It is essential that you familiarise yourself with the following facts before embarking on a mortgage.

There are various ways to repay an interest only mortgage. To give an example we have categorised three methods.

Interest Only Mortgage:

Failing to make suitable arrangements to repay your mortgage where it is an interest only mortgage can result in the lender repossessing the property or the client having to re-mortgage for another term of years, finances permitting, to repay the outstanding debt.

It is the responsibility of the client (s) to ensure that a suitable repayment vehicle is in place should there be not other means to repay the loan at the end of the mortgage. Your home is at risk if you do not ensure that a repayment vehicle or other means of repayment is in place!

Early repayment of a mortgage

Early repayment of a mortgage either through changes in personal circumstances such as

	Marital Breakdown
	Loss of income through ill health or unexpected redundancy
	Early surrender or an investment

can have adverse financial consequences. Depending on the particular type of mortgage or investment this possible consequences should be taken into account when embarking on a mortgage that results in penalties being paid due to early surrender of the mortgage.

Where the mortgage is fixed/capped or discounted the loan will revert to the standard variable rate at the end of the fixed / capped or discounted period. This could result in a substantially higher monthly payment and you could be in an extended tie-in period which means that you would be penalised for moving your mortgage elsewhere.

Be sure that you can afford the mortgage once the standard variable rate is applied after the special rate interest period has ended.

Building Insurance

In some instances it may be a requirement that Building Insurance is taken out with the lender. If not it is the client (s) responsibility to ensure such cover is in place before completion of the new mortgage.

High Percentage Lending Fee

If a high percentage lending fee is payable by the client the lender may use this fee at its discretion to obtain mortgage indemnity insurance to act as extra security for its sole benefit and that the lender will provide written explanation that:

	Such insurance will not protect the customer if the property is subsequently taken into possession and sold for less than the amount owed.
	The customer will remain liable to pay all sums owing: including arrears, interest and their lender's legal fees
	If a claim is paid to the lender under such insurance the insurers generally have the right to recover this amount from the customer

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

For more information, call 023 8066 8778 or use our quick quote form