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Guide to Mortgages

Mortgage Types

How much can I borrow?

Additional Information

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Below is a guide to arranging a mortgage.
For help arranging your mortgage contact Lifelink
on 01189 349800.

Mortgage Types

Discount Interest Rate Mortgage
A variable rate of interest, but set at a set percentage amount below the lender’s standard variable rate, usually for a short period of time, At the end of the initial period, the mortgage reverts to the lender’s variable mortgage interest rate. There are often early repayment charges if you wish to pay back (redeem) your loan before the end of the discounted rate period. In some cases these charges also apply for a short period thereafter.

The main factor influencing the interest rate on variable interest rate mortgages is the case rate set by the Bank of England. There is, however, no guarantee that a change in the Bank base rate will necessarily mean a change in mortgage rates.  A Tracker interest mortgage rate is set at a certain percentage above or below Bank base rate, and this percentage difference is fixed – so if the base rate drops by 0.25%, your Tracker Mortgage rate drops by 0.25% too and vice versa.

Fixed Interest Rate Mortgage
Set at a fixed rate that may be below the lenders standard variable rate, usually for a short period of time.  At the end of the set period, the mortgage reverts to the lender’s variable interest rate.  There are often early repayment charges if you wish to pay back (redeem) your loan before the end of the initial incentive period in some cases these charges also apply for a short period thereafter.

Capped Interest Rate Mortgage
These rates limit your payments to fluctuations between a maximum and minimum interest rate for a set period of time.  These rates may only be available at certain times depending on mortgage market fluctuations and may also incur early repayment charges if you wish to pay back (redeem) your loan before the end of the capped/collar rate period.

Offset of Current Account Mortgages
This is a fully flexible mortgage, which allows you to keep balances (such as the mortgage, savings and current account) in separate accounts, but, for the purposes of interest calculation, all balances are aggregated. Credit in savings and current account are offset against the mortgage, with interest only being charges on the reduced balance. This type of mortgage gives you total flexibility to access your savings, whilst making significant long term savings on interest charges.

Cashback incentives
With ‘cashback’ the lender usually gives you money when you complete on the mortgage.  In return you are usually tied to the standard variable rate for a set period, and have the repay some or all of the cashback if you wish to pay back/redeem your loan sooner.

How much can I borrow?

Affording the payments
A priority in considering the amount you borrow is ensuring that you can sensibly afford the monthly mortgage payments.  We will work out the maximum you can borrow based on your income and will also ask about your other financial commitments.

Use this list to work out how much your total monthly outgoings are likely to be and how much you would have left before making any mortgage payments.

To work out how much you can afford, pass this information to a Lifelink Adviser who will be happy to advise you.

Item

Monthly Costs

Investments

£

Life Policies/Health Cover

£

Personal Pension

£

Loans/Hire Purchase

£

Gas/Electricity

£

Water

£

Council Tax

£

Food/Groceries

£

Clothes

£

Telephone

£

TV/Video

£

Car running costs

£

Travel to work

£

School/Nursery fees

£

Entertainment

£

Clubs/Hobbies

£

Holidays

£

Other

£

Total (a)

£

Your monthly income (b)

£

Balance (b-a)

£


As part of our service to you, we will be able to assess how much you can afford to pay and will only advise a mortgage that you can afford.

Additional Information

Remember to let everyone know your new address - use the following list to remind you:

  • Bank or Building Society
  • Clubs & Societies
  • Dentist
  • Doctor
  • DVLA
  • Electoral Roll & Council Tax
  • Electricity Company
  • Employer
  • Gas Company
  • Inland Revenue
  • Insurance Company
  • Library

Don’t forget family and friends!!

Budgeting for your move

This list should help you identify the main costs involved in your actual move, for which you will need to budget. You may also want to pay for improvements to your home.

If you are buying

 

Initial Deposit

£

Legal Fees

£

Main Deposit

£

Valuation Fees

£

Stamp Duty

£

Total

£

If you are selling

 

Legal Fees

£

Estate Agent Fees

£

Removal Costs

£

Other Contingency

£

Total

£

If you require further guidance on how much you are likely to pay your Lifelink consultant will be able to guide you.

Your home may be repossessed if you do not keep up repayments on your mortgage
There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be up to 1% of the loan amount. 
Our typical fee will be 0.5% of the loan amount.