MORTGAGES AND RE-MORTGAGES

Access specialist advice and a wide range of mortgage and re-mortgage deals from lenders across the market.

Wading through the options

Mortgages are one of the largest single transactions in most people’s lives. Buying a property, commercial or personal, can be a stressful and time-consuming experience.

Banks, building societies, and smaller niche lenders compete for your business, all offering a variety of interest rate deals, associated fees and other enhancements to attract borrowers.

Finding and selecting the most suitable mortgage, rather than simply accepting a lender’s offer, can take-up a significant amount of time and consideration.

Specialist, clear and simple advice

We work with specialist mortgage brokers HCF who offer access to a wide range of mortgage and re-mortgage deals from lenders across the market. Their expert advisers will find products matched to your circumstances, presenting the options clearly and simply.

Mortgage types

There are two main methods of repaying a mortgage, repayment and interest-only. It is also sometimes possible to use a combination of the two.

Repayment (capital and interest)

Your monthly repayments consist of both interest and capital so, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly to begin with. Repayment mortgages are repaid at the end of the term providing all payments are made on time and in full.

Interest-only

As the name suggests, this method only repays the interest on the amount borrowed. At the end of the term the capital is still outstanding so you will usually need an investment policy to save up enough money to repay the mortgage at the end of the term.

Traditionally, the preferred product for repaying the capital of an interest-only mortgage was a mortgage endowment policy (which included a set amount of life cover) although more recently customers have been using Individual Savings Accounts (ISAs) and pensions to build up a sufficient sum, taking advantage of the tax breaks offered by these products.

HCF’s expert advisers will help you choose the most suitable product

They will discuss with you the factors you need to consider, such as:

The repayment method
The interest rate type
The mortgage amount
The mortgage term
Interest rates
Offers, fees and enhancements
Salaries and income
Outgoings
Any outstanding debt

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As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

Standard Variable Rate (SVR)

The SVR is the lender’s standard rate. With a variable rate mortgage you are normally able to switch lenders at any time without being penalised. If you take out a mortgage that has a fixed, tracker or discounted rate the loan will usually revert to the lender’s SVR once the set period of time ends.

Fixed Rate

A fixed rate mortgage allows you to repay interest at a fixed rate, irrespective of any interest rate fluctuations. Your monthly repayments will remain the same every month for a time period agreed between you and your lender.

Tracker

A tracker mortgage usually tracks any movement in an index specified by the lender for a set period, for example the Bank of England Base Rate, so you will benefit from any falls in interest rates, but will pay more should the rate increase.

Discount

A discount mortgage provides a discount from the lender’s SVR for a set period of time. The variable interest rate still fluctuates, meaning your monthly repayments may differ slightly from month to month, but the discount remains constant.

Charges and fees

Fixed, Tracker and Discount rate mortgages often have early repayment charges so you need to be sure this is suitable for you for the foreseeable future. The lender may also charge a booking or arrangement fee to apply for these types of mortgage. You should ask your adviser to explain these in more detail, or ask for an illustration.

Renewal time comes around so quickly but it was a simple and easy process. Given lots of time to review the renewal policy and ask any questions, which were answered very promptly. The price is very competitive too! Great service from a very good company!

- Lilian Borrows, Practice Manager, Sullivan Way Surgery