Barclays Woolwich: Buy to Let Mortgage Guide

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

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.

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 Mortgage Glossary

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

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

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

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

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

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

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

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

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

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

Alliance Leicester Guide to remortgaging

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

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

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

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

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

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

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

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