mortgages and re-mortgages

mortgage and re-mortgages

Whether you are a first time buyer, moving to another house or just re-mortgaging Bollington Money can help. We are able to search the whole of the market for the best deal to suit your circumstances whether you have had credit problems in the past or not.

mortgage overview

The following information has been produced to give a clear, informative overview of what is involved in both a Mortgage and a Re-Mortgage.

• what is a mortgage?
• types of mortgage
• adverse and specialist mortgages
• types of interest rates
• important considerations
• fees and charges

what is a mortgage?

A mortgage is taken out when you purchase a property. It is like any other loan i.e. you borrow money, and you pay it back with interest over a specified period of time.

A mortgage is secured against your home, if for any reason you can’t repay it, the lender can sell your home to recover their money.

what is a re-mortgage?
Often people change mortgages to get the best mortgage deal and save money; others as a way to get some extra cash. This is a re-mortgage as with a mortgage all the monies borrowed are secured against your home. what is a further advance?
Your exisiting lender can make available additional funds on top of your current borrowing, this is included within the first charge on the property. A further advance can be used to consolidate debt or pay for improvements to the property. Any additional borrowing is secured against your property.

types of mortgage

There are basically two types of mortgages: Repayment (also known as Capital and Interest), and Interest Only.

repayment mortgage
With a repayment mortgage you pay part of the interest and part capital to the lender each month and in this way the capital debt that you borrow is reduced until the loan is repaid.

interest only
Each month only the interest is paid to the lender, you are not reducing the loan itself. With an interest only mortgage the capital amount is payable at the end of the term, as such it is highly important that provisions are made to re-pay the loan at the end of the term.

It is possible for a Mortgage or Re-mortgage to be arranged as a split between capital re-payment and interest only.

adverse and specialist mortgages

adverse mortgages
An adverse mortgage is also known as a bad credit or sub-prime mortgage and is mainly designed for people with a poor credit rating or history. Not all lenders offer this type of mortgage; there are a number of lenders who specialise in this area accessible via an intermediary such as our selves.

Exact details of the mortgages available to you will vary dependant upon your individual circumstances, our fully qualified mortgage advisors will assess your situation and provide you with full details

specialist mortgages
These are sometimes referred to as non conforming mortgages and fall outside of the criteria of most high street lenders. There are a number of lenders that are able to offer a competitive mortgage to suit your needs. Non confirming mortgages may include:

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self certification mortgages
This is where you confirm your income without the need for independent verification and are generally for self-employed people, those who have irregular earnings, or those whose income comes from a number of different sources.

unusual property type mortgages
Unusual homes or those made from a non standard construction type (i.e. Concrete) may need a special type of mortgage.

sharia law mortgages

Sharia Law is traditional Islamic Law and this type of mortgage complies with Islamic Law.

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buy to let mortgages
These are mortgages specifically designed for people who want to invest in the property market by purchasing one or more houses and letting them out to tenants. Most buy-to-let mortgages only allow a limited amount of borrowing against the property, usually up to 80% of value of the property. Rent often has to be 125% - 150% of the monthly repayment (although this has recently relaxed because of rising house prices).

right to buy mortgages

The right to buy scheme was introduced by the government and allows council tenants of five years or more the option to purchase their council property at a discounted price. Not all lenders offer this type of mortgage; however we have access to a number of lenders that do.

types of interest rates

standard variable rate
Payments move up or down with the lender's own mortgage rate, this is usually driven by the Bank of England base rate.

For the following rates there is often a tie in period which can be for the length of the special rate and can incur early repayment charges should you chose to pay your mortgage or move lenders within this time.

In certain circumstances there may be an early repayment charge overhang which ties you into the mortgage for a period after the special rate has finished.

discounted interest rate
This is usually a rate that is discounted by a fixed amount (or percentage) from the lenders standard variable rate.

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tracker rate
This is a variable rate loan with an interest rate that is at a set amount above or below the Bank of England base rate (or some other base rate, set independently from the lender). It is guaranteed to move up or down with that rate.

fixed interest rate
rate of interest is fixed for a certain period of time.

capped rate
This is a variable rate mortgage which is guaranteed not to exceed a specified rate regardless of the lender’s own variable rate. In some cases these mortgages are “Collared” this means that there is a point at which your rate will not reduce beyond regardless of the lender’s own variable rate.

important considerations

Whether you are looking for a Mortgage or a Re-mortgage there are a number of factors that it is important that you consider carefully:

how much do you need to borrow?

how much can you afford?
It is important that you think carefully about all of your outgoings and the amount you are comfortably able to pay on your mortgage each month.

how do you want to repay your mortgage?
What mortgage type is most appropriate for your circumstances?

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are your circumstances likely to change?
If so will this affect your ability to make your monthly mortgage payments?

how long do you want to be paying?
The “term” over which you mortgage is taken out will depend on your personal circumstances i.e. when you intend to retire, your current age, etc.

At Bollington Money our fully qualified Mortgage Advisors will ensure that all these considerations, along with other important factors are taken into account when searching and selecting your product.

fees and charges

There are often fees and charges associated with a Mortgage or Re-Mortgage your Mortgage Adviser will go through all fees and charges at the outset. Fees and charges will vary dependant on the mortgage product and your personal circumstances.

Some of the typical fees that may be charged include:

Arrangement Fee
This is an upfront charge made for a particular mortgage deal charged by the lender. Fees vary from one product to the next, full details will be listed on you KFI. Arrangement fees are usually not due until completion and can often be added to the loan.

Higher Lending Charge (HLC)
A Higher Lending Charge is a charge which you may have to pay if you are borrowing a high percentage of a purchase price or property valuation. This charge may either be added to the loan or deducted from the advance on completion.

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broker fee
This is a charge made by Bollington Money as a Broker for working on your behalf, the amount charged will vary but is typically between £495.00 and £3,500.00. This fee covers sourcing, advice, recommendations, administration and processing the application direct with the lender. In some cases the Broker Fee will cover the cost of the property valuation and legal costs.

legal costs
Moving house or just your mortgage can result in legal costs. In some cases the lender will offer a “Free Legals” scheme. In other cases it is possible for Bollington money to include some or all solicitor costs within the Broker Fee.

valuation fee
When you take out a mortgage or move your exisiting mortgage to a property valuation is necessary. The charge for this is ordinarily included in the Broker Fee. Occasionally there are exceptional circumstances where a charge may be necessary.