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Considerations

There is a lot to consider when you are arranging a mortgage such as

  • What type of mortgage will suit you best?
  • How much can you comfortably afford to borrow?
  • What would happen if your circumstances changed (e.g. you lose your job)?

Your Independent Financial Adviser or Mortgage Adviser should be able to help you with these and other questions, but in the meantime here are three specific issues to think about:

Early Repayment: A mortgage is usually a long term loan, typically 25 years or more. A lot can happen in that time such as your career taking off rapidly or you find yourself receiving some form of windfall payment such as an inheritance. In these circumstances you may decide you want to repay some or all of your mortgage. However, many mortgages apply charges if you repay them early, and some of these charges can be high, equating to a number of months of normal mortgage payments. It is therefore important that from the outset you understand what the level of these payments might be and the circumstances in which they may apply.

Higher Lending Charge: The loan to value ratio (LTV) shows what percentage of the value of the house the mortgage represents (e.g. a mortgage of £150,000 on a house worth £200,000 has an LTV of 75%). If the LTV is high then there is a higher risk that in the event the house has to be repossessed, the mortgage provider will not be able to sell it for a high enough price to get their money back. For this reason many mortgage providers charge an additional fee if the LTV is too high.

Insurance: When you take on a mortgage you also take on the responsibility to ensure it is repaid, but what happens if you loose your job, fall ill or worse. Remember, your home may be repossessed if you do not keep up repayments on your mortgage. To protect you and your family from the consequences of such events you should consider what insurance protection you might require such as life assurance or critical illness cover. You should also consider ensuring that your property if covered by arranging a suitable home insurance policy.

To find out about the full range of services that we offer to home buyers, please visit our What We Do section or Contact Us today. Alternatively, if you would like to know more about who we are and our fees then please see our About Us section.

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We are authorised and regulated by the Financial Services Authority. The Financial Services Authority does not regulate will writing and not all forms of long term care plans. IFM Utility Service is not authorised and regulated by the Financial Services Authority. Your home is at risk if you do not keep up repayments on a mortgage or any other loan secured on it. Think carefully before securing other debts on your home. A fee of up to £670.00 inc VAT may be charged on completion of your mortgage. A fee of 1% of advance or £1,080 inc VAT whichever is the greater may be charged on completion of your lifetime mortgage or home Reversion Plan. The Financial Services Authority does not regulate Buy to Let Mortgages.Terms and conditions apply. Written details on request. Tax relief's and allowances referred to are those currently applying and are liable to change. There value depends upon the individual circumstances of the investor.

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