Loan, Mortgage and Credit FAQs
24 great ways to save you money
If you find yourself struggling with day-to-day finances, like paying for your mortgage re-payments and insurance payments, phone bills, even your weekly food bills, here are 24 helpful, foolproof ideas to cut the cost of your spending in order to keep yourself on top of your finances. Move your mortgage. If you are thinking about shifting your mortgage, then now is the time to do it, as there are many good... [more]
6 ways to manage your money
It is very important to keep tabs on your finances, otherwise they will catch up with you, you wont have any idea where you money is going and you wont be able to make the most of your money. Step 1 - Understanding your in-takes and outgoings. Firstly you need to budget your finances, which is very simple. All you need to do is work out what your monthly income after tax and National Insurance is and take away your monthly spending. It might help to think of your essentials first, such as your mortgage... [more]
Annual interest rates
A repayment mortgage is simple and easy to understand. Each time you make a monthly payment, you reduce the total debt you owe. Be aware that lenders who calculate interest on an annual term do not give you justice for this. You are basically paying interest on money that you no longer owe as it is not until the end of each year that your interest payments are adjusted and your debt is recalculated. A daily or monthly interest calculation is far more flexible and much fairer too. You only pay interest on money... [more]
Annual percentage rates
It is a legal requirement that the Annual Percentage Rate is shown clearly and prominently when a mortgage is advertised. An APR is the standard way of stating the total cost of the loan, which is used to help you compare mortgages. The annual percentage rate includes features such as the interest rate, charges such as admin, booking and valuation fees, also when and how often the interest and charges must be paid. Basically, all you need to know is that one APR can be directly compared with another. The lower the... [more]
Checking costs
There are over 8,000 different mortgages to choose from so it can be extremely difficult to find the right one for you. You will want to check that the mortgage has the right features for your circumstances, and that you are getting a fair deal. Mortgages are affected by two main variables, the interest rate and fees and charges. This section explains each and shows you how to make a good judgement of each... [more]
Choosing the best deal
It is vital that you get independent mortgage advise before making any rash decisions because your circumstances and how you feel about any risks will affect which type of mortgage is the best deal for you. But before doing ant of this, it is helpful to read and consider the following points: - 1. Whether you prefer to budget for fixed payments each month, rather than payments, which can vary over the years... [more]
Compare deals
Take this as an example. Mortgage 1 is fixed at 6.99% for 6 years. Mortgage 2 is fixed at 8.19% for 6 years, but which one is the cheapest I hear you say! On first impressions mortgage 1 looks cheapest at 6.99% interest, but be aware, you could be wrong! Have you taken into consideration how the lender calculates their interest, is it annual or daily/monthly? Are there any fees such as arrangement or MIGs? Do you know the interest rate you will have to pay once the fixed term has ended? If not, then how do... [more]
Conditional insurance
These days, mortgage lenders do not insist that you take out their insurance in order to get the deal you wish, they may not tie you into its insurance deal, but they may charge you a fee of usually £25.00 if you decide to get your insurance from another company. However, do not let this charge stop you from researching into other insurance offers available. You may be surprised by what you find, you may be able to save more money that what the fee costs, and some insurance companies even offer... [more]
County court judgments
To the astonishment of lots, there are many thousands of people who are unaware that they have county court judgements against their name. Modern computerised accounting systems used by commercial organisations is the main reason for this. For example, if an unfortunate individual does not receive an invoice or paying in book in time to settle up before the computer starts its monthly run, then the computer can automatically serve the summons. This causes serious danger because even if the money... [more]
Disadvantages of APR
The APR is based on an assumption that you will have the same mortgage for the whole of the term, approximately 25 years. However, figures show that people are changing mortgages every 5 – 6 years, and if you plan to change your mortgage after a short period of time, then the APR is likely to give you a false picture. Take this as an example. Mortgage 1 has a low fixed rate for 4 years, but reverts to the lenders standard rate that is one of a range of higher rates on the market. Mortgage 2 has a... [more]
Fees and charges
When looking for a mortgage you need to take into account any fees and charges the lender is likely to charge you, before making any rash decisions. The types of fees you may come across are as follows: Arrangement fees. These are otherwise known as administration, arrangement, booking and application fees. Some are payable when you apply, on completion and some require the fee part on application and part on completion. Some lenders refund these fees if your mortgage falls through, while others... [more]
How can I manage my debt?
If you find yourself in serious debt, then follow these simple money saving tips to budget your money and hopefully save a few pounds. Collect coupons to save money on food and toiletries in supermarkets and shops. Drive at or below the speed limit. Travelling at 55 MPH instead of 65 MPH will dramatically reduces your fuel consumption-saving you money on your daily run. Walk, use a bike or public transport as often as possible, money will be saved concerning your fuel intake and taxi costs which can... [more]
I think a CCJ is wrong, what can I do?
If you believe a County Court Judgement has been recorded incorrectly, you should contact the County Court, quoting the case number included in your report. If the judgement was recorded wrongly, then the County Court will automatically change their records. As will Credit Reference Agencies if they hear from The Registry Trust commenting on changes that need to be made. As long as the court issues a ‘Certificate of Satisfaction’ and judgements are paid within a period of one month, then records can be removed... [more]
Interest rate options
The interest rate affects the amount you pay back monthly, for example, the lower the interest rate, the lower your monthly repayments. Now a days, the mortgage market is extremely competitive. There are hundreds of lenders all competing for your business, and thousands of different deals to choose from, whether it’s a fixed and capped rate, or a discount and base rate tracker. It is important to choose the best deal for you, as it will affect the amount of interest you will have to pay. The key thing to bare in mind is that deals... [more]
Interest rates
The cost of a mortgage consists of two main factors, the interest and other charges the lender wishes to make. The interest rate makes a significant impact on the state of your mortgage as it determines how much interest you will actually be paying. There are two interest rates that apply to a mortgage-the interest rate during the deal period, and the interest rate you pay after the term of the deal period... [more]
Other underwriting critertia
As you know some lenders use the credit score system, where as other companies choose not to and use other criteria to do their checks. Here are examples: Number of County Court Judgements. They may decline an application if there are any CCJ’s, have no limits and therefore disregard any judgments or put a limit on them. For example, they will accept up to 2 and will disregard any under £150 and any... [more]
Repayment options
In order to repay your mortgage, you have a choice of two repayment options, a repayment mortgage or an interest only mortgage (which is usually backed by an investment, such as a stocks and shares ISA.) With an interest only mortgage your payment to your lender simply goes straight towards repaying the interest charged. You don’t repay any of the money you originally borrowed over the mortgage term. You will often have to make other arrangements concerning payments of your capitol. This usually involves... [more]
Stop house repossession
If you decide not to turn up for your court appearance then the repossession of your house will more than likely be ordered! This is then suspended for 30 days to allow you time to make alternative mortgage arrangements. After 30 days, if the situation has not changed, a full possession order is granted and a recorded delivery letter giving notice of your possession date will be sent to the secured address... [more]
Stop repossession register
Taking out a mortgage has become increasingly popular; the majority of people today will take out a mortgage at some time in their life. It is a simple method of transaction, to buy a property you will need to borrow money from a company, then that money will be paid back to the lender, usually over a period of 25 years. However, if you don’t keep up with payments your home could be at risk of repossession... [more]
The differences in Scotland
Applying for a mortgage in Scotland is almost exactly the same as applying for one in the rest of the UK, apart from one main difference. Before making an offer on a property in Scotland, you have to be sure that the lender is willing to advance you enough money to pay the purchase price. This is because when an offer on a property is accepted and all the terms of the offer on a property are agreed to, a legally binding contract is created, tying both the buyer and the seller to the sale. If the transaction, usually conducted... [more]
Total cost calculation
Total cost provides a suitable way of comparing mortgages to see which is cheaper. It also makes it easier to compare the different deals concerning the APR’s. The mortgage search gives you the option of ordering mortgages in terms of total cost based on how long you think you will have your mortgage for. The total cost calculation looks at the total amount of monthly payments over your chosen period and takes into account the following number of points: - 1. The monthly repayments over the period of time you... [more]
What are variable rates?
Variable rate mortgages do exactly as they say on the tin. The interest rate will vary, in other words they simply rise and fall. However, this does mean that you can’t be sure what your monthly repayments are going to be. If rates fall for example, you will benefit in terms of a lower monthly payment, but if they rise, your monthly repayments too will rise. The fluctuations in these variable rates and interest rates are linked to the Bank of England base rate, the BBR, in which they make these decisions on a monthly basis... [more]
What doesn't the APR include?
1. The APR does not include the cost of insurance that a lender may insist you take out in order to get the deal you want. The only exception to this rule is that it does include the cost of any compulsory mortgage payment protection insurance. 2. The APR does not tell you anything about early redemption charges, (ERC), which you will be charged if you repay your mortgage before the term is up. Before you make any decisions based on this feature, think about whether it would be worth paying a little more for your... [more]
What doesn't the cost figure include?
1. The total cost calculation doesn’t include any insurance that the lender insists you take out in order to get the deal you wish. 2. The total cost calculation doesn’t tell you anything about any early redemption charges (ERC) that you will be charged if you pay your mortgage off before the end set date. However, you may decide that it is worth paying more for your mortgage if it means a cheaper ERC. 3. The total cost calculation has to make an assumption as to what the variable rate will be at the end of a special deal or... [more]
What is fixed rate?
A fixed rate simply means that you pay the same interest rate, regardless of market interest rates and fluctuations, over the time of your mortgage. Most fixed rates last for between 2 and 5 years, although it is possible to fix your rate for up to 10 or even 25 years. Once your fixed rate expires, you will usually revert to your lenders standard rate, although a few deals now a days revert back to a base rate tracker... [more]
Where to go for advice
If you have a problem with an existing loan or mortgage you should inform the lending company of the problem. In most instances they will help, the matter may be easily resolved. If you are considering a loan and do not understand or are unsure of the meaning of any contract term ask the lending company to explain it. The name and address of the lender will be on the loan documentation ask for the explanation to be given in writing. If your problem is unresolved, or you are still unsure of the meaning of any loan... [more]