Getting a mortgage or remortgage

1. Make sure you know the differences between repayment and interest only mortgages and find out from the lender what consists of each.  For example, the different types of investment concerning interest only mortgages, such as ISAs.

2. Discover the differences in repayment methods.  For example, interest only loans are of a higher risk than repayment mortgages because there is no guarantee that an investment-backed interest-only mortgage will pay off the loan fully at the end of the term.

3. Ensure you know how long the initial interest rate will last and what rate you will be paying once it has finished.

4. Make sure you know what your monthly repayments will be if the interest rate is variable.  Ask your advisor to perform the stress test to see what they would be if interest was to rise by 1, 3 and 5 percentage points.

5. Discover how often your interest rate will be checked and changed.  For example, If it is a base rate tracker, check whether the lender has any power to delay making changes to your rate or to vary the percentage by which your rate tracks the base rate.

6. Find out how much you will be paying over the term of the mortgage, including the amount you originally borrowed and any fees you have to pay and assuming current levels of interest.

7. Ensure you know what fees you must pay, when they should be paid by and whether any are refundable if your mortgage falls though.  For example, any early redemption charges (redemption penalties), and if yes, are there any restrictions on how much I can over pay each year with out being penalised?  And are there are any limits on how much I can over pay at one go?

8. You must know how flexible your mortgage is if you’re financial circumstances were to change.

9. Make sure you know if your mortgage is a CAM or Offset mortgage.  If it is, find out the total cost of the CAM/Offset mortgage based on predictions as to how much you’d pay into a personal current or savings account.  Compare these figures with the total cost for a standard mortgage to find out how much you might save.

10. If you move house, find out if you can take your current mortgage with you and if any conditions apply.

11. Before taking out mortgage protection insurance or mortgage payment protection insurance, ensure you know how much it costs.  It is often convenient to arrange cover through your lender, but you will often pay less by shopping around.

12. Find out whether you have to take out the lenders insurance in order to get the deal you wish.  If you do, then find out ho much the premiums are.

13. Before you get insurance from another company, find out if the lender charges a fee, and if so how much.

14. Ensure you know if any Mortgage Indemnity Guarantees occur.  If so what is the minimum deposit you need to put down to avoid paying it?  How much would it cost?  What are your payment options?  Is the interest calculated on a daily or annual basis?  These are all essential things that you must find out.

15. Discover what your monthly repayments would be over different lengths of the mortgage term.  For example, whether you could afford to have your mortgage over a short period of time to pay your mortgage off quicker.

16. Ask if there is a possibility of lengthening or shortening the mortgage term after the mortgage has established itself.  If so find out if there is a charge for this and how much it would cost.

17. Make sure you know what your lenders policy is regarding late or missed payments.  Find out about charges that apply if you’re in arrears as some lenders charge very high fees if you fall behind on your payments.  This will make your debt amount rise very quickly, making it more difficult to pay off.

18. Each lender has a schedule of charges covering things such as fees for duplicate statements.  So ensure you know what charges occur.

19. You must know how long it will take to process your application, especially if you want to move quickly regarding a house purchase.  Some lenders issue a mortgage certificate that certifies that the lender has agreed in principle to lend you up to a certain amount, provided that the property is suitable and all the information you have given is valid and correct.

20. Find out if your lender is a member of the mortgage code, which offers important protection.  If not then it is advised you seek your mortgage from some one who is.
Discover if your lender has passed all the relevant exams that qualify him/her as a mortgage advisor.

21. Find out how much of the mortgage market an intermediary had access to.  Under the mortgage code compliance board the advisor must state whether they arrange mortgages from a selection of preferred lenders, or from the whole mortgage market.

22. Ensure you know whether an intermediary works on behalf of the lender, often known as ‘appointed agents’, or you.  If they work on behalf of the lender, then this means that they are responsible for the intermediary’s action and advice given.