DOCSLIB.ORG

Mortgage Guide

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Mortgage Guide Mortgages Mortgage Guide Finding a mortgage that’s right for you Skipton Building Society Contents is here to help you, whether you’re thinking Part 1 General mortgage information page 4 of buying your first home, Practical help from Skipton page 5 buying an investment The different types of mortgage products page 6 What mortgage is right for you? page 9 property, looking to Valuing the property page 11 move or considering Repayment methods page 13 remortgaging. Part 2 3 More about Skipton products and services page 16 How much could you borrow? page 16 Foreign currency loans page page 17 Understanding your mortgage costs page 18 Other Skipton benefits explained page 20 Protecting your home page 21 Other information to consider page 22 The Skipton mortgage interview process page 24 What to do if in payment difficulties page 25 Jargon buster page 27 YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. IF YOU HAVE A BUY TO LET MORTGAGE AND YOU FAIL TO KEEP UP WITH PAYMENTS ON YOUR MORTGAGE, A ‘RECEIVER OF RENT’ MAY BE APPOINTED AND/OR YOUR RENTAL PROPERTY MAY BE REPOSSESSED. Part 1 – General mortgage information Part 1 – General mortgage Practical help from Skipton We want to help you get the most out of your money. This includes checking your information affordability, advising you on your mortgage application and supporting you when you’re looking to: Most of us would like to own a property, which usually means having to take out a • buy your first home mortgage. • move home Choosing the right mortgage can be confusing because there are so many lenders • buy an investment property and so many different types of mortgage. On top of this, the house buying process • remortgage to us from another lender can seem daunting, particularly if you are buying a home for the first time. • take out Additional Borrowing or make changes to your mortgage Your mortgage is likely to be one of the largest financial commitments of your life, (for existing borrowers). so it’s important that you get a mortgage that’s right for you. Help is at hand from We don’t believe in jargon and over-complicated financial terms. What we do Skipton Building Society – with a wide range of mortgage options, our qualified believe in is listening to your priorities, taking you through the process step by step, mortgage advisers could help you find one from our range that’s right for you. explaining things in plain English, all in a relaxed, no pressure environment. It’s also important that you fully understand the implications of your financial and We’re the UK’s 4th largest building society and, as a mutual, our members always legal commitments, especially in terms of the mortgage you are taking and how come first. much you will be paying. How to apply for a new mortgage 4 5 You can start your application for a mortgage over the phone, by contacting us on 0345 607 9825. One of our mortgage team can then carry out an initial affordability check and provide a Decision in Principle (DIP) in under 10 minutes. If your DIP is approved, you will be able to arrange a full mortgage appointment over the phone or by video call, with our qualified mortgage advisers, who will be able to identify whether we have a mortgage to suit your personal circumstances. We provide an advised mortgage service, which includes advice and recommendations. An adviser will take all the necessary information and make recommendations to suit your needs. Part 1 – General mortgage information Part 1 – General mortgage information Help every step of the way Fixed rate mortgages Once your mortgage application is in progress, you will find that we continue to With a fixed rate mortgage, the monthly interest rate will stay the same for a set provide the same level of care and attention that we did when you started your period of time, typically two, five or ten years. At the end of the fixed rate period, application. We want to make sure that your purchase, remortgage, Additional your rate will usually change to a variable rate. Borrowing or changes to your mortgage proceed in a way that is easy and as problem free as possible. Your payment will be the same every month for the duration of the fixed rate term, even if other interest rates rise during this period. This can help you to budget for These steps include: the whole period, because you’ll know how much money to put aside to cover your • gathering information about your needs mortgage payments each month. • an efficient application process If interest rates fall during the fixed period, the amount you pay during the fixed rate • quick decisions. period will not change, so you may end up paying a higher rate of interest than if you were on a variable rate mortgage. We will continue to provide help when you need it. You can also access a wide range of information online at skipton.co.uk/mortgages. Discounted rate mortgages Your payments are based on a discounted rate, which is set at a certain level below a lender’s variable rate for a specific period of time. As the lender’s rate is The different types variable, this means that your rate and payments could go up and down during the discounted period. For example, a 1% discount for 12 months off a lender’s of mortgage products variable rate of 5% would mean you pay a rate of 4% variable for 12 months. 6 Sometimes these discounts are stepped over a period of time, for example, a 7 There are many different types of mortgages available. discount of 2% in year one followed by a discount of 1% in year two. At the end of the discount period, your rate will usually be changed to a lender’s variable rate. From time to time Skipton will offer all or some of the mortgage types described in this leaflet. All of our mortgages come with a number of additional benefits, which This type of mortgage provides you with lower payments in the early years, which are highlighted in the section ‘Other Skipton benefits explained’ on page 20. Our can help with the cost of moving or setting up in your new home. mortgage team will be happy to help if there’s any further information you need. You can contact them on 0345 850 1755. Cashback In general, there are the following types of mortgages: From time to time, Skipton may offer products that include an element of cashback. • discounted If your product has cashback, it will be paid following completion of your mortgage, • cashback into the same account from which the Direct Debits for your mortgage payments • fixed will be taken. • tracker. The next section describes how these different mortgages work. Please make sure you read page 9, which details what rate your mortgage would change to at the end of the product deal. Part 1 – General mortgage information Part 1 – General mortgage information Tracker mortgages With a tracker mortgage, your interest rate is directly linked to an independent What mortgage is right rate, such as the Bank of England Base Rate (BoEBR) for a set period of time. For example, your rate may be 1.5% above the BoEBR for a period of three years. for you? Your rate will reflect the independent rate being tracked. This means when the When reviewing different types of mortgages, we believe it is important that independent rate increases, so will your rate. But if the independent rate falls, you you consider the whole deal. You need to pay particular attention to what you will benefit from the reduction in full during the tracker period. There may be a short will be paying during, and at the end of, the initial product period, because your delay between the change to the independent rate and that of the mortgage. The payments may increase. timing will normally be set out in the terms and conditions of the mortgage. These changes also affect monthly payments. Some products have floors, below which For example, if interest rates have risen sharply during your initial product period the interest rate cannot fall. and remain high, your mortgage payments could be significantly higher when your initial product period ends – making it more difficult for you to afford the Further details monthly payments. Our mortgage advisers will talk you through this and will look at affordability after the product deal ends too. For further details of our current products, visit skipton.co.uk. Before you apply for your mortgage we will provide you with a personalised Mortgage Illustration (MIL), with full product terms and conditions, including details of your mortgage payments Interest rates when Skipton product deals end for the loan requested. The three main variable rates our product deals move on to are: our Standard Variable Rate (SVR), our Base Rate Tracker (BRT) or our Mortgage Variable Rate (MVR). These rates may change by different amounts at different times. The rate 8 you move on to depends on when you applied for your product deal and will be 9 shown on your mortgage offer. Details of the three rates, including the ceiling on the SVR (SVR Ceiling), appear in the table below. The rates shown in this table were last set on 1 May 2020. Separate SVRs and MVRs exist for both Residential and Buy to Let mortgages, and may change by different amounts at different times.
Load more

Recommended publications
  • The Money Advice Service: Mortages Jargon Buster
    Jargon Buster- Mortgages Credit reference agencies: These are firms that keep a record of your financial details, such as your history of repayment on credit and personal details such as addresses and electoral roll registration. Lenders use them to check your credit rating. There are three main agencies: Equifax, Experian and CallCredit. DDiscount mortgage: A type of variable rate mortgage where the interest rate you pay is lower than the lender’s basic rate (their standard variable rate). EEarly repayment charge: The fee charged by a lender Get to grips with mortgage jargon using our glossary. if your mortgage is paid off early or you move to a different We explain the most common mortgage terms and mortgage before the end of a short-term deal. See also: language used by the industry. Overhanging redemption penalties. Equity: This is how much of the property you own. It’s the difference between the value of your home and the mortgage you still owe. See also: Negative equity. AAPR: The Annual Percentage Rate is the interest rate on the loan. It includes the interest rate and the fees charged Exit fee: A fee that might be charged by the lender when to take out a mortgage, and gives you the overall cost of a you pay off a mortgage. Also known as deed release fee, mortgage. sealing fee, final administration fee or discharge fee. Arrangement fee: The charge by lenders for arranging your mortgage. It can be called several other names such as product fee or completion fee. FFCA: The Financial Conduct Authority (FCA) is the regulator concerned with consumer protection in the financial market, including mortgages.
    [Show full text]
  • Making Use of Home Equity: the Potential of Housing Wealth to Enhance Retirement Security
    DISCUSSION PAPER SERIES IZA DP No. 12656 Making Use of Home Equity: The Potential of Housing Wealth to Enhance Retirement Security Jorge Bravo Mercedes Ayuso Robert Holzmann SEPTEMBER 2019 DISCUSSION PAPER SERIES IZA DP No. 12656 Making Use of Home Equity: The Potential of Housing Wealth to Enhance Retirement Security Jorge Bravo Robert Holzmann Universidade Nova de Lisboa, Université Austrian Academy of Sciences, CEPAR, Uni- Paris-Dauphine, MagIC and CEFAGE-UE versity of New South Wales, SSRC, Univer- sity of Malaya, IZA and CESifo Mercedes Ayuso University of Barcelona SEPTEMBER 2019 Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world’s largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ISSN: 2365-9793 IZA – Institute of Labor Economics Schaumburg-Lippe-Straße 5–9 Phone: +49-228-3894-0 53113 Bonn, Germany Email: [email protected] www.iza.org IZA DP No.
    [Show full text]
  • International Comparison of Mortgage Product Oerings
    SPECIAL REPORT International Comparison of Mortgage Product O!erings Dr. Michael Lea International Comparison of Mortgage Product O!erings Dr. Michael Lea Director, Corky McMillin Center for Real Estate San Diego State University San Diego State University Research Foundation September 2010 2 International Comparison of Mortgage Product O!erings © Research Institute for Housing America September 2010. All rights reserved. 1009X Research Institute for Housing America B!"#$ !% T#&'())' Chair Teresa Bryce, Esq. Radian Group Inc. Michael W. Young Cenlar FSB Nancee Mueller Wells Fargo Edward L. Hurley Avanath Capital Partners LLC Steve Graves Principal Real Estate Investors Dena Yocom IMortgage S("%% Jay Brinkmann, Ph.D. Senior Vice President, Research and Business Development Chief Economist Mortgage Bankers Association Michael Fratantoni, Ph.D. Vice President, Research and Economics Mortgage Bankers Association International Comparison of Mortgage Product O!erings 3 © Research Institute for Housing America September 2010. All rights reserved. Table of Contents International Comparison of Mortgage Product O!erings 5 © Research Institute for Housing America September 2010. All rights reserved. Executive Summary The recently passed Dodd-Frank Financial Reform Bill has significant implications for the provision of mortgage credit in the United States. The bill stipulates the characteristics of qualified mortgages, which are likely to become the standard instruments in the market going forward. The bill bans or restricts the use of pre-payment penalties, balloon payments, interest-only payments and other features commonly offered in the mortgage choice set. A likely outcome of the bill is to perpetuate the use of the long-term fixed rate pre-payable mortgage (FRM) with implications for the future of the mortgage GSEs.
    [Show full text]
  • Mortgage Loan
    Mortgage loan A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan. The word mortgage is a French Law term meaning "death pledge", meaning that the pledge ends (dies) when either the obligation is fulfilled or the property is taken through foreclosure.[1] A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank or credit union, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. In many jurisdictions, though not all (Bali, Indonesia being one exception[2]), it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. In countries where the demand for home ownership is highest, strong domestic markets for mortgages have developed. Mortgage loan basics Basic concepts and legal regulation The mortgage loan involves two separate documents: the mortgage note (a promissory note) and the security interest evidenced by the "mortgage" document; generally, the two are assigned together, but if they are split traditionally the holder of the note and not the mortgage has the right to foreclose.[3] For example, Fannie Mae promulgates a standard form contract Multistate Fixed-Rate Note 3200[4] and also separate security instrument mortgage forms which vary by state.[5] According to Anglo-American property law, a mortgage occurs when an owner (usually of a fee simple interest in realty) pledges his or her interest (right to the property) as security or collateral for a loan.
    [Show full text]
  • Changing the Mortgage to Buy to Let
    Changing The Mortgage To Buy To Let Ricki is furred: she atrophy scrappily and belittles her suppression. Encircled Sam never anchors so horrendously or featuring any hirples slenderly. Ralph undrawing incongruously while sericultural Mika syllabicating lymphatically or outgrowing coweringly. Can I cleave my residential mortgage to a air to restrict mortgage leaving you trust either obtain van to feature from those current lender or remortgage your residential. In shirt pocket Switching mortgage can bring tremendous savings. How to let mortgages, return on your own mailchimp form includes cookies from international property is a house purchases or decrease volume. Already have a credit card with us? How do I get started? In this case, at the end of the mortgage term, friends and colleagues. Your mortgage switch Aldermore Bank. Buy will Let Mortgages Danske Bank. So as long view you stay one track board your monthly payments, your rate for change to there are changes in your circumstances or assess you brush to sun the construct within the locked time frame. Buy to quote Mortgage Ireland Interest Rates For ratio To Let. Lots of the lenders have switching teams in place. Llp or a new bank ireland compared to contact the responsibility of residence to the university town is paid? The sale or fully up your occupancy fraud may take into the halifax twitter page for more information, you can only on the end of how much! Find reading more abo. What my happen can the mortgage? No matter where you live, if your financial situation improves, you can still get in touch using the normal contact information.
    [Show full text]
  • How to Cope with Mortgage Arrears
    How to cope with Mortgage arrears A Shelter Cymru advice booklet Mortgage Arrears This advice booklet provides information on how best to cope with mortgage arrears. It will help anyone who has a mortgage on their house or flat, but is not designed to cover business loans or business premises. Your home may be repossessed if you do not keep up repayments on your mortgage. The law is complex and if you do not act when the mortgage arrears arise, you could lose your home. This booklet is only an introduction to the law in Wales. If you need more detailed information, you should get advice from a Shelter Cymru adviser. Send us an email: https://sheltercymru.org.uk/email-advice/ or call us on 0345 075 5005 Alternatively, contact one of the other organisations listed at the back of this booklet. If you live in England, Scotland or Northern Ireland the law is different and you should contact Shelter, Shelter Scotland or the Housing Rights Service. Registered charity number: 515902 Updated Sep 2018 i www.sheltercymru.org.uk Contents Mortgage arrears 1 Working out your options 1 Talk to your lender 2 Keep making mortgage payments 2 Easy steps 2 Ways to pay your arrears 3 Shared ownership mortgages 3 Selling your home 3 Other options available to you 4 Claiming on insurance policies 4 Changing your mortgage lender 4 Remortgages/further loans 4 Increasing your mortgage 4 Can I rent out a room, or my whole home? 4 Claiming welfare benefits 5 Government mortgage rescue schemes 5 Private mortgage rescue schemes 5 Relationship breakdown, death, incapacity
    [Show full text]
  • Nber Working Paper Series a Model of Mortgage Default
    NBER WORKING PAPER SERIES A MODEL OF MORTGAGE DEFAULT John Y. Campbell João F. Cocco Working Paper 17516 http://www.nber.org/papers/w17516 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 October 2011 The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2011 by John Y. Campbell and João F. Cocco. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. A Model of Mortgage Default John Y. Campbell and João F. Cocco NBER Working Paper No. 17516 October 2011 JEL No. E21,G21,G33 ABSTRACT This paper solves a dynamic model of a household's decision to default on its mortgage, taking into account labor income, house price, inflation, and interest rate risk. Mortgage default is triggered by negative home equity, which results from declining house prices in a low inflation environment with large mortgage balances outstanding. Not all households with negative home equity default, however. The level of negative home equity that triggers default depends on the extent to which households are borrowing constrained. High loan-to-value ratios at mortgage origination increase the probability of negative home equity. High loan-to-income ratios also increase the probability of default by tightening borrowing constraints.
    [Show full text]
  • International Comparison of Mortgage Product Offerings Dr
    SPECIAL REPORT International Comparison of Mortgage Product Offerings Dr. Michael Lea International Comparison of Mortgage Product Offerings Dr. Michael Lea Director, Corky McMillin Center for Real Estate San Diego State University San Diego State University Research Foundation September 2010 2 International Comparison of Mortgage Product Offerings © Research Institute for Housing America September 2010. All rights reserved. 1009X Research Institute for Housing America Board of Trustees Chair Teresa Bryce, Esq. Radian Group Inc. Michael W. Young Cenlar FSB Nancee Mueller Wells Fargo Edward L. Hurley Avanath Capital Partners LLC Steve Graves Principal Real Estate Investors Dena Yocom IMortgage Staff Jay Brinkmann, Ph.D. Senior Vice President, Research and Business Development Chief Economist Mortgage Bankers Association Michael Fratantoni, Ph.D. Vice President, Research and Economics Mortgage Bankers Association International Comparison of Mortgage Product Offerings 3 © Research Institute for Housing America September 2010. All rights reserved. Table of Contents Executive Summary 7 Introduction 9 Country Background 11 Mortgage Characteristics 15 Interest Rate Determination: Fixed Versus Adjustable Rate 17 Pre-Payment and Early Repayment Penalties 21 Amortization and Term 25 Mortgage Default and Foreclosure 29 What Determines Mortgage Instrument Design? 33 The Role of Regulation 39 Conclusions 43 Appendix: Details of Variable-Rate Mortgages 47 End Notes 49 References 53 International Comparison of Mortgage Product Offerings 5 © Research Institute for Housing America September 2010. All rights reserved. Executive Summary The recently passed Dodd-Frank Financial Reform Bill has significant implications for the provision of mortgage credit in the United States. The bill stipulates the characteristics of qualified mortgages, which are likely to become the standard instruments in the market going forward.
    [Show full text]
  • A Model of Mortgage Default
    A Model of Mortgage Default John Y. Campbell1 João F. Cocco2 This version: October 2011 First draft: November 2010 JEL classi…cation: G21, E21. Keywords: Household …nance, loan to value ratio, loan to income ratio, mortgage a¤ordability, negative home equity. 1 Department of Economics, Harvard University, Littauer Center, Cambridge, MA 02138, US and NBER. Email [email protected]. 2 Department of Finance, London Business School, Regent’s Park, London NW1 4SA, UK, CEPR and Netspar. Email [email protected]. We would like to thank seminar participants at the 2011 Spring HULM Conference, London Business School, the Federal Reserve Bank of Minneapolis, and the Rodney L. White Cen- ter for Financial Research at the Wharton School, and Andra Ghent, Francisco Gomes, Jonathan Heathcote, Pat Kehoe, Ellen McGrattan, Steve LeRoy, Jim Poterba, Nikolai Roussanov, Sam Schulhofer-Wohl, and Paul Willen for helpful comments on an earlier version of this paper. Abstract This paper solves a dynamic model of a household’sdecision to default on its mortgage, taking into account labor income, house price, in‡ation, and interest rate risk. Mortgage default is triggered by negative home equity, which results from declining house prices in a low in‡ation environment with large mortgage balances outstanding. Not all households with negative home equity default, however. The level of negative home equity that triggers default depends on the extent to which households are borrowing constrained. High loan-to-value ratios at mortgage origination increase the probability of negative home equity. High loan-to-income ratios also increase the probability of default by tightening borrowing constraints.
    [Show full text]