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Your home may be repossessed if you do not keep up repayments on your mortgage



APR (Annual Percentage Rate) – The Annual Percentage Rate (APR) is the yearly cost of your mortgage and includes interest, certain fees associated with the mortgage plus on-going costs. The APR is the way you can compare the cost of different mortgages.

Annual Interest (also known as annual rest) – This is where interest is charged on the mortgage balance outstanding on the last day of the preceding calendar year, together with interest on any sum advanced to you during the year, from the date the advance is made. Payments must be made monthly, but the new balance will only be calculated once at the end of each year. On annual interest, making monthly payments will not reduce the balance on which interest is charged until the end of each year.

Annual Review Scheme – If your mortgage operates on the Annual Review Scheme, your monthly mortgage payments are reviewed once a year, usually with effect from March. We look at your balance and all interest rate changes over the previous 12 months to decide your payments for the coming year. We will inform you of your new payments when we send you your annual mortgage statement, usually in February.

Arrangement Fees (also known as product arrangement fees) – This is the fee charged for providing a mortgage. This usually applies to loans where a special interest rate applies e.g. fixed, discounted and tracker. It may be paid on or before completion although some lenders may require payment before completion. It may be refundable if the mortgage does not complete. You should check when this is payable with your lender before proceeding.

Arrears – This refers to any outstanding payments on the mortgage account; usually where the customer has either missed or underpaid one or more required regular payments.

Bank Base Rate (BBR) – Also known as the Bank of England (BoE) base rate. This is the interest rate set by the Bank of England.
Bank Base Rate (BBR) or Bank of England Base Rate (BoE) Tracker Mortgage – This is a type of mortgage where the interest rate charged will be set at a fixed percentage above, below or at the BoE base rate and will follow it if it rises and falls.

Benefit Period – This is the length of time that a discounted, fixed, tracker or capped rate applies to a mortgage. For example, a mortgage with a two-year fixed rate would have a benefit period of two years.

Booking Fee – This is a one-off fee payable on application for a mortgage. It’s not normally refundable, even if the mortgage does not complete. You should check this with your lender before proceeding.

Broker – A mortgage broker is an intermediary who helps you find and apply for a mortgage.
Buildings Insurance – Buildings insurance must be taken out as a requirement of the mortgage. It should cover the full cost of rebuilding the property.

Buy to Let – A mortgage used to buy property which is to be used solely for the purposes of renting out to a third party individual.

Capital – Any sum of money lent to you by a lender– ordinarily to purchase a property or on a remortgage transaction to repay another lender.

Capital & Interest Mortgage – A type of repayment method where regular payments of both interest and capital is paid over a fixed term. This should ensure the full balance is repaid over this term.

Capped Rate Mortgage – This type of mortgage sets a cap on the level the interest rate can rise during a selected period. A capped and collared mortgage sets a minimum as well as a maximum rate for this period.

Completion – The final stage of the conveyancing process after exchange of contracts – when keys change hands (on a sale or purchase) and your mortgage is set up.

Conveyancing – Conveyancing is the legal process necessary wherever property or land is bought or sold. This is most often carried out by solicitors or licensed conveyancers on behalf of buyers and sellers.

Daily Interest (also known as daily rest) – Interest is calculated on the amount owing on your mortgage at the end of each day. The interest is charged to your account daily, increasing the balance by the amount of interest. Payments must be made monthly and will be credited to your mortgage to reduce the balance on which interest is charged, from the day when the payment was credited. On daily interest, making payments as early as possible in the month will reduce the balance and the amount of interest charged.

Discounted Rate Mortgage – If you have a discounted rate mortgage, for a fixed period of time you will be charged an interest rate that is lower than your lender’s standard variable rate (SVR) but which will rise or fall in line with it. Once the discount period is over, in many cases you will be charged the SVR. You should check the details with your lender before proceeding.

Early Redemption Charge – If you pay off your mortgage before the end of the term there may be a fee. This may be in addition to any specific charges in respect of individual product terms and conditions.

Early Repayment Charge – Many products are offered with highly competitive incentives at the start of a mortgage term. Such products can only be offered on the assumption that you keep your mortgage with your lender for a fixed period of time. In such circumstances, although you may be able to move house and/or remortgage at any time with some lenders, an early repayment charge will be incurred if you repay (or in some cases, partly repay) the capital within the early repayment period.

Endowment Mortgage – An endowment policy is a savings plan you can take out to repay the capital of your mortgage if you have an interest only mortgage or part interest only mortgage.

Equity – The difference between the current market value of your property and your mortgage loan held against that property.

Exchange of Contracts – This is the process where both parties formally agree to the sale / purchase of a property and set a completion date. Normally, this is arranged through a solicitor or licensed conveyancer.

First Time Buyer – A customer who is buying a property for the first time. Some lenders have special deals available for First Time Buyers.

Fixed Rate Mortgage – This type of mortgage fixes the interest rate on a mortgage for a set amount of time. This can be between 2 and 10 years.

Freehold – This is when you own the property and the land it is situated on.

Guarantor – This is someone who makes an official agreement to be responsible for money that someone else owes. For example, a parent could act as a guarantor for their child buying a home.

HomeBuyer’s Report/Survey – A report on the condition of the property, helping you to make an informed decision on whether to purchase a house or not. This survey will highlight any problems that are visible to the surveyor.

Higher Lending Charge – This is a charge sometimes made by a lender to protect them in case you fail to repay the mortgage.

Initial Interest Payment – Any payment due for the period from the day the mortgage commences up to the first full monthly payment.

Interest – As well as paying back the capital you borrow, you will also have to pay interest on the loan. This may be calculated on a daily or annual basis, depending on the specific terms and conditions of the mortgage.

Intermediary – An adviser who helps you choose the mortgage that’s right for you and make your application to the lender.

Joint Mortgage – This is a mortgage you take out with another person, for example your spouse, partner or a friend.

Illustration – The Financial Conduct Authority has designed a Key Facts Illustration which is used by a lender to ensure that you receive consistent illustrations, with content shown in the same way, allowing you to compare different mortgages.
You must have personalised product information, in the form of a Illustration, at an early stage in the buying process, to ensure an easy comparison of different products. It also ensures you receive the information you need to decide whether to apply for a particular mortgage.

Leasehold – Leasehold means that someone else owns the land the building is on. This is usually the case with flats although it may occur with other types of properties. There is usually a Ground Rent to be paid to the Freeholder and there may also be other charges such as service charge and insurance. The longer the term of the lease the better the security is to you and your lender.

Legal Fees – These are charged by a solicitor or other qualified individual to carry out the legal work associated with buying a house.
LTV (Loan to Value) – Often referred to a LTC, Loan to Value is a percentage figure used to express the amount of the loan as a proportion of the property’s value. Different mortgage products can have different maximum LTV’s – meaning that the minimum amount of deposit required (when buying a new home) can vary from one type of product to the next.

Local Search – Comprises a request for a variety of information from the relevant local authority, including information on planning matters and the maintenance of roads in the vicinity of a property. Local searches will usually be carried out by your legal representative.

Local Search Indemnity – Where no Local Search is made, usually on a remortgage transaction, an insurance policy can be put in place (usually for the benefit of both lender and borrower) to cover against any risks that may have been revealed by a local search.

Mortgage Advisor – This is a mortgage specialist who will help you in arranging your mortgage.

Mortgage Term – This is simply the number of years over which it is

Negative Equity – If the market value of your home is less than your mortgage, you will be in negative equity. For example, if your mortgage is £75,000 but your home is only worth £65,000 you will have negative equity of £10,000.

New-build Properties – A property which was first occupied less than six months ago.

NHBC Guarantee – A 10-year guarantee, provided by the National House Building Council, that the builder will put right serious defects on a newly-built property.

Non Annual Review – If your mortgage does not operate on the Annual Review Scheme your monthly payment will be amended when interest rates change. We will write to you when this happens.

Offset Mortgage – A type of mortgage which offsets the amount of a borrower’s savings against the amount of the mortgage loan, reducing the interest charged on the mortgage.

Overpayment – Any additional payment made to your mortgage account above your required monthly mortgage repayment.

Portability – Portability means you can transfer your current mortgage, i.e. mortgage product, to another property.

Redemption – Repayment of a mortgage in full, including interest and costs.

Redemption Statement – A settlement statement showing the amount that is needed to pay off your mortgage in full or for a given part of the loan.

References – The checks which a lender makes before making a formal mortgage offer. These might include asking your employer to confirm your income, as well contacting credit reference agencies.

Remortgage – This is the process of changing from one mortgage to another, possibly with a new lender.

Stamp Duty – A tax that a borrower may need to pay when they buy a property. It is charged as a percentage of the purchase price. The percentage can vary depending on the purchase price.
Standard Variable Rate (SVR) – This is a lender’s base lending rate. Mortgages will usually revert to the Standard Variable Rate after a Benefits Period.

Telegraphic Transfer – Completion funds can be sent by Telegraphic Transfer. This is a bank transfer from the lender to the completing solicitors to enable them to have cleared funds on the day of transfer. The funds are generally issued prior to completion. A fee may be charged and deducted from the advance amount for this service.
Term -This is the length of time you wish to repay their mortgage over, for example 25 years. This can sometimes be extended up to the age of retirement. If it is a capital and interest mortgage you will pay back capital and interest each month and at the end of the mortgage term the balance should be zero, provided all payments have been maintained. If the mortgage is an interest only mortgage then only interest is paid each month and at the end of the term the balance should be the amount you borrowed provided all payments have been maintained.

Transfer of Equity – This is when a person is added or removed from the property ownership. This may be requested as a result of a change in personal circumstances. A transfer of equity is the legal process required to make this change.

Valuation – Before agreeing to provide a mortgage, the lender will instruct a valuer to look over the property to establish how much it’s worth and assess its suitability for mortgage purposes. There is usually a charge for this. A valuation is not the same as a survey. A survey will give you a more detailed evaluation of the property.

Value – This is how much your home is worth in the current housing market. This may not be the same as the amount of money you paid for your home.

Variable Rate Mortgages – If you have a variable rate mortgage, your payments will go up and down according to the rise and fall of specified interest rates. There are several kinds of variable rate mortgages and these can vary from lender to lender.

in partnership with First Class Financial Advisers

Advance Mortgages &
Protection Advisers 
Heron way
07887 668190

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Borrowers who opted for a two-year fixed rate at an average rate of 2.30% in May 2017 could see their interest rate more than double when moved onto the average SVR of 4.89%.
The average two-year fixed rate reached a record low of 2.20% in October 2017. The following month, the Bank of England increased the base rate (from 0.25% to 0.5%) and the average two-year fixed rate increased to 2.35% by December 2017.
The average two-year fixed rate currently stands at 2.47% – down from 2.49% last month – and, if the average SVR remains constant at 4.89%, the projected average difference in the revert rate will increase from 2.59% to 2.69% by October. This would give borrowers even more motivation to remortgage or switch their existing deal.
In January, Virgin Money highlighted that as many 750,000 borrowers would reach the end of their fixed terms in the first half of the year.
Moneyfacts spokesperson Darren Cook said: “Over the next six months, it is likely that many mortgage borrowers who secured a two-year mortgage deal two years ago may see their record low interest rate expiring and will have no intention to revert to a rate that could see their interest rate double overnight.
“For instance, a borrower on a repayment mortgage of £250,000 who locked into the average two-year fixed rate of 2.20 per cent in October 2017, if then transferred onto the predicted average lender’s SVR of 4.89 per cent in October 2019, will see their mortgage repayments increase by £4,336.20 per year with a rate increase of 2.69 per cent.
This significant increase in motivation for borrowers to switch mortgage deals, and the subsequent potential increase in remortgage business as a result, may push some mortgage lenders to marginally cut rates over the next few months to maintain a competitive edge.
The average two-year fixed rate has already fallen this month. However, this fall could be attributed to rate cuts at higher risk loan-to-value (LTV) tiers to attract first-time buyer business. It will therefore be interesting to see if the average rate falls further still as providers potentially target remortgage customers – and therefore lower LTV tiers – as we approach October.”
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Off to London to support my wife in the London landmarks half Marathon.

Go Jessica Go!!
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We are a Network of 20 Local businesses in Essex - Solicitor, IFA, Accountant, Electrician, Nutritionist etc - we operate with BNI and meet every Tuesday to exchange business referrals.

In the last year we have passed each other over 600 referrals worth over 1.2m pounds - money that may have gone elsewhere.

We have an open day on Tuesday 29th January to find out about what we do and are looking specifically for :

Plumbers Printer
Funeral Director Estate Agent.
Charity. Florist
Contractors Photographer
Decorators Personal Trainer.
IT Support Architect

If you are in a category above or know someone in one of the categories and are interested in finding out more please message me.

The cost is just £20 for breakfast and you will have a chance to pitch your business to everyone present and pass around business cards.

There is no obligation from either the Networking group of yourself to proceed if either side do not see a mutual benefit

What's to lose?
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