1234
Minicom/Textphone: 08457 300 104
Leafletline: 0845 456 1555
Website: www.fsa.gov.uk/consumer

To find a financial adviser
IFA Promotion

Tel: 0800 085 3250
Website: www.unbiased.co.uk
(for a list of four independent financial advisers local to your area)

Link to Previous article: Repaying your mortgage: Alternative available

Repaying your mortgage: Alternative available

2007-10-09T06:23:00.000+01:00
Make changes to your existing investment or savings plan

If you want to make changes to your investment or savings plan, you should talk to your product provider or a financial adviser. They should be able to tell you if the changes below are possible on your particular investment.

Extend the term.

􀀗 You could check whether it is possible to rearrange the investment or savings plan over a longer term, and if you are able to do so, ask your lender to extend the mortgage term to match.

􀀗 Gives you more time to pay off the loan by making more payments into your policy if you can’t afford to increase your payments.

􀀗 You may face extra charges, and a tax liability, if you vary an endowment policy. So it may be
a good idea to take advice first.

􀀛 The growth of your investment or savings plan is still linked to the stockmarket, so there’s still
no guarantee it will reach its target amount.

􀀛 Not a good idea if it means taking your mortgage into retirement, unless you are sure you’ll be able to afford it.

􀀛 The longer the term of the loan, the more interest you’ll end up paying in total.

Top up your investment or savings plan by paying in more each month.

􀀗 You should ask your product provider if it is possible to do this and, if so, whether there are any charges. If there were high charges, it may make this option poor value for money.

􀀗 You may also face tax liabilities, so you may want to take advice.

􀀛 Your investment or savings plan is still linked to the stockmarket.

􀀛 You could be worse off than if you used the same monthly payments to reduce your mortgage.

􀀛 Under a personal pension only part of any increased savings can be taken in cash. And nothing can be taken before age 50 (rising to 55 by 2010).
Link to Previous article: Mortgage Endowment Policies

Mortgage endowment policies

2007-10-08T06:16:00.001+01:00
If you think you have grounds for complaint about the sale of your endowment policy, but have not yet made a complaint, do it now – time may be running out. But remember – having a potential shortfall doesn’t necessarily mean you were missold your endowment policy.

If you get compensation from making a complaint about the sale of your endowment policy, you should consider using it to reduce the amount you owe on your mortgage.

What can I do now to make up a shortfall?

There are various ways to make up the gap. Some offer more certainty than others. The options available to you are to make changes to your mortgage, start an additional investment or savings plan, or to make changes to your existing investment or savings plan. These are explained below.

You may find that one of the options already matches your existing repayment arrangements. If so, consider the pros and cons of continuing or switching to an option that is better for you. Always take advice if you are not sure which option is right for you.

The figures in the examples that follow are for illustration only.

Example
Helen is 48 and has an interest-only mortgage of £50,000 linked to an investment. The mortgage has seven years left to run and the interest rate is 4.8%.
She asked her product provider to give her an up-to-date projection and this told her there is likely to be a shortfall of about £10,000.

Helen wanted to change £10,000 of her mortgage to a repayment method, but her payments would have increased from £200 a month to £302.97 a month and she didn’t think she could afford the increase. Helen talked to her lender, who told her that she could extend her mortgage term by five years as it will still be repaid by the time she retires, though extending the term does mean that she will pay more in total.

Her monthly payments will now be £252.96. When the investment pays out in seven years and she pays off most of the mortgage, her payments will reduce.

1. Make changes to your mortgage

Ask your lender to switch part of your mortgage – the amount of your projected shortfall – to a repayment method.

􀀗 Your current projected shortfall should be paid off by the end of the mortgage term.

􀀗 Should be fairly simple to arrange at low cost.

􀀗 Could be a flexible option – if the projected shortfall grows, you can switch more of your loan to a repayment method.

Ask your lender to convert your whole mortgage to a repayment method so that you repay all the capital by the end of the term.

􀀗 Your mortgage will be paid off at the end of the term if you keep up the payments.

􀀗 The longer your mortgage has to run, the smaller the increase in your monthly repayments will be.
􀀗 If you can afford it, you could continue with your investment or savings plan just for saving.
And some investment products include useful insurance cover such as life cover, or another
type of cover such as critical illness insurance.
􀀛If you were to cash in your investment you could lose out financially, and you may need to arrange other insurance cover.

So consider getting advice first if you are at all unsure.

If you want to convert your whole mortgage to a repayment method but are worried that you might not be able to afford higher payments talk to your lender. The increase in payments may not be as much as you think and your lender may be able to come up with a plan that can help you.

For example, a repayment mortgage of £50,000 and an interest rate of 4.75% with 15 years to run will cost you £388.41 a month. But in some cases you may be able to extend the term of your mortgage – a mortgage of £50,000 with 20 years to run and an interest rate of 4.75% would be £322.74 a month. This would limit the increase in the monthly payments, though it does mean that you would pay back more in total over the mortgage term. Think very carefully about extending the term if it would end after your retirement age.

Repay part of your mortgage early by paying off a lump sum, or by overpaying each month.

􀀗 This will reduce the amount you owe, and the amount you need your investment or savings plan to cover.
􀀗 It may be better value than saving up separately to pay off the shortfall in future.
􀀗 You should check whether your lender will make an early repayment charge if you overpay.
􀀗 You should also check when your lender will give you the benefit from extra payments – some do so only once a year.

Making changes to your mortgage is probably the lowest-risk option to make up a shortfall. Ask your lender if there will be any charges for making changes to your mortgage, and how much these will be.

2. Start an additional investment or savings plan

Use a cash savings account.

􀀗 The amount you get back does not depend on the performance of the stockmarket.

􀀗 May be a good option for the short term – for example, if you have to delay paying off a lump sum from your mortgage because of early repayment charges, or your mortgage is near the end of its term.

􀀗 Taxpayers can avoid paying tax on their interest by saving in a cash ISA. (But remember there are limits on how much you can pay into an ISA each year.)

In the long term, other options (such as overpaying on your mortgage payments) are likely to prove better value for money.

Use a stocks and shares ISA.

􀀗 Potentially a good way of saving over the longer term. Historically, stocks and shares have grown more than cash savings accounts which have interest added. (But remember there are limits on how much you can pay into an ISA each year).

􀀗 Currently a tax-efficient way of saving. However, not sure of the government policies in the future

􀀛This type of product is linked to the stock market, and the value of your investment could fall as well as rise. So there’s no guarantee that your investment will grow enough to make up a projected shortfall.

􀀛Stocks and shares ISAs are meant for investing in the long term, and generally may not be suitable if you only have a short time to build up a lump sum.

If you decide to start an investment or savings plan to make up a shortfall, it would be a good idea to take financial advice.

Link to Previous article: Pay your mortgage with investment/saving plan

Mortgage endowment policies

2007-10-08T06:16:00.000+01:00
If you think you have grounds for complaint about the sale of your endowment policy, but have not yet made a complaint, do it now – time may be running out. But remember – having a potential shortfall doesn’t necessarily mean you were missold your endowment policy.

If you get compensation from making a complaint about the sale of your endowment policy, you should consider using it to reduce the amount you owe on your mortgage.

What can I do now to make up a shortfall?

There are various ways to make up the gap. Some offer more certainty than others. The options available to you are to make changes to your mortgage, start an additional investment or savings plan, or to make changes to your existing investment or savings plan. These are explained below.

You may find that one of the options already matches your existing repayment arrangements. If so, consider the pros and cons of continuing or switching to an option that is better for you. Always take advice if you are not sure which option is right for you.

The figures in the examples that follow are for illustration only.

Example
Helen is 48 and has an interest-only mortgage of £50,000 linked to an investment. The mortgage has seven years left to run and the interest rate is 4.8%.
She asked her product provider to give her an up-to-date projection and this told her there is likely to be a shortfall of about £10,000.

Helen wanted to change £10,000 of her mortgage to a repayment method, but her payments would have increased from £200 a month to £302.97 a month and she didn’t think she could afford the increase. Helen talked to her lender, who told her that she could extend her mortgage term by five years as it will still be repaid by the time she retires, though extending the term does mean that she will pay more in total.

Her monthly payments will now be £252.96. When the investment pays out in seven years and she pays off most of the mortgage, her payments will reduce.

1. Make changes to your mortgage

Ask your lender to switch part of your mortgage – the amount of your projected shortfall – to a repayment method.

􀀗 Your current projected shortfall should be paid off by the end of the mortgage term.

􀀗 Should be fairly simple to arrange at low cost.

􀀗 Could be a flexible option – if the projected shortfall grows, you can switch more of your loan to a repayment method.

Ask your lender to convert your whole mortgage to a repayment method so that you repay all the capital by the end of the term.

􀀗 Your mortgage will be paid off at the end of the term if you keep up the payments.

􀀗 The longer your mortgage has to run, the smaller the increase in your monthly repayments will be.
􀀗 If you can afford it, you could continue with your investment or savings plan just for saving.
And some investment products include useful insurance cover such as life cover, or another
type of cover such as critical illness insurance.
􀀛If you were to cash in your investment you could lose out financially, and you may need to arrange other insurance cover.

So consider getting advice first if you are at all unsure.

If you want to convert your whole mortgage to a repayment method but are worried that you might not be able to afford higher payments talk to your lender. The increase in payments may not be as much as you think and your lender may be able to come up with a plan that can help you.

For example, a repayment mortgage of £50,000 and an interest rate of 4.75% with 15 years to run will cost you £388.41 a month. But in some cases you may be able to extend the term of your mortgage – a mortgage of £50,000 with 20 years to run and an interest rate of 4.75% would be £322.74 a month. This would limit the increase in the monthly payments, though it does mean that you would pay back more in total over the mortgage term. Think very carefully about extending the term if it would end after your retirement age.

Repay part of your mortgage early by paying off a lump sum, or by overpaying each month.

􀀗 This will reduce the amount you owe, and the amount you need your investment or savings plan to cover.
􀀗 It may be better value than saving up separately to pay off the shortfall in future.
􀀗 You should check whether your lender will make an early repayment charge if you overpay.
􀀗 You should also check when your lender will give you the benefit from extra payments – some do so only once a year.

Making changes to your mortgage is probably the lowest-risk option to make up a shortfall. Ask your lender if there will be any charges for making changes to your mortgage, and how much these will be.

2. Start an additional investment or savings plan

Use a cash savings account.

􀀗 The amount you get back does not depend on the performance of the stockmarket.

􀀗 May be a good option for the short term – for example, if you have to delay paying off a lump sum from your mortgage because of early repayment charges, or your mortgage is near the end of its term.

􀀗 Taxpayers can avoid paying tax on their interest by saving in a cash ISA. (But remember there are limits on how much you can pay into an ISA each year.)

In the long term, other options (such as overpaying on your mortgage payments) are likely to prove better value for money.

Use a stocks and shares ISA.

􀀗 Potentially a good way of saving over the longer term. Historically, stocks and shares have grown more than cash savings accounts which have interest added. (But remember there are limits on how much you can pay into an ISA each year).

􀀗 Currently a tax-efficient way of saving. However, not sure of the government policies in the future

􀀛This type of product is linked to the stock market, and the value of your investment could fall as well as rise. So there’s no guarantee that your investment will grow enough to make up a projected shortfall.

􀀛Stocks and shares ISAs are meant for investing in the long term, and generally may not be suitable if you only have a short time to build up a lump sum.

If you decide to start an investment or savings plan to make up a shortfall, it would be a good idea to take financial advice.

Link to Previous article: Pay your mortgage with investment/saving plan

Pay your mortgage with investment/saving plan

2007-10-05T05:56:00.001+01:00
If you have an interest-only mortgage, you may have taken out an endowment policy, Individual Savings Account (ISA), Personal Equity Plan (PEP) or personal pension to pay off the loan at the end of the mortgage period. This article from FSA explains what you can do if your investment or savings plan may not be on target to pay off your mortgage.

Interest-only mortgages

Unlike a repayment mortgage where your monthly payments gradually pay off the amount you borrowed (the capital) as well as the interest, with an interest only mortgage your monthly payments only cover the interest on the loan. They do not pay off any of the money you have borrowed. Money left owing at the end of the mortgage period (the term) is known as a shortfall.

You may have arranged to pay off the capital at the end of the term, by paying money into an investment or savings plan such as an endowment policy, Individual Savings Account (ISA), Personal Equity Plan (PEP), or you may have linked it to a personal pension. It is important to check your investment or savings plan regularly to see if it is on track to pay out its target amount.

If you haven’t made any arrangements to pay off the capital at the end of the term, you should think carefully about how you can do this and talk to your lender as soon as possible.

Do I need to take action?

If you think you may have a shortfall, you should consider taking action as soon as possible to make sure you can repay your mortgage. If you don’t think you can avoid a shortfall, there are options available to you.

How can I check if I have a shortfall for mortgage?

If you have an endowment policy, you should have received regular letters over the last few years telling you whether your policy is on track to repay your mortgage. These are called ‘re-projection letters’ and are marked ‘red’ if there is a high risk that the policy is not on track, ‘amber’ if there is a significant risk that the policy is not on track or ‘green’ if the policy is on track.

Endowment policies are linked to investments such as bonds and shares, which can vary in value. So make sure that you check each re-projection letter, even if the policy has so far been on track to repay the mortgage.

If you have an ISA or PEP you probably won’t get regular re-projection letters, but you can ask your product provider to give you an up-to-date projection of the value of your plan.

If you have a personal pension, your yearly statement won’t necessarily show you what your pension fund may grow to by the time you retire, so ask your product provider for an up-to-date projection of the fund. Remember that only part of a personal pension fund can be taken in cash to help pay off any loan.

Contact the provider if you are not sure where you stand on any of your investment or savings plans. You will need to continue to check the value right up to the time you repay your mortgage.
Never just cash in an investment or savings plan or stop paying in without taking professional advice – you could lose out financially.

Remember the following important points:

■ review your investment or savings plan regularly to see if it’s on track to repay your mortgage;

■ don’t delay – consider taking action now to make sure you will be able to pay off your mortgage – talk to your lender; and

■ if you can't avoid a shortfall, there are options available to you – talk to your lender.

Link to Previous article: Can’t repay your mortgage? What to do? -IV

Can’t repay your mortgage? What to do? -IV

2007-10-04T08:49:00.000+01:00
This is part iv of the article Can’t repay your mortgage? What to do? -I. Please read the first part before proceeding with this one.

As a last resort, you could –

■ Sell your home

If you can’t afford your mortgage payments and you think this situation won’t change in the long term, you may wish to think about selling your home. However, before you do this, think carefully about where you will live. Your local council may say you have made yourself intentionally homeless and will not help you find somewhere to live.

If you live in Scotland, you may be eligible for the national Mortgage to Rent Scheme. The scheme may be able to arrange for you to sell your home to a social landlord and remain there
as a tenant. Advice agencies can give you more information about this scheme – see Useful contacts .

What if your lender takes you to court?

If you have taken all the possible steps mentioned above to get help, hopefully it won’t come to this. But if it does:

■ don’t ignore the paperwork you are sent – seek advice from any of the agencies
■ just because a lender starts court proceedings it doesn’t mean you will automatically lose your home. Make sure you get advice and make sure you attend the court hearing;
■ if you do have to go to court, a money adviser from one of the agencies can help you prepare your case and may be able to represent you.

Complaints

If you feel that your mortgage lender or insurance company is not dealing with your case fairly, ask them for a copy of their internal complaints procedure.
Consumer Helpline: 0845 606 1234

You can often get matters sorted out quickly and easily if you do this. But if you’re not happy with the answers, you can take the matter to the Financial Ombudsman Service – see Useful contacts below.

See also the FSA guide to making a complaint about financial services for useful tips – available from the FSA Consumer website at www.fsa.gov.uk/consumer or the FSA Consumer
Helpline on 0845 606 1234.

Useful contacts

Citizens Advice Bureaux (CAB)

Website: www.citizensadvice.org.uk

Citizens Advice Scotland (CAS)

Website: www.cas.org.uk

Northern Ireland Association of Citizens Advice Bureaux

Website: www.citizensadvice.co.uk
Look in the phone book for your local bureau, or on their website

National Debtline

Provides a free, confidential and independent phone service
Tel: 0808 808 4000 – freephone
Website: www.nationaldebtline.co.uk

Business Debtline

Free, confidential and independent advice for
self-employed people and small businesses
Tel: 0800 197 6026 – freephone
Website: www.birminghamsettlement.org.uk

Advice UK
All members provide free and confidential advice, but not all provide money advice. To find your nearest centre
Tel: 020 7407 4070

Money Advice Scotland

Tel: 0141 572 0237
Website: www.moneyadvicescotland.org.uk

Consumer Credit Counselling Service (CCCS)

CCCS offers a structured programme on how to
manage your money
Tel: 0800 138 1111 – freephone
March 2005

The Community Legal Service (CLS)

Aims to make it easier for the public to get legal help and advice – look on their website for details of agencies in your area
Website: www.clsdirect.org.uk

Credit Action

Provides information and guidance for people with debt or money worries
Tel: 0800 591 084 – freephone
Website: www.creditaction.com

Jobcentre Plus Office

Your local office can advise you if you are eligible
for any benefits.
Look in your phone book for details

Financial Ombudsman Service

If you are not satisfied with the way your mortgage
or insurance company has dealt with your complaint
Tel: 0845 080 1800. Call rates may vary
Website: www.financial-ombudsman.org.uk

Local Trading Standards Department

Also known as the Consumer Protection Department
Look in the phone book for your local office

Financial Services Authority (FSA)

Consumer Website: www.fsa.gov.uk/consumer
Consumer Helpline: 0845 606 1234. Call rates may vary
Minicom/textphone: 08457 300 104
(available 8.00am - 6.00pm Monday - Friday: call rates may vary)

Link to Previous article: Can’t repay your mortgage? What to do? -III

Can’t repay your mortgage? What to do? -III

2007-10-03T05:47:00.000+01:00
Should you use a fee-charging debt management company?

You may see adverts for companies that will handle your debts for a fee. Be wary of claims that your debts will disappear – and remember that because you have to pay a fee, you are likely to end up paying off your debt for longer. Rather than paying a fee you could use one of the many organizations that will give free advice.

What can you do to pay off your mortgage arrears?

You could think about any of the following:

■ Start repaying arrears as soon as you can

It’s important to do this because arrears can often lead to extra charges that will increase the total amount you owe. Although paying off your arrears quickly could mean you have less spending money for a while, it is cheaper in the long run.

■ Make extra payments

You can arrange to pay your arrears by paying more each month than the standard monthly mortgage payment. But make sure you can realistically afford the extra. Even if your mortgage lender is unhappy with what you offer, pay the extra anyway. Explain why you can only afford this amount – there may be circumstances such as illness or a drop in income that your mortgage lender is not aware of.

■ Add the arrears to your mortgage

You could ask your mortgage lender to consider ‘capitalising’ your arrears. This means adding
them to your total mortgage balance, spreading the arrears over the remaining period of your mortgage.

Your monthly payment will then increase to take account of this. Your mortgage lender is unlikely to agree to this if you have previously failed to stick to revised repayment arrangements, or if your house is worth less than the balance of your mortgage including the arrears.

■ Extend your mortgage period

Most mortgages are normally repayable over 25 years. If you have a repayment mortgage and have been paying it for several years, you could ask your mortgage lender to extend the term back to 25 years again. This would reduce your monthly payments BUT you would be making them for longer – perhaps into your retirement.
This is more difficult to arrange with interest only mortgages that are connected to an endowment policy, PEP or ISA.

■ Ask to delay paying off your arrears

If you can now manage to meet your monthly payments, but can’t afford to pay anything towards the arrears, you could ask your mortgage lender not to demand payment towards your arrears for a period of time.

■ Changes you can consider if you have an interest-only mortgage

■ If you have an interest-only mortgage linked (for example) to an endowment policy and can’t afford both the mortgage and the endowment policy payments, you could ask the endowment company whether you can have a payment holiday. You will have to arrange with them how to make up the backlog of payments once you restart your policy.

■ If you have an endowment policy that has been running for several years, it may have built up a reasonable sum of money that you could use to pay off your arrears. This would mean cashing in the policy to take the money, or selling the policy. If you did this, then you would have to change to a repayment mortgage to make sure that the money you borrowed would be repaid. Before you do this, you will need to speak to both your mortgage lender and the endowment company. Cashing in an endowment policy early may result in the value of your policy being considerably reduced. You should think carefully before deciding to do this and askyour endowment provider for a cash-in value.

Link to Previous article: Can’t repay your mortgage? What to do? -II

repay your mortgage? What to do? – II

2007-10-01T08:19:00.000+01:00
This is part II of the article Can’t repay your mortgage? What to do? – I. Please read the article from part I before continuing with this part.

Things you must to avoid if you cannot pay your mortgage

■ Loans to repay debts

Think long and hard before taking out a loan to repay your debts. Such loans are often very expensive and secured on your home – putting it at greater risk if you can’t keep up the payments. If you are thinking about taking out a further loan, get advice from one of the agencies mentioned on contacts links.

■ Handing back the keys

If you can’t afford the mortgage and want to hand back the keys to the mortgage lender, think carefully. You are still liable for the mortgagee until the property is sold. Often, empty properties sell for less than their market value.

This could mean that your mortgage is not repaid in full and the lender may still pursue you for any outstanding balance – they can do this for up to six years after the sale (five years in Scotland). Your name will be on the repossession register – making it harder to get a mortgage in the future. Seek advice first.

Is any financial help available?

■ Insurance

If you can’t meet your mortgage payments because of a loss of income or your income has fallen (perhaps because you’re on long-term sick leave), you should check whether you have any mortgage payment protection insurance.

If you do, check whether your policy covers your specific circumstances and make a claim straightaway. If your claim is refused, and you don’t agree with the refusal, you may be able to take your case to the Financial Ombudsman Service – see Useful contacts .

The Financial Ombudsman Service provides consumers with a free, independent service for resolving disputes with financial firms.

■ Benefits

There may be benefits you could claim to increase your income – contact your local Jobcentre Plus office (details in the phone book) or an advice agency for information.

■ If you claim Income Support or Job Seeker’s Allowance, the local Jobcentre Plus office will usually provide some help with your mortgage payments. How much you get and when it starts will depend on when you took out your mortgage and how long you have been receiving benefits. The local Jobcentre Plus office can help only with interest payments and these will be paid at a rate set by the government.

■ If you, or your partner are aged 60 or over you may be entitled to Pension Credit. In certain cases you could get an extra amount of Pension Credit to cover mortgage interest payments. To find out more see the Pension Service’s website at www.thepensionservice.gov.uk or get a copy of the leaflet PC1L Pension Credit from your Post Office.

Link to Previous article: Can’t repay your mortgage? What to do?

Can’t repay your mortgage? What to do?

2007-09-28T06:39:00.000+01:00
What should you do?

■ Do something now – the problem won't go away

The sooner you contact your mortgage lender to discuss your difficulties, the better. They need to
know if there are specific reasons why you cannot make the payments.

■ Contact your mortgage lender for help

All mortgage firms regulated by the FSA have to take into account their customers’ circumstances and treat them fairly. If you are in arrears, your lender will have a set procedure for dealing with your case. Contact them to find out if they can help you.

■ Get advice

It may be a good idea to get some free and independent advice. Various advice agencies specialise in this area and can help you plan how to solve your problem.

■ Do a personal budget

(advice agencies may be able to help you with this – see Useful contacts ). This is a list of your income and spending and will help you see where your money is going and plan your future spending.

Use this plan so that you pay all your essential spending commitments such as the mortgage, utility bills (gas, electric, water), insurances, council tax and housekeeping first.

■ Pay what you can

Even if you cannot pay the full monthly payments, continue to pay what you can afford. Your mortgage lender is more likely to be sympathetic if you can show you are willing to make an effort to pay something – this may significantly increase your chances of keeping your home.

■ Consider changing the way you repay your mortgage

If you have a repayment mortgage and your difficulties are short term, you could ask your mortgage lender to accept interest-only payments for a time. This means you will not be paying anything off the capital amount. You will then need to catch up on your payments towards the capital at a later date.

■ Tell your mortgage lender what you are doing

Your mortgage lender will be better able to respond to your difficulties if they understand the action you are taking.

Link to Previous article: Can you afford a mortgage or Loan

Can you afford a mortgage or loan? - II

2007-09-27T10:23:00.001+01:00
What can you do now to help protect yourself against the risks of changes in your circumstances and interest rate rises?

■ Plan your budget based on what you might have to pay in future as well as the initial cost
– don’t forget to include all your household expenses, such as buildings and contents insurance premiums and council tax.

■ Try not to take the maximum mortgage on offer – just because you can afford it now, doesn’t mean you can afford it in the future.

■ Think about whether you need a fixed rate so that you know your mortgage payment will stay the same for a given period – but don’t forget that if rates fall, your payment won’t.

■ Build up your savings so that in an emergency (for example, if you lose your job) you can still afford to pay your mortgage and bills for a short time. Compare rates on savings accounts on FSA’s comparative tables, newspapers or websites.

■ Work out how long you could live on your savings if you lost your job.

■ Check what benefits your employer will provide if you became ill.

■ Insurance – various products can insure you in the event of redundancy, critical illness, or accident. You should consider these but make sure they meet your needs: there are restrictions on when and how much they will pay out. Make sure you understand the limitations of any policy and how it protects you. For information on all types of insurance, see the Association of British Insurers (ABI)

Information Zone at www.abi.org.uk.

If you do get into difficulties

Talk to your lender if you cannot meet your mortgage payments – they will have a set procedure for dealing with your case.

State benefits – may be available but may cover you only after an initial waiting period; for example:

■ you won’t qualify if you have a joint mortgage and only one of you loses your income;

■ you won’t qualify if you have savings of more than £8,000;

■ you may only qualify for help nine months after you become unemployed (unless you took your mortgage out before October 1995);

■ payments will only cover the ‘interest’ part of the mortgage; and

■ there is a limit on the amount of mortgage that qualifies.

Link to Previous article: Can you afford a mortgage or Loan

Can you afford a mortgage or loan?

2007-09-26T07:08:00.000+01:00
Taking out a mortgage is one of the biggest financial commitments you can make, both in
terms of the amount you borrow, and the time you may take to repay it.

Are you sure you can afford it?

You may be able to afford the repayments now, but if you borrow a large amount over a long
period of time think what could happen if, for example, your income falls or you lose your job. Or what if interest rates rise and your monthly repayments go up?

How could your income fall?

Your income could fall if:
■ you lost your job, or had to take a drop in income;
■ you or your partner stopped work to have a child or to look after a dependant; or
■ you became ill and couldn’t work.

Could you keep up your mortgage payments if your income falls?

How could your mortgage payments go up?

■ Your mortgage payments to your lender could go up (or down) if interest rates change.
Mortgage interest rates are related to the interest rate set by the Bank of England and your lender will usually apply some or all of any change to your mortgage.
■ Unless your mortgage rate is fixed for the full term of your mortgage, this will affect you.
■ Often, special rates are for a set period only, so when this comes to an end your payment will change – it could be much higher. Although interest rates have been stable over the
past few years, this could change. In the past, interest rates have risen from 7.5% to 15% in just a few years. Interest rate rises could increase your monthly payments considerably, making it difficult for you to afford them.

The following examples show how different interest rates can affect your payments.

Example 1: repayment mortgage

You borrow £100,000 over 25 years on a repayment mortgage, initially at a rate of 4%:

Example 2: interest-only mortgage
You borrow £100,000 over 25 years on an interest-only mortgage, initially at a rate of 4%:

As you can see clearly, there is a significant difference in the mortgage repayment money in the two schemes.

Don’t forget that rates could be higher than those assumed here.

In the next article, let’s cover some more details of the mortgage affordability.

Link to Previous article: Important Contacts for mortgage & Loans

Important Contacts

2007-09-20T07:21:00.001+01:00
Here are a few important contacts that you may find useful to approach while finalizing your mortgage loan.

Call rates may vary – check with your telephone provider for their charges.

To order other Moneymadeclear guides, check the Register or for general information or guidance

Financial Services Authority (FSA)
Consumer Helpline: 0845 606 1234
Minicom/Textphone: 08457 300 104

www.moneymadeclear.fsa.gov.uk

Other Moneymadeclear guides

Getting financial advice
• You can afford your mortgage now – but what if...?
• What to do when you can’t meet your mortgage payments
• Making a complaint

On this website you can find
A mortgage calculator to help you estimate your monthly mortgage payment – www.moneymadeclear.fsa.gov.uk/ tools/mortgage_calculator.html

Tables to help you compare products like savings accounts and mortgages – www.fsa.gov.uk/tables

A budget calculator to help you work out if you have enough money coming in to cover your bills – www.moneymadeclear.fsa.gov.uk/ tools/budget_calculator.html;

Insurance information – www.moneymadeclear.fsa.gov.uk/ products_explained/insurance.html

Financial advertising
To report misleading adverts and other promotions call 0845 730 0168

Association of British Insurers (ABI)020 7600 3333 www.abi.org.uk

For information on insurance products

Council of Mortgage Lenders (CML)020 7438 8956 www.cml.org.uk

For leaflets on buying to let, equity release and home buying in England, Wales or Scotland

Brokerfinder01398 331780 www.brokerfinder.co.uk

Mortgage broker search

Ethical Investment Research Service
www.eiris.org

Ethical mortgages and insurance

Finding a financial adviser

IFA Promotion0800 85 3250 (freephone) www.unbiased.co.uk
Provides a list of 8 independent financial advisers in your area

Institute of Financial Planning
0117 945 2470 www.financialplanning.org.uk

Financial planners can help you to achieve your goals by planning your finances.

MyLocalAdviserwww.mylocaladviser.co.uk
Online only – no telephone number. For a mortgage, insurance or investment adviser in your area.

The Personal Finance Society www.thepfs.org/findanadviser

Link to Previous article: Checklist for getting a mortgage & Loan

Checklist for getting a mortgage

2007-09-19T04:54:00.000+01:00
Getting a mortgage

Step no. 1

When you are ready to apply for a mortgage read the KFI and check that you understand all the features of the mortgage. Whether or not you take advice, you should still do your best to ensure that the mortgage is right for you.

Step no. 2

After you apply the lender will assess your application by valuing the property, checking your identity, and assessing whether you can afford the mortgage.

Step no. 3

You will then get a mortgage offer document and an updated version of the KFI. Compare this with the original KFI. This is your final chance to check you are happy with all the terms and conditions of the mortgage. If anything is unclear or if there are differences you don’t understand between the KFIs, talk to the lender.

Step no. 4

Before you accept the offer make sure you read and understand the mortgage offer document. Ask the lender to explain anything you don’t understand. Don’t sign until you’re sure the mortgage is right for you.

What to do if things go wrong with your mortgage?

If something goes wrong, the first thing to do is to contact your adviser or lender to put it right. They must follow a set of procedures when dealing with complaints. If you’re not satisfied with their response, you may be able to take the matter to the Financial Ombudsman Service. The adviser or lender will give you details.. If you can’t pay your mortgage, talk to your lender – they have a set procedure for dealing with this.

For more information read our guide What to do when you can’t meet your mortgage payments.
You may be able to get State benefits – but sometimes only after an initial waiting period.

Link to Previous article: Common questions about Mortgage & Loans

Common Questions about Mortgage & Loans

2007-09-18T05:53:00.000+01:00
Here is a list of Common Questions about Mortgage & Loans, that each individual can have:

How can I prepare for buying a property?

• Plan your budget based on the most you may have to pay for a mortgage.
• Try not to take the maximum mortgage on offer – always think from the point of view of affordability
• Think about whether you need a fixed rate so your mortgage payment will stay the same for a set period.
• Build up your savings.
• Work out how long you could live on your savings if you lost your job.
• Check what benefits your employer will provide if you get ill.
• Consider taking out insurance in case you are made redundant, get critically ill, or have an accident.
• Use Mortgage calculator on the Mortgages section of the website
• You can work out how much a change in interest rates would affect your own loan.

How can I review my mortgage?

You’ll get a statement at least once a year. Check to see what you’re paying, when any special deals end, and the balance of the mortgage left to pay

Am I still on a special deal or has it ended?

Check your statement to see if you are still on a good deal, note when this finishes, and remember to review it again closer to this time.

Does my mortgage have an early-repayment charge?

Check the KFI. Your annual statement will also show if there is an early-repayment charge and when it ends – make a note of the date, in case you want to switch to a new mortgage.

Should I switch my mortgage?

You can change your mortgage to get a better deal – known as switching. You can shop around every few years to make sure you are getting a good deal. You don’t have to move house to move your mortgage.

Switching can cut your monthly payments. But you’ll need to weigh up these monthly savings or other benefits against the costs of making the switch.
Get a KFI for mortgages that you are interested in, and check that you will save money by switching.

What will be the switching cost for me?

Especially in the early years, your mortgage might have early-repayment charges. These can be hefty if you are still on a special deal, such as a fixed, discounted or cashback mortgage. Even if there are no early-repayment charges, your lender might make an administration charge – this could be quite expensive.

If you are switching to a new lender, they must value your home and there will be legal costs to pay. With some mortgage deals, the lender will pay these fees for you.
Make sure you get back the costs of switching before any special deal ends – for example, in less than two years if you switch to a two-year discounted rate.

If you are switching lender, check whether they will charge you interest to the end of the month even if you pay off the mortgage earlier by switching. If they do, make sure you switch your mortgage at the end of the month.

Remember that if a deal has no fees, the rate might not be as good as one that does.

MOST IMPORTANT: If you’ve found a good deal, it’s worth going back to your existing lender to see if it will offer you a similar deal to keep you as a customer. Don’t hesitate to tell your existing lender that you have spotted a better offer elsewhere, so will he be able to match that offer.

Link to Previous article: Jargon Buster for Mortgage Loans

Jargon buster for mortgage loans - I

2007-09-17T06:23:00.000+01:00
Continuning further from our previous article on Mortgage features - various kinds of mortgage features-2, Here is a list of terms that are frequently used in the mortgage and loans business.

Advice
A recommendation about the most suitable mortgage for you made by an adviser who is regulated by the FSA.

Annual statement
A statement from your mortgage lender, sent every year, showing among other things what you've paid and what you still owe.

Approval in principle
A certificate which some lenders will give you that shows the amount they will probably be prepared to lend you. This is not a guarantee, but can be helpful when signing up with estate agents.

APR
Annual Percentage Rate. This shows the overall cost of a loan, taking into account the term, interest rate and other costs.

Authorised firm
A firm that has permission from the FSA to carry out regulated activities.

Buy-to-let mortgage
A loan you take out to buy a property which you intend to rent to tenants.

Capital
The amount you borrow to help buy your home.

Capped mortgage
A mortgage that has a maximum limit on the interest rate you'll have to pay during a special deal period.

Cashback mortgage
A mortgage that comes with a cash sum (often a percentage of the amount you're borrowing).

Compare products (mortgage tables)
Use our impartial tables to compare mortgages from a wide range of lenders.

Collared mortgage
A mortgage with a minimum interest rate you'll pay during a deal period.

Deposit
The amount of money that you're putting into buying a home (not including the mortgage money you're borrowing).

Discounted mortgage
This has a discounted variable rate of interest for a set period, after which the rate will increase.

Early repayment charge
A charge you may have to pay if you break off a mortgage deal - by paying it back early and/or moving to another lender.

Fixed rate
An interest rate that is fixed (ie it doesn't move up or down) for a set period of time.

FSA
The Financial Services Authority - the UK's financial services regulator.

Income multiples
The factor by which your earnings are multiplied to find out how much you can borrow.

Interest
The charge made by lenders when you borrow their money.

Interest rate
The figure that determines how much interest you pay. Usually linked to the Bank of England's rates and can move up or down.

Interest-only mortgage
A mortgage where you only pay the interest charges of the loan each month. This means you are not reducing the loan amount (or capital) itself, and this will need to be repaid in some other way.

Continue to Part II of Jargon Buster

Jargon buster for mortgage loans-II

2007-09-17T06:21:00.000+01:00
This is II part of the article Jargon buster for mortgage loans. Please start reading this article from the first part before continuing with this one.

Keyfacts documents
Standard documents that all authorised lenders and brokers must give you to explain their services and details about the mortgage you're interested in.

Loan-to-value
The percentage of money you want to borrow compared to the cost of the property.

Mortgage
A loan which is secured against your property.

Mortgage broker
A mortgage broker helps you understand the various mortgage types and deals available to them. A mortgage broker may recommend a mortgage for you or they may provide you with information to enable you to make your own choice.

Register
A list of firms that are regulated by FSA to carry out financial services in the UK. You can check online to see whether a firm is regulated by FSA.

Remortgaging
The process of changing your mortgage for a different one, without moving home.

Repayment mortgage
A mortgage that pays off both the home loan and the interest at the same time. Make all the payments and the mortgage will be fully repaid.

Stamp duty
A tax which home buyers must pay on properties above a government set figure.

Standard variable rate mortgage
A loan at the lender's normal mortgage rate - ie without any discounts or deals.

Secured
A mortgage is a secured loan on your home; this means that if you fail to repay it, your lender may be able to sell your home to get its money back.

Survey
A report on the condition of the property you are planning to buy.

Tracker mortgage
A mortgage with an interest rate that is usually linked to a particular rate that is set independently from the lender and moves up or down with it.

Term
The length of your mortgage.

Valuation
A brief inspection, for the benefit of your lender, of the home you hope to buy. This is to make sure they are not lending more than the property is worth and that the property is suitable security for the mortgage, but this will not tell you if it is a good or bad buy. For your own peace of mind, you may want your own survey.

Previous article: Mortgage features - various kinds of mortgage features-2

Mortgage features - various kinds of mortgage features-2

2007-09-14T05:52:00.000+01:00
This article is in continuation to the previous article Mortgage features - various kinds of mortgage features. Please read the first part before continuing with this one.

Offset mortgage

With an offset mortgage, your main current account or savings account (or both) are linked to your mortgage and are usually, but not always, held with the mortgage lender. Each month, the amount you owe on your mortgage is reduced by the amount in these accounts before working out the interest due on the loan.
So as your current account and savings balances go up, you pay less on your mortgage. As they go down, you pay more.

Current account mortgage

A current account mortgage is similar to an offset mortgage in that it offsets the balance of your savings against your mortgage. However, in this case, rather than your mortgage and current account being separate pots of money, they are usually combined into one account. This means that the account acts like one big overdraft.

Look at Section 4 of the keyfacts document about this mortgage document to see whether it is a current account or offset mortgage and whether you have to take a current account offered by the lender as a condition of the mortgage.

Is an offset or current account mortgage right for you?

-Possibly, yes, - if you are a higher rate taxpayer, have substantial savings to offset and like the idea of built-in flexibility to make overpayments and underpayments.

-Possibly not, if after paying your deposit you don't have much left in savings and if other mortgages have a lower interest rate or other features that are more important to you.

Top tips
-Read the keyfacts document and use it to compare costs and features of other mortgages available.
-Look for the APR figure alongside the interest rate.
-Use our Mortgage tables to help you compare costs and features of mortgages available
-Don't forget that discounts and special deals are temporary, and rates can go up when they end.

Link to previous article on Mortgage features - various kinds of mortgage features .

Mortgage features - various kinds of mortgage features

2007-09-13T06:30:00.000+01:00
Mortgages offered in the UK markets can have different features. For example, here is a list of typical features that you'll find:

--cashback mortgages
--flexible mortgages
--offset mortgages
--current account mortgages

Look at Sections 4 and 12 of the keyfacts document about this mortgage which will explain the features of the mortgage.

Cashback mortgage

This may be offered with some kind of interest-rate deal. The mortgage lender pays you a substantial sum (for example 3-5% of the amount you borrow) shortly after you take up the mortgage loan. If you move to another lender in the early years you'll have to repay some or all of the cashback received.

Is it right for you?

May be yes, if you need a large cash sum - for example, to buy house furnishing like furniture, or you expect the sum to more than compensate for any interest-rate rises during the penalty period.
Possibly not, if you can manage without the cashback now and can get a better overall deal elsewhere.
So ultimately it’s your call, you have to decide and predict whether you may get a better deal later and whether you would like to switch later.

Flexible mortgage

A flexible mortgage gives you some scope to change your monthly payments to suit your ability to pay. It's also useful if you want to pay off your loan more quickly. Several flexible features are becoming common and they aren't limited to mortgages with 'flexible' in their name. Here are some flexible features:
--Overpayments - you can pay more than your normal monthly mortgage payment or pay off a lump sum, or both.
--Underpayments and payment holidays - you pay less than the normal monthly payment for a limited period (say six or twelve months). You may even be able to stop making payments altogether. This could be useful if, say, you lose your job or take time off to care for a child.
--Borrow extra (loan drawdown) - you can borrow extra without further approval from your lender, provided the total loan does not go above an overall limit. Alternatively you may be able to 'borrow back' against earlier overpayments.

Is a flexible mortgage right for you?
Possibly, yes, if you are likely to use these features, for example if you're self-employed and have a variable income.
Possibly not, if you are unlikely to use these features. A less flexible mortgage may be cheaper or more suitable for you.

Let’s discuss the Offset and Current Account Mortgage in the following article.

Link to Previous article on Types of Interest rate deals on Mortgages.

Types of interest rate deals

2007-09-12T06:43:00.000+01:00
In this article, we present a detailed description of the type of interest rate deals that you can explore for you mortgage and loans. Some content presented in this table is taken from the official sites of FSA, hence the information is correct as on the date of publication of this article on mortgage and loans. Please consult your financial advisers in case of doubts.

Type of interest rate deals How does it work Charges if you repay early What in it for you?
Standard variable rate Your payments move up or down with the lender's own mortgage rate, which is usually driven by the Bank of England's base rate. Not usually, but check and see.
-- Usually you can leave your lender without any penalties or problems.

-- You're in control. You can usually pay back extra amounts (and cut your interest costs) without a penalty.

-- It moves with interest rates. So if interest rates go up, so will your monthly payment.

-- It will almost certainly be expensive compared to other deals.

-- The lender may not reduce, or may delay reducing, their variable rate even if the Bank of England rate goes down.

Tracker rate A variable rate loan with an interest rate that's at a set amount above or below the Bank of England or some other base rate, set independently from the lender. It tracks (moves up or down with) that rate. Sometimes during any special deal period and maybe even after the period too.
-- It can pay to go for a tracker if you can afford to pay more when interest rates go up, in exchange for benefiting when they go down.

-- It's not a good choice if your budget won't stretch to higher monthly payments.

Discounted interest rate Your monthly payments can go up or down, but you get a discount on the lender's standard variable rate for a set period of time. At the end of the deal, you usually change over to the standard variable rate. During the special deal: yes, almost always. They can apply even after the end of the special deal period as well.
-- It gives you a gentler start to your mortgage, at a time when money may well be tight. But you must be confident you can afford the payments when the discount ends.

-- The discount period is limited, so don't get used to those early low repayments.

-- You may not be able to make overpayments and pay off the loan early without penalties

-- The lender may not reduce, or may delay reducing their variable rate even if the Bank of England rate goes down.

Fixed interest rate Your payments are set at a certain level for an agreed period. At the end of that period, they'll usually switch you to the standard variable rate. During the special deal period: yes, almost always. They can apply even after the special deal period, too.

-- Your payments will stay the same in that period, even if interest rates go up.

-- This gives you the security of knowing that you can afford your payments and will make it easier for you to budget.

-- If rates go down, you won't benefit. Your payments will stay at the higher rate.

-- You may not be able to make overpayments and pay off the loan early without penalties.
Capped rate Your payments are variable and often linked to a base rate, but fixed not to go above a set level (the 'ceiling' or 'cap') during the period of the deal. At the end of the period, you are usually charged the lender's standard variable rate. During the special deal: yes, almost always. They can apply even after the end of the special deal period as well.

-- You know the maximum you will pay for a set period of time.

-- Useful if you want the security of knowing that your payments can't rise above the set level, but still benefit if rates fall.
Collared rate May be used in conjunction with a capped rate or a tracker (or both). Your payments are variable but will not fall below a set level (the 'collar'). Not usually, unless it is used in conjunction with a capped rate or a special-deal tracker rate (or both). But check and see.

-- It may be part of another interest-rate deal which otherwise appears attractive. But note that if the rate payable is only just above the 'collar' and you think rates will fall, you may not get the full benefit of a reduced payment.

Previous Article:Remortgage Cost

Remortgage Cost

2007-09-11T05:45:00.000+01:00
Continuing further from the previous article on Remortgage: Changing your mortgage plan, let's today talk about how much it will cost you for remortgaging.

What will remortgage cost you?
Even if there are no early repayment charges, your current lender might make an administration charge (sometimes known as an exit administration fee).
If you're switching to a new lender, they will insist on the same legal work your old lender did, to make sure the property offers proper security for them.

Lenders may also want an up-to-date valuation on your property.
With some deals the lender may pay some of these as an incentive to get your custom. But bear in mind you may have to pay back their value if you pay off your mortgage early.
Remember, when you've found a good deal, it's worth going back to your current lender to see if they will offer you a similar deal to keep you as a customer. This will save you some bother in moving on and maybe some money too.

Top tips
- Check your annual mortgage statement to see what you've paid and what's outstanding.
- Review your mortgage whenever a special deal ends.
- Don't assume that your current lender will keep you up to date with their best deals.

Remortgaging – changing your mortgage plan, not your home

2007-09-10T06:58:00.000+01:00
Today, let’s start a new topic which is quite common practice for UK home owners – REMORTGAGING. Remortgaging means you change the mortgage plan, either switch to another mortgage plan from the same mortgage firm, or take a new mortgage scheme from another mortgage lending firm. In either case, your home remains intact – you only switch you mortgage plan or scheme on the same home or house.

Once you've gone through the process of finding your mortgage - you probably won't be in a great hurry to do it all again!
However, a year or two down the line, it can be an expensive mistake NOT to look around the mortgage market to see what's on offer. Mortgage lending firms work hard to attract new customers, but often aren't so good at making sure their current borrowers continue to get the best deal.

Should you look around now?
- If you're already on a special deal, then you should probably not worry about remortgaging. The penalties you'd have to pay to break the deal, and the other costs involved, may be quite high and it may mean there's no point in remortgaging.

- But if you're paying your lender's standard variable rate and there are no penalties involved you should certainly look at what else is on offer.

Find your most recent mortgage statement – your mortgage lender or mortgage firm will send you a statement once at least each year - which will tell you what you're paying now, and how much you still owe. It will also tell you where early repayment charges apply and the date they stop.

Are you getting a really good scheme to switch?
Use the information in your statement to compare your mortgage with others, both from your current lender and from other lenders. You can use any online Mortgage tables to compare features and rates.
You can then go directly to the lenders, or visit a mortgage broker and get a keyfacts document about this mortgage document for the mortgages you're interested in, so you can check you'll save money by switching.

General Mortgage Fees and Mortgage Costs

2007-09-07T13:23:00.000+01:00
In the previous article, we talked about the Mortgage Fees and Mortgage Costs . They were the details that are usually mentioned in the keyfacts document. However, there are still a lot more things that need to be know, which are usually not listed in the keyfacts document.

These won't be listed in the keyfacts documents.
Fee or charge What's it for? How much?
Estate agency fee Marketing and selling your home. Typically 1-3% of the selling price; ask for a quote and shop around.
Stamp duty land tax (known simply as stamp duty) Tax payable to the government when you buy a home. Make sure this is in your budget if it applies to you - the cost can be high. It is the buyer who pays stamp duty, not the seller. Varies depending on purchase price of property see HMRC website.

Legal fees Paid to your solicitor to represent you, negotiate for you, and carry out the necessary searches, land registry and so on. This is also known as conveyancing. This usually will vary according to the firm. Budget for at least £400 and possibly more. Ask for quotes.
Survey fee Your lender will carry out a valuation visit (see above), but this is only a very basic inspection. You may want a Homebuyers report or a structural survey if you want a detailed report on the condition of the property. This will vary according to the surveyor, the size of property and the type of report you need. Ask for quotes.
Removal costs Moving all your belongings from your old home to your new one. Costs will vary, although you can save money by packing up everything yourself. Ask for quotes.

It becomes very important that you know the above mentioned fees and costs for your mortgage. Otherwise, once you finalize the mortgage deal and later you will discover that you are required to pay all these charges, it may hurt you in big way financially.

Here are some Top tips
1. Look at your keyfacts about this mortgage document for fees you must pay.
2. Use our checklist so you are aware of the costs involved.
3. Shop around for quotes – you can often save money.

Mortgage Fees and Mortgage Costs

2007-09-07T06:28:00.000+01:00
In this article, we will discuss about the various fees levied when you opt to take a mortgage. Some of the fee is charged by various people involved in the process, while some goes to the government in the form of stamp duty, etc.

While all the mortgage or loan related fee and costs will be set out clearly in the keyfacts document about the mortgage document that the lender or mortgage broker gives you, there'll be other costs you'll need to pay for. These include stamp duty, real estate agency fees and the lawyers' fees.

Often you can add certain fees charged by the broker or lender to the mortgage and pay them back over time with your monthly payments. But if you do this, remember that they will cost a lot more in the long run because of the interest that you will have to pay for taking the option to pay in the long run. If you want to do this, ask your lender or broker to give you a keyfacts document about this mortgage on this basis and one without the fees added, so you can compare what you'll pay.

All mortgage-related fees will be set out in the keyfacts documents. They may include any of the following:
Fee or Charge What is it charged for? How much can it be
"Mortgage advisor or broker fee (if you use one) For arranging the mortgage or giving you advice. This depends on the broker, but if they charge (some don't) they must tell you in the keyfacts about our mortgage services document.
Mortgage or Loan booking fee or arrangement fee A fee charged by the mortgage lender, usually to reserve your mortgage funds or to cover the distribution/administration costs of processing your mortgage loan. For some lenders, the fee may also be linked to special deals with a lower initial interest-rate. This varies, but £200-£700 may be a typical amount. Where the fee is linked to a special deal it may be even higher, £2,000-£3,000 or more. These large fees can significantly increase the overall cost, particularly if you add the fee to the loan – and so pay interest on it. Use the total cost information in section 5 of the keyfacts about this mortgage document to find out the overall cost.
Valuation fee This is the fee a mortgage lender may charge for a valuation of the property to assess whether it is appropriate security for the mortgage. This varies from lender to lender, and on the value of the property.
Higher lending charge If you're borrowing a high percentage of the value of the property, the lender may charge a fee to take out insurance cover. This protects them in case you can't pay back your loan and they have to sell your house at a loss. This will depend on how much you borrow, and how much you're contributing as a deposit.
Fee for making your own buildings insurance arrangements A fee charged by a lender for the administration costs of checking there is sufficient buildings insurance cover if you do not insure your property through the lender. Typically £25 but may be payable yearly or each time you change insurer.
Telegraphic transfer fee A possible charge from your lender if you need them to transfer the mortgage funds to your solicitor on the same day. Typically £40-£50.
Re-inspection fee Sometimes a lender will need to re-inspect the property after the original valuation, usually to check if you've made agreed repairs. Typically £50-£100.
Early repayment charge If you repay all or part of your mortgage earlier than the agreed term. This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Early repayment charge If you repay all or part of your mortgage earlier than the agreed term. This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Fees to repay the mortgage (known as exit administration fees) A fee to your lender when you repay your mortgage, even if you are not repaying it early. Typically £75-£300 (plus any early repayment charge, if applicable).

	As a Basic Mortgage Valuation Report (refunded on completion)	As part of a Homebuyer Survey & Valuation
Purchase Price/Valuation	£	£
Not exceeding £25,000	220	425
Not exceeding £50,000	220	425
Not exceeding £75,000	250	425
Not exceeding £100,000	250	425
Not exceeding £125,000	280	460
Not exceeding £150,000	280	460
Not exceeding £175,000	320	510
Not exceeding £200,000	320	510
Not exceeding £250,000	340	575
Not exceeding £300,000	370	625
Not exceeding £400,000	430	725
Not exceeding £500,000	530	825
Not exceeding £750,000	670	950
Not exceeding £1,000,000	820	1,100
Exceeding £1,000,000	1,070	1,570

Type of interest rate deals	How does it work	Charges if you repay early	What in it for you?
Standard variable rate	Your payments move up or down with the lender's own mortgage rate, which is usually driven by the Bank of England's base rate.	Not usually, but check and see.	-- Usually you can leave your lender without any penalties or problems. -- You're in control. You can usually pay back extra amounts (and cut your interest costs) without a penalty. -- It moves with interest rates. So if interest rates go up, so will your monthly payment. -- It will almost certainly be expensive compared to other deals. -- The lender may not reduce, or may delay reducing, their variable rate even if the Bank of England rate goes down.
Tracker rate	A variable rate loan with an interest rate that's at a set amount above or below the Bank of England or some other base rate, set independently from the lender. It tracks (moves up or down with) that rate.	Sometimes during any special deal period and maybe even after the period too.	-- It can pay to go for a tracker if you can afford to pay more when interest rates go up, in exchange for benefiting when they go down. -- It's not a good choice if your budget won't stretch to higher monthly payments.
Discounted interest rate	Your monthly payments can go up or down, but you get a discount on the lender's standard variable rate for a set period of time. At the end of the deal, you usually change over to the standard variable rate.	During the special deal: yes, almost always. They can apply even after the end of the special deal period as well.	-- It gives you a gentler start to your mortgage, at a time when money may well be tight. But you must be confident you can afford the payments when the discount ends. -- The discount period is limited, so don't get used to those early low repayments. -- You may not be able to make overpayments and pay off the loan early without penalties -- The lender may not reduce, or may delay reducing their variable rate even if the Bank of England rate goes down.
Fixed interest rate	Your payments are set at a certain level for an agreed period. At the end of that period, they'll usually switch you to the standard variable rate.	During the special deal period: yes, almost always. They can apply even after the special deal period, too.	-- Your payments will stay the same in that period, even if interest rates go up. -- This gives you the security of knowing that you can afford your payments and will make it easier for you to budget. -- If rates go down, you won't benefit. Your payments will stay at the higher rate. -- You may not be able to make overpayments and pay off the loan early without penalties.
Capped rate	Your payments are variable and often linked to a base rate, but fixed not to go above a set level (the 'ceiling' or 'cap') during the period of the deal. At the end of the period, you are usually charged the lender's standard variable rate.	During the special deal: yes, almost always. They can apply even after the end of the special deal period as well.	-- You know the maximum you will pay for a set period of time. -- Useful if you want the security of knowing that your payments can't rise above the set level, but still benefit if rates fall.
Collared rate	May be used in conjunction with a capped rate or a tracker (or both). Your payments are variable but will not fall below a set level (the 'collar').	Not usually, unless it is used in conjunction with a capped rate or a special-deal tracker rate (or both). But check and see.	-- It may be part of another interest-rate deal which otherwise appears attractive. But note that if the rate payable is only just above the 'collar' and you think rates will fall, you may not get the full benefit of a reduced payment.

These won't be listed in the keyfacts documents.
Fee or charge	What's it for?	How much?
Estate agency fee	Marketing and selling your home.	Typically 1-3% of the selling price; ask for a quote and shop around.
Stamp duty land tax (known simply as stamp duty)	Tax payable to the government when you buy a home. Make sure this is in your budget if it applies to you - the cost can be high. It is the buyer who pays stamp duty, not the seller.	Varies depending on purchase price of property see HMRC website.
Legal fees	Paid to your solicitor to represent you, negotiate for you, and carry out the necessary searches, land registry and so on. This is also known as conveyancing.	This usually will vary according to the firm. Budget for at least £400 and possibly more. Ask for quotes.
Survey fee	Your lender will carry out a valuation visit (see above), but this is only a very basic inspection. You may want a Homebuyers report or a structural survey if you want a detailed report on the condition of the property.	This will vary according to the surveyor, the size of property and the type of report you need. Ask for quotes.
Removal costs	Moving all your belongings from your old home to your new one.	Costs will vary, although you can save money by packing up everything yourself. Ask for quotes.

All mortgage-related fees will be set out in the keyfacts documents. They may include any of the following:
Fee or Charge	What is it charged for?	How much can it be
"Mortgage advisor or broker fee (if you use one)	For arranging the mortgage or giving you advice.	This depends on the broker, but if they charge (some don't) they must tell you in the keyfacts about our mortgage services document.
Mortgage or Loan booking fee or arrangement fee	A fee charged by the mortgage lender, usually to reserve your mortgage funds or to cover the distribution/administration costs of processing your mortgage loan. For some lenders, the fee may also be linked to special deals with a lower initial interest-rate.	This varies, but £200-£700 may be a typical amount. Where the fee is linked to a special deal it may be even higher, £2,000-£3,000 or more. These large fees can significantly increase the overall cost, particularly if you add the fee to the loan – and so pay interest on it. Use the total cost information in section 5 of the keyfacts about this mortgage document to find out the overall cost.
Valuation fee	This is the fee a mortgage lender may charge for a valuation of the property to assess whether it is appropriate security for the mortgage.	This varies from lender to lender, and on the value of the property.
Higher lending charge	If you're borrowing a high percentage of the value of the property, the lender may charge a fee to take out insurance cover. This protects them in case you can't pay back your loan and they have to sell your house at a loss.	This will depend on how much you borrow, and how much you're contributing as a deposit.
Fee for making your own buildings insurance arrangements	A fee charged by a lender for the administration costs of checking there is sufficient buildings insurance cover if you do not insure your property through the lender.	Typically £25 but may be payable yearly or each time you change insurer.
Telegraphic transfer fee	A possible charge from your lender if you need them to transfer the mortgage funds to your solicitor on the same day.	Typically £40-£50.
Re-inspection fee	Sometimes a lender will need to re-inspect the property after the original valuation, usually to check if you've made agreed repairs.	Typically £50-£100.
Early repayment charge	If you repay all or part of your mortgage earlier than the agreed term.	This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Early repayment charge	If you repay all or part of your mortgage earlier than the agreed term.	This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Fees to repay the mortgage (known as exit administration fees)	A fee to your lender when you repay your mortgage, even if you are not repaying it early.	Typically £75-£300 (plus any early repayment charge, if applicable).

UK Mortgage n Loans

Barclays Woolwich: Buy to Let Mortgage Guide

The basics:

Rental cover:

General advice:

Remember:

Barclays Woolwich Remortgaging

Remortgaging could save you money - and it may be easier than you think.

When should I consider remortgaging?

What to think about before remortgaging

How it works

Woolwich Switch & Save®

Barclays Woolwich Mortgage Selector: Which Mortgage is right for me?

Confused by the range of mortgage options? Read our beginner's guide.

Repayment methods

Interest rates

Remortgaging

How we can help

Barclays Woolwich Mortgage Explained

Barclays Woolwich Mortgage: Property Ladder-2

Joint tenancy agreements

Tenancy in common

Pros

Cons

Some other options

Key workers

The programme offers:

Shared Ownership

How it works:

Need to know:

Find out more

Barclays Woolwich Mortgage: Property Ladder

Are you finding it hard to get a foothold on the property ladder?

Buying with others

It works like this:

How it works

Checklist for Buying a Home

Buying a home checklist Property details

Your views - make notes and mark out of 10

EXTERIOR

INTERIOR

LOCATION

Barclays Woolwich Mortgage FAQ- 2

Barclays Woolwich Mortgage FAQ

Barclays Woolwich Mortgage Glossary

Barclays Woolwich Mortgage Reserve

Barclays Woolwich: Buy to Let Mortgage

The basics:

Rental cover:

General advice:

Remember:

Ready to apply?

Case Study Example: Barclays Woolwich Offset Mortgage

Case study: Sarah and Simon's story

Barclays Woolwich Offset Mortgage

Offset Tracker mortgage

With Offset Tracker mortgage mortgage you can:

Barclays Woolwich Remortgaging

10-year fixed Remortgage Plan

Lifetime Tracker Remortgage Plan

Mortgage Reserve

Barclays Woolwich: Fixed Rate buyer mortgages

What the fixed rate mortgages offer:

1-year Fix and Track

2-year fixed rate

5-year fixed rate

10-year fixed rate

Early Repayment Charges:

Barclays Woolwich: First-time buyer mortgages

2-year fixed rate

Barclays Woolwich Mortgages: Buying your first home

Buying Your First Home:

What Woolwich mortgages give you:

1. First-time buyer mortgages

2. Fixed-Rate Mortgages

Alliance Leicester Guide to remortgaging

Alliance Leicester guide to moving home-2

Apply for your mortgage

Don’t forget insurance

What happens next?

Buying a home checklist

Property details

Repayment Methods

Repayment Mortgage