a helping hand with owning your home. · a helping hand with owning your home. we understand how...

OUR GUIDE TO BUYING, REMORTGAGING AND PROTECTING YOUR HOME1 1OUR GUIDE TO BUYING, REMORTGAGING AND PROTECTING YOUR HOME

Mortgages & Insurance

A HELPINGHAND WITHOWNINGYOUR HOME.WE UNDERSTAND HOW IMPORTANT IT IS TO HAVE THERIGHT INFORMATION TO HELP YOU EVERY STEP OFTHE WAY WHEN YOU MOVE HOME OR REMORTGAGE.

2 OUR GUIDE TO BUYING, REMORTGAGING AND PROTECTING YOUR HOME

CONTENTS.

INTRODUCTION 3

WHAT IS A MORTGAGE 4

PROTECTING YOUR HOME AND FAMILY 5

COSTS OF BUYING YOUR HOME 6

HOW MUCH CAN I BORROW? 8

HOW LONG WILL MY MORTGAGE LAST? (TERM OF MORTGAGE) 9

WAYS TO REPAY YOUR MORTGAGE 10

HOW IS INTEREST CHARGED AND PAID? 12

WHICH LENDER IS RIGHT FOR YOU? 14

COMMON FEATURES OF A MORTGAGE AND FACTS WHEN 15 BUYING YOUR HOME

OTHER WAYS ONTO THE PROPERTY LADDER 18

PROTECT YOUR FUTURE 18

STEP-BY-STEP-PLANNER 20

USEFUL WEBSITES 23

3OUR GUIDE TO BUYING, REMORTGAGING AND PROTECTING YOUR HOME

INTRODUCTION.

Buying a home is one of the biggest financial decisionsyou’ll make in your life and it can sometimes seem adaunting prospect. That’s why we have produced thisguide to help you understand what you need to thinkabout and the steps you need to take when buyingyour home and remortgaging. You’ll find a range ofinformation from what a mortgage is to the costsinvolved. There’s also a useful step-by-step plannerand important information on how to protect yourhome and family.

Your mortgage adviser is ready to help too. They’reavailable to provide practical advice at every stage andsave you time shopping around for a mortgage thatbest suits your needs and circumstances.

Your adviser will give advice on a comprehensiverange of first charge mortgages, but cannot giveadvice on secured loans, bridging finance orcommercial lending. If you require advice in any ofthese areas, please ask and they will be able to put youin touch with a specialist firm.


WHAT IS AMORTGAGE?

When you buy your home, you will most likely take out a loan – a mortgage– to pay for it. The mortgage is secured against your home. If you don’tkeep up your mortgage payments your mortgage provider, or lender, maybe able to sell your home to recover the money you owe.

Whenever the property is sold, as the lender has a ‘first charge’ – or inScotland a ‘standard security’ – the mortgage must be paid back first.With your home as security, the lender is usually able to offer you a lowerinterest rate than you find with other types of loan.

REMORTGAGINGIf you change your mortgage to a new lender – remortgaging – you maybenefit from a better mortgage rate. Some lenders also offer to pay thelegal costs and valuation fees associated with remortgaging. The processfor remortgaging your home can take around 4 to 12 weeks, as the newlender will want to make similar checks to when you bought your homeoriginally. Your current lender may charge you exit fees when you leaveyour current mortgage, which may include an early repayment charge.


PROTECTINGYOUR HOMEAND FAMILY.

FIRST TIME BUYERS

Buying a home is a bigcommitment, so it’s importantto arrange with your adviser forthe right insurance cover for youand your family. That way youcan help ensure your mortgagewill continue to be paid, shouldthe worst happen.

REMORTGAGING

If you’re remortgaging ormoving home, it’s a good time toreview your existing insurancearrangements to make sure youhave sufficient cover. Please go to page 18 for fulldetails on how you can protectyour home and family.


COSTS OF BUYINGYOUR HOME.

APPLICATION/ARRANGEMENT FEESMost mortgage lenders will charge you an application or arrangement fee.

SOLICITORS FEESAs well as paying a solicitor or licensed conveyancer for the work he or she does, you’ll have topay the cost of land registry charges and local search fees. If your lender has their own solicitoracting for them, you may have to pay their fees as well.

STAMP DUTYThis is a tax paid by you when you buy a property worth £125,001 or more. The amount you paywill depend on the value of the property you’re buying. Please note this information is correct atthe time of printing.

VALUATION AND SURVEY FEESYou may need to pay for a valuation or survey. The amount you pay will depend on the type ofvaluation or survey you choose. See page 17 for more information on types of survey.

MORTGAGE ADVICE FEESSome advisers may charge a fee for the advice they give you. Your adviser will explain any feesthey may charge and confirm this in writing. In some instances an adviser fee may be chargedeven if your mortgage doesn't go ahead.

We recommend you complete the table overleaf with your adviser to help you work out what youmay have to pay when you buy your home.

This table should only be used as a rough guide and in some cases the expenses may be morethan the amounts agreed between you and your adviser. For example, if you’re also sellinga home, there will be other costs such as estate agents fees. Also if you have an existingmortgage, your current lender may charge you exit fees when you leave your current mortgage,which may include an early repayment charge. Please note: This chart is for an indication of your“upfront” costs. In addition to these, you will need to take into account the regular cost of themortgage and insurance payments.

BAND

Up to £125,000

Over £125,001 – £250,000

Over £250,001 –£925,000

Over £925,001 – £1.5m

Above £1.5m

RESIDENTIALRATES

0%

2%

5%

10%

12%

RATES FOR2ND PROPERTIES

3%

5%

8%

13%

15%

This table is for guidance only. Please speak to your solicitor / conveyancer if you need advice on the rateapplicable to you.

EXTRA COSTS


Risk: If you add any fees to your loan, interest will be charged on these amounts during the term of themortgage. Some fees will not be refunded even if yourmortgage doesn’t go ahead.

Stamp duty

EXTRA COSTS

Solicitor/conveyancer fees

Land registry

Mortgage adviser fees (if applicable)

Lender’s application/arrangement fees (if applicable)

Lender’s valuation

Survey fee

Buildings and contents insurance

Removal firm

Other

TOTAL

ESTIMATE FOR YOUR PROPERTY


HOW MUCHCAN I BORROW?

HOW MUCH YOU CAN BORROW DEPENDS ON:

• Your income, outgoings and any expected changes to these.

• Your credit history.

• Whether you’re able or prepared to make changes to your lifestyle thatmay reduce your other outgoings.

• How much deposit you can afford.

You will need to find out how much you can borrow before making an offeron a property. Some lenders will work out how much they’ll lend you beforeyou find a property – this is called an approval in principle. This will help youknow the maximum offer you can make on a property and will also speed upthe mortgage process.

Lenders usually base their calculations on your guaranteed earnings suchas basic pay, but most will also consider some or all of any regular overtimeor bonuses. They’ll usually want to see proof of your income.

CONSOLIDATING DEBTS

If you have existing debts, it may be possible for you to add these to yourmortgage rather than continue with your existing repayment arrangements.This is not suitable for everyone and you’ll need to carefully consider thiswith your adviser. When you add loans to your mortgage, it is important thatyou understand the risks:

• Adding short-term loans to your mortgage means you will repay them overa longer term. This is because unsecured loans are generally paid backover a shorter term than mortgage loans. So, while the interest rate on yourmortgage may be lower than you currently pay on your loans, by addingthem to your mortgage you’re likely to pay more overall. Therefore it maynot be appropriate to consolidate small or short-term debts.

• Your existing debts might not be secured on your property. By addingthem to your mortgage they become secured on your property.

Think carefully before securing other debts against your home. Your home maybe repossessed if you do not keep up repayments on your mortgage.

If you’re having difficulty paying your loans, it’s worth speaking to your creditorsto see if you can negotiate better terms before considering adding them to yourmortgage.

FURTHER ADVANCES

If you need to borrow more money in the future it may be possible to do this byway of a further advance. Your adviser will have more information on this ifyou’re interested.


HOW LONG WILLMY MORTGAGE LAST?

Mortgages usually have a term of between 5 and 40 years. A mortgage should normallybe for the shortest term you can afford as this keeps the overall cost down. A longerthan necessary term means you’ll pay more interest to your lender.

It’s always advisable for your mortgage term to end before you retire, as your mortgagemay not be affordable using your retirement income.

(TERM OF YOUR MORTGAGE)


WAYS TO REPAYYOUR MORTGAGE.

REPAYMENT MORTGAGES

With a repayment mortgage, your monthlypayments to the lender go towards reducing theamount you owe as well as repaying the interestthey charge. This means that each month you’repaying off a small part of your mortgage.

The advantages: It’s a clear approach – you cansee your mortgage getting smaller and providedyou maintain the required payments, you alsohave the certainty that your mortgage will berepaid at the end of the term.

The disadvantages: Initially, the majority of yourpayments go towards interest on your mortgage,which means in the early years, the amount youowe won’t reduce by very much.

THERE ARE TWO STYLES OF MORTGAGE REPAYMENT –‘REPAYMENT’ AND ‘INTEREST ONLY’.

MORTGAGE TERM

Capital Paid Off Outstanding Loan

LOAN

REPAYMENT MORTGAGE

5 10 15 20 25


MORTGAGE TERM

Interest Paid Outstanding Loan

LOAN

INTEREST ONLY MORTGAGE

5 10 15 20 25

INTEREST ONLY MORTGAGES

With an interest only mortgage you only paythe interest charged on your loan, so you’renot actually reducing the loan itself. You’llneed to have some other arrangement or planin place to repay your loan at the end of theterm. For example – investments, savings plan,downsizing (where you sell your property andbuy a cheaper one using the equity to repay yourloan), making lump sum payments or changingto a repayment mortgage.

The advantages: If the savings or investmentplan you choose performs well, then you couldpay off your mortgage earlier compared toa repayment mortgage. At the full mortgageterm there may be a lump sum available afterthe mortgage has been repaid.

The disadvantages: Very few investments orsavings plans are guaranteed to repay yourmortgage in full. At the end of the mortgageterm, you’re responsible for repaying themortgage in full. If your savings or investmentplan doesn’t cover the full amount, you’ll beresponsible for paying the difference. Yourmortgage lender can demand repayment, andthey’ll charge you interest on any outstandingbalance until it’s repaid.

Lump sum payments or changing to arepayment mortgage may not be possibleif your circumstances change and you canno longer afford the increased amounts.

Downsizing is not a guaranteed method ofrepaying your loan as, even if you have enoughequity now, house prices could fall and mayleave insufficient equity to repay the loan. It isnot advisable to rely on house prices increasingas this might not happen.

Some people may hope to rely on inheritance.However, there are several risks associatedwith this: people can change their Wills and,therefore, your inheritance is not guaranteed;the amount you receive may be different to whatyou expect; you may not have inherited by thetime your mortgage term ends or you retireand there can be a delay in receiving fundsfrom an estate.

Many lenders will only accept certain plans torepay an interest only mortgage. Your adviserwill be able to guide you.

Please note: the diagram below is for illustrationpurposes only and assumes a fixed rate ofinterest over the term of the mortgage.In reality, interest rates fluctuate.

COMBINATION MORTGAGE

It may be suitable for you to pay your mortgageby a combination of repayment and interest only.


HOW IS INTERESTCHARGED AND PAID?

YEARS

Discounted rate (three years)

Lender’s standard variable rate

% RATE

0 1 2 3

YEARS

Fixed rate (two years)


% RATE

0 1 2 3

STANDARDVARIABLE RATE

This is a standard interest rate,which a lender will set andcan go up or down in line withmarket rates (such as the Bank ofEngland’s base rate).

ADVANTAGES:

• You have more flexibilityand can usually repay yourmortgage without any earlyrepayment charges.

DISADVANTAGES:

• Your monthly payments can goup and down and this can makebudgeting difficult.

• Standard variable ratemortgages are not usuallythe lowest interest rateslenders offer.

DISCOUNTED RATE

Some lenders offer mortgageswhere the initial interest rateis set at an amount below theirstandard variable rate for a setperiod of time. At the end of yourdiscounted rate period, yourlender will usually change yourinterest rate to their standardvariable rate (SVR). It’s a good ideato review your mortgage at thisstage because the lender’s SVRmay not be the best deal around.

ADVANTAGES:

• Your payments should cost youless in the early years, whenmoney may be tight. But youmust be confident you canafford the payments when thediscount ends.

DISADVANTAGES:

• Your monthly payments cango up or down which can makebudgeting difficult.

• If you want to repay the loanearly, there could be earlyrepayment charges.

FIXED RATE

With a fixed rate mortgage, yourmonthly payment won’t changefor a set period. At the end of yourfixed rate, your lender will usuallychange your interest rate to theirstandard variable rate (SVR).It’s a good idea to review yourmortgage at this stage because thelender’s SVR may not be the bestdeal around.

ADVANTAGES:

• You know the exact amountyou’ll need to pay each month,which makes budgeting easier.

• Your monthly payment willstay the same during the fixedperiod, even if other interestrates increase.

DISADVANTAGES:

• Your monthly payment willstay the same during the fixedperiod, even if other interestrates decrease.

• If you want to repay your loanearly, there could be earlyrepayment charges.


YEARS


Capped rate

Collared rate

TRACKER MORTGAGE

With a tracker mortgage, theinterest rate charged by yourlender is linked to a rate such asthe Bank of England base rate.This means your payments cango up or down.

ADVANTAGES:

• The rate you pay tracks anotherheadline rate (for example, theBank of England base rate orthe lender’s base rate). If theheadline rate changes, yourtracker rate changes by thesame amount. So normally yourinterest rate will be followingtrends in the marketplace.

DISADVANTAGES:

• Some lenders impose a collarwhich means the interest ratewon’t fall below a certain level,even if the rate it’s trackingcontinues to reduce.

• Your monthly payments cango up or down which can makebudgeting difficult.


OFFSET MORTGAGE

With an offset mortgage, yourmain current and/or savingsaccounts are linked to yourmortgage and are usually heldwith the mortgage lender. Eachmonth, the amount you owe onyour mortgage is reduced by theamount in these accounts beforeworking out the interest dueon the loan. This means that asyour current account and savingbalances go up, you will pay lessmortgage interest. As they godown, you will pay more. Linkedaccounts that are used to reducethe mortgage interest paymentsdo not attract any interest.

ADVANTAGES:

• These products allow flexibilityand can encourage you to save.

• Mortgage payments can bereduced as the level of savingsincrease, or you may be able tocontinue paying the same andpay your mortgage off early.

• You usually pay tax on yoursavings. However, if yoursavings are automatically usedto offset your mortgage, youwon’t pay income tax on thesesavings – this is particularlybeneficial if you’re a higherrate taxpayer.

DISADVANTAGES:

• These types of mortgages arenormally only suitable if youhave savings over a certainlevel.

CAPPED RATE OR CAPPEDAND COLLARED RATE

With this type of mortgage, theinterest rate is linked to yourlender’s standard variable rate butwith a guarantee that it won’t goabove a set level (called the ‘cap’)for a set period, but equally won’tgo below a set level (called the‘collar’) for an agreed period oftime. It’s possible to have a cappedrate without a collar.

ADVANTAGES:

• You know the maximumand minimum you’ll pay fora set period of time makingbudgeting easier.

• These products are useful if youwant the security of knowingthat your payments can’t riseabove the set level (the cap),but could still benefit if rates fallduring the set period.

DISADVANTAGES:

• Even if other rates fall, yourinterest rate for the set periodwill not go down below the levelof the ‘collar’.


There are lots of different interest rate options offered bylenders to suit many different purposes. Below is our guide tothe most popular ones. The initial lump sum that you put intobuying your home (not including the money you’re borrowing)is known as the ‘deposit’. The bigger your deposit, the morelikely you are to get a better interest rate.

% RATE

0 1 2 3


WHICH LENDERIS RIGHT FOR YOU?

OVERLOOKED BY THE HIGH STREET

Some lenders might not lend to you if your personal circumstances are out of the ordinary,or you have a poor credit history. But there are lenders that can help you in these situations.They take individual circumstances into account when assessing an application – ask youradviser for more information.

Your adviser is on hand to talk you through many different lenders andthe range of products they offer. However, in some circumstances yourchoice of lenders may be restricted.

Be realistic about what you can affordYou must never overestimate your earnings to help you buy a property.If you don’t have enough income to meet the repayments, you could risklosing your home and having a bad credit record. It is a criminal offenceto deliberately give false information to your mortgage adviser or lenderto obtain a mortgage.


Here are some useful terms and facts. The specific featuresof your mortgage are shown in your Key Facts Illustration(which your adviser will give to you). This is an importantdocument which you must read as it highlights anyconditions that apply to your mortgage.

COMMON FEATURESOF A MORTGAGEFACTS WHEN BUYING A HOME

ARREARS AND REPOSSESSIONIf at any time you are unable to meet yourmortage payments, you should speak toyour lender straight away. Repossessinga property is generally a last resort – yourlender will try to reach an arrangementwith you to enable you to keep yourhome. If your lender sells your propertyafter repossessing it you’ll be responsiblefor any shortfall including fees associatedwith the sale.

ANNUAL PERCENTAGE RATE (APR)As well as telling you the rate at whichthey will charge you interest, lendersmust also calculate the APR of yourmortgage. This is the total cost of theloan, including interest and fees shownas a percentage rate. The APR is intendedto help you compare different types ofmortgages from different lenders. Incalculating the APR, lenders assumeyou’ll pay the mortgage for the fullterm. All lenders will tell you what theirAPR is before you sign up with them.Generally, the lower the APR, the betterthe deal, assuming you stay on the samemortgage product throughout the term ofyour mortgage.

CASH BACKWith a cash back mortgage, your lenderpays you a lump sum when you completeyour mortgage. The cash back can be afixed amount or can be worked out as apercentage of your mortgage. You shouldbe aware that if you move to anotherlender in the early years, in other wordswithin the early repayment charge period(see overleaf) then you’ll have to repaysome or all of the cash back received.

CREDIT SCORINGWhen you apply for a mortgage (or anysort of credit) the lender will usually‘credit score’ your application. This helpsthem decide whether to accept yourapplication, the amount of money they’reprepared to lend to you and what rate ofinterest you’ll pay.

Credit scoring works by awarding pointsbased on your circumstances. Eachlender has their own scoring system.You’ll generally score more points ifyou’ve been in your job longer, own yourown home and have paid all of your loanson time in the past. Having a good credithistory will improve your chances ofgetting the best rate mortgage.

You can get your individual credit reportby contacting Experian (www.experian.co.uk) or Equifax (www.equifax.co.uk).This will help you understand your creditfile and what aspects lenders use to makea credit decision.


EARLY REPAYMENT CHARGEThis is a charge that you may haveto pay if you want to pay off yourmortgage before the end of a setperiod. Some charges may apply onlyfor as long as the set period lasts. Inother cases, they can extend beyondthis.

FREE LEGALSSome lenders offer arrangementsthat include the cost of completingthe legal work involved in arranging amortgage and buying a home. Thesearrangements vary but they all reducethe amount you’ll need to pay at theoutset.

HIGHER LENDING CHARGELenders sometimes charge a fee ifyour mortgage is a high percentageof the property’s value. This fee isused by your lender to buy insurancethat protects them if they repossessyour property and sell your home forless than the amount outstanding onyour mortgage. This insurance doesnot protect you. You would still beresponsible for any shortfall after thesale of your property.

ENERGY PERFORMANCECERTIFICATESEnergy Performance Certificates(EPCs) are required by law for allhomes bought, sold or rented. Theygive information on how to makeyour home more energy efficient andreduce carbon dioxide emissions.If you’re a landlord or homeowner andneed to provide an EPC, you’ll needto contact an accredited domesticenergy assessor. They will carry outthe assessment and produce thecertificate. You can use the energyperformance certificate registerwebsite to search for an accrediteddomestic energy assessor, searchonline or look in the phone book.

EPCs contain:• information on your home’s energy

use and carbon dioxide emissions• a recommendation report with

suggestions to reduce energy useand carbon dioxide emissions

EPCs carry ratings that compare thecurrent energy efficiency and carbondioxide emissions with potentialfigures that your home could achieveif energy saving measures were put inplace.

It’s using a grade from ‘A’ to ‘G’ where‘A’ rating is the most efficient.The price of an EPC is set by themarket and will depend on the sizeand location of your property.EPCs are valid for ten years.

For more information pleasego to http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/Energyperformancecertificates/index.htm

HOME REPORTS FORPROPERTIES FOR SALEIN SCOTLANDHouses for sale in Scotland now haveto be marketed with a Home Report.This is a pack of three documents:a Single Survey, an Energy Reportand a Property Questionnaire. TheHome Report will be made availableon request to prospective buyers ofa home. The Single Survey containsan assessment by a surveyor of thecondition of the home, a valuation andan accessibility audit for people withparticular needs. The Energy Reportcontains an assessment by a surveyorof the energy efficiency of the homeand its environmental impact. It alsorecommends ways to improve energyefficiency. The Property Questionnaireis completed by the seller of the home.It contains additional informationabout the home, such as Council Taxbanding that will be useful to buyers.For more information please goto http://www.scotland.gov.uk/Topics/Built-Environment/Housing/BuyingSelling/Home-Report

LOAN DRAWDOWNWhen your mortgage is confirmed,your lender may agree to lend youa pre-agreed amount of extra moneywithout having to go through a formalapplication process. This is known asa drawdown facility. You may also beable to borrow back the amount of anyoverpayments that you’ve previouslymade.

NEGATIVE EQUITYIf the value of your property fallsbelow the amount you owe on yourmortgage this is called ‘negativeequity’. If this happens, and youneed to sell your property, you’ll stillbe responsible for repaying the fullamount of the mortgage.


PORTABILITYSome lenders let you move yourmortgage to a new property whenyou move house.

OVERPAYMENTSMost mortgages now offer you theoption of increasing your monthlypayments. When you do this, you’llbe paying an additional amount offyour mortgage each month. Makingoverpayments can help you to repayyour mortgage before the end ofthe term.

UNDERPAYMENTS AND PAYMENTHOLIDAYSSome mortgages allow you to reducethe amount you pay each month,or to stop making monthly payments,if you’ve previously overpaid. Lendersonly normally allow you to makeunderpayments or take paymentholidays for a limited period. This canbe useful if your income falls for aperiod of time. In both cases you’ll bepaying less than the normal monthlypayment so the amount of yourmortgage will increase.

UNSECURED BORROWINGSome lenders will give you amortgage that allows you to borrowadditional amounts on an unsecuredbasis. This means it’s not securedagainst your property. An unsecuredloan generally costs more as thelender has no security that theycan use to repay some or all of theloan if you’re not able to pay it back.The Consumer Credit Act coversunsecured borrowings.

TAX AND WILLSIn some circumstances you may needto think about the tax implications ofbuying your property. Your advisercan’t give you any advice about thetax implications and if you’re unsureabout this in any way you should getadvice from a tax specialist.

When you buy a property, we stronglyrecommend that you ensure your Willis up to date. This means that yourassets, including your property, aregiven out in line with your wishes.

VALUATIONS AND SURVEYSThere are three types of valuationsand surveys – valuation reports,homebuyer’s reports and buildingsurveys:

• Basic valuation report – This isa basic report paid for by you,but completed by the valuer foryour lender. Your lender will usethis report to help them decidewhether they’ll lend you the amountof money you need to buy yourproperty.

• Homebuyer’s report – This is amore detailed report that a surveyorcompletes for you. There’s animportant difference betweena basic valuation report and ahomebuyer’s report. The valuationreport belongs to the lender andthe valuer completes the reportfor them. With a homebuyer’sreport, the surveyor works for youand they’re responsible to you ifthey fail to spot things. Whilst thiscosts more than a basic valuation,you should consider asking for ahomebuyer’s report as it will giveyou a lot more information aboutyour property. It’s particularly usefulif you’re buying an older property.Your lender will normally use thehomebuyer’s report to help themdecide whether to lend on yourproperty, so you won’t normallyneed more than one report. Yourlender can arrange this.

• Building survey previously knownas a full structural survey – This isthe most detailed type of surveythat’s completed by a surveyorworking for you. The surveyor isresponsible to you if they fail tospot things. Building surveys arenormally asked for by those whoare looking to buy:

• an older property;

• one which needs substantialrefurbishment; or

• where there have been structuralproblems in the past.

This has to be arranged by the buyer.

Additional surveys or reports maybe needed by your lender beforethey’ll make you a mortgage offer.


OTHER WAYS ONTO THE PROPERTY LADDER.

If you’re having difficulty getting ontothe property ladder, here are someoptions you might like to consider:

BUYING WITH FRIENDS OR FAMILYBuying with friends or other membersof your family is one way of gettingon the property ladder sooner. It alsomeans that you’ll be living with peopleyou know and trust. That said, it’sstill a sensible idea to get legal advicebefore choosing this option.

GOVERNMENT HOME OWNERSHIPSCHEMESThere are a range of government backedschemes set up to help buyers onto thehousing ladder. These include:

• Right to buy – This allows councilhouse tenants to buy their propertyif they’re eligible.

• Right to acquire – This allowseligible housing association tenantsto buy their property.

• Social HomeBuy – This offerseligible housing association orcouncil tenants the chance to buya share of the market value of theircurrent home.

You can get more information on all ofthese schemes from the governmentwebsite – www.direct.gov.uk (pleasesee the ‘Useful websites’ section).

GUARANTORSIf your lender doesn’t think you canafford a mortgage on your own, youcould consider asking your parents orother close family to be ‘guarantors’.A guarantor legally agrees to beresponsible for the mortgagepayments if you’re unable to makethem. This is usually a short-termoption and, if your lender agrees, youcan get a guarantor removed at a laterdate if your circumstances change.Guarantors should get their ownindependent legal advice.

PROTECT YOUR FUTURE.

Once you’ve had your mortgageapproved, the next step is to thinkabout protecting your home andfamily. The mortgage isn’t usually theonly payment we need to make eachmonth. What about covering everydaybills and expenses? Utility bills, foodshopping, travel costs, childcare… thelist could go on.

It is not a pleasant thought, but…

• How would one partner copefinancially with the death or criticalillness of the other?

• Could you cope maintainingyour current lifestyle?

• Could you continue to raiseyour family?

In the current economic climate, it’seven more important to considerprotecting yourself and your family.Protection products can help providefinancial peace of mind when it’sneeded most. They’re designed toprovide you with a cash sum or monthlybenefit (depending on the plan chosen).They are payable, for example if you dieor are diagnosed with a terminal orspecified critical illness during the policyterm and are eligible to claim.

Please note that none of our protectionproducts have any cash in value at anytime.

Depending on the products chosen,they could help you to:

• Maintain your standard of living

• Pay your monthly bills and meetyour daily living costs

• Pay off your debts

• Afford to stay in your family homerather than have to downsize.

HOW MUCH WILL IT COST ME?

Premiums are based on:

• Your age

• Other factors such as health andwhether you smoke.

Usually, the younger you are, the lessyou’ll pay.

We all want security for our future,a chance to maintain the financialstability we have worked so hard for.That’s why it’s so important to lookahead and plan for all eventualities.


WHO SHALL I COVER?It’s also important to remember that it’snot just the main wage earner that youmay need to consider when workingout the right cover. What about thework a full time houseperson does –how would you replace them if theywere to die or be diagnosed with acritical illness?

In 2015 we conducted some researchinto the amount of time spent ondomestic tasks by women and men inthe home.

The domestic value of work undertakenby women is £29,535 a year and for menits £21,601 a year.

WHAT YOU CAN DO TO GET COVEREDFrom time to time we all need to stopand think about our current financesand future needs. With the number ofprotection products available thesedays this can be daunting for some.Wouldn’t you feel better knowingyou were getting professional help tofind your way to the right protectionproduct? By reviewing your financeswith a financial adviser they couldhelp you protect yourself and yourpartner’s/family’s future. As with allprotection policies limitations willapply.

HOW CAN AN ADVISER HELP YOU?

• They’ll help to fully identify yourprotection needs and makerecommendations that are specificto your circumstances.

• They’ll answer any questions andconcerns you may have.

• They can continue to review yourrequirements on a regular basis,taking into account any changes toyour commitments or lifestyle.For more help and advice talk to yourfinancial adviser today.It really is worthwhile thinking aboutprotecting your partner/family’sfuture.

YOUR HOME INSURANCE INSAFE HANDSOnce you’ve secured your mortgage,it’s important to look at homeinsurance. Your adviser can offeryou Home Insurance at a competitiveprice, giving you the peace of mind thatyour treasured possessions can becovered.

HOME INSURANCE – PROTECTING YOURBUILDING AND CONTENTSFinding the right home insurance canbe complicated, but your adviser canhelp you choose a policy that’s tailoredto meet your individual needs, with awide range of optional extras. Plus, ifyou insure both buildings and contentsunder one policy, you mayreceive a discount on your premium(subject to minimum premium).

BUILDINGS INSURANCE: WHAT’SCOVERED?Your home is probably your biggestsingle purchase, so it’s important youhave adequate buildings insurance inplace.

Buildings insurance covers your homeand its fixtures and fittings againstloss or damage caused by events suchas fire, storm, flood and subsidence.It also covers less common causes ofdamage such as theft, vandalism ordamage to your property caused byvehicle collision.

CONTENTS INSURANCE:WHAT’S COVERED?Contents insurance covers yourhousehold goods and personalbelongings against loss or damagecaused by risks such as fire, theft,storm and flood.


STEP-BY-STEPPLANNER.BUYING A HOME

Visit an adviser to discussyour mortgage andprotection needs. Youradviser can apply for an‘approval in principle’ earlyin the process so you’vean idea of the amount youcan borrow.

Register with estate agents,check property websitesand look in local papers tofind a property you want.Make an offer via yourestate agent.

When your offer’s accepted,complete a mortgageapplication with youradviser and submit tothe lender:

• The lender will undertakecredit searches.

• The lender will instruct avaluation. It’s also a goodidea to have a surveydone so you’ll need todecide which typeyou want.

Instruct a solicitor orlicensed conveyancer whowill undertake all the legalwork required throughoutthe process of you buyingyour home. (Your lendermay be able to provideaccess to these facilities.)

The lender will issuean offer detailing anyconditions that apply.


Your solicitor will drawup contracts and arrangea date for them to beexchanged. At this pointyou’re legally committed tothe contract. If any depositis due, it will need to bepaid at this point.

At the same time the dateof exchange is agreed thedate for completion willalso be decided.

Buildings insurance willneed to be in place (on risk)from exchange. It may beappropriate for some ofyour other protection needsto be in place at exchange– if not, your adviser willarrange for them to be onrisk for completion.

Instruct a solicitor orlicensed conveyancer whowill undertake all the legalwork required throughoutthe process of you buyingyour home. (Your lendermay be able to provideaccess to these facilities.)

The lender will issuean offer detailing anyconditions that apply.

STEP-BY-STEPPLANNER.BUYING A HOME

Your solicitor will drawup contracts and arrangea date for them to beexchanged. At this pointyou’re legally committed tothe contract. If any depositis due, it will need to bepaid at this point.

At the same time the dateof exchange is agreed thedate for completion willalso be decided.

Buildings insurance willneed to be in place (on risk)from exchange. It may beappropriate for some ofyour other protection needsto be in place at exchange– if not, your adviser willarrange for them to be onrisk for completion.

You canarrange tocollect thekeys to yournew home onyour completiondate.


REMORTGAGING BUYING A HOMEIN SCOTLAND

Visit an adviser to discuss your remortgageand protection needs. Complete a mortgageapplication form with your adviser and submitto the lender:

• The lender will instruct a valuation.

• The lender will undertake credit searches.

Visit an adviser to discuss your mortgageand protection needs. Your adviser can applyfor an “approval in principle” early in theprocess so you’ve an idea of the amount youcan borrow.

Register with estate agents, check propertywebsites and look in local papers to find theproperty you want. Scottish properties areusually marketed on an “offers over” basis,where the property is put on the market belowits value to attract interest.

Hire a solicitor who is familiar with Scottishproperty laws who will undertake the legal workthroughout the process of buying your home.Once you’ve found the right property you’llneed to arrange a valuation or survey.

When the offer letter is sent, the solicitorsfrom both parties will be able to conclude“missives”. These are a series of letters thatpass between the solicitors addressing thefiner details of the purchase.

Make a formal offer via your solicitor. Onceyour offer is accepted then you’re committedto proceed to conclusion of “missives”.

A date of entry will then be arranged for thekeys to be collected. It is at this point that thefull purchase price must be paid. You shouldensure your insurance and protection policiesare ‘put on risk’ from this date.

Unless your lender offers free legal services,instruct a solicitor or licensed conveyancerwho will do all the legal work requiredthroughout the remortgaging process.

Your lender will issue an offer letter detailingany conditions that apply.

Your new lender will correspond with you onyour new loan.

Your solicitor will give you a completiondate and ensure funds are transferredappropriately so your existing mortgage isrepaid and any surplus funds passed to you.


USEFUL WEBSITES.www.moneyadviceservice.org.ukThe Money Advice Service is an independent service set up bythe government to help people manage their money.

www.cml.org.ukWebsite of the Council of Mortgage Lenders. It providesa range of general consumer information includingdownloadable guides on home buying and selling, andmortgage payment protection insurance. They also providea list of frequently asked questions about mortgages, amortgage calculator and mortgage repayment tables forconsumers who want to calculate their mortgage costs.

www.naea.co.ukThe National Association of Estate Agents. Provides help andadvice on buying and selling property as well as a propertysearch facility.

www.direct.gov.ukPublic services website provided by the Government.Gives information about tax credits, the government homeownership schemes and state benefits.

CONTACT US.

www.stonebridgegroup.co.uk

SOL1727

a helping hand with owning your home. · a helping hand with owning your home. we understand how...

Documents