My Mortgage Company Leaflet

YOUR MORTGAGE GUIDE

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HOW WE CAN HELP

WORKING CLOSELY WITH

To help you move home, buy and investment or re-mortgage, for your FREE initial consultation and to find out how we can help arrange you mortgage, contact us now on 01273 605 530 quoting: Paul Bott & Co. Call Paul Bott & Co. on: 01273 605 530 or Email: info@paulbottandcompany.co.uk Paul Bott & Co. | Upper St James's Street | Brighton | BN2 1JN 01273 956 564 | info@mymortgagecompany.co.uk | www.mymortgagecompany.co.uk

HOME BUYERS GUIDE Buying a home can be a stressful and confusing time.

This step-by-step guide is designed to support and inform you throughout your mortgage application through to completion.

10 STEPS - MORTGAGE APPLICATION 1.

Consultation with adviser - We will assess your requirements and find the right mortgage for you.

2. Protection - An essential not an extra, to ensure you are covered in the event of death, critical illness, or loss of income.

3. Decision in principle - Basic personal details will be submitted to the lender to see if you meet their terms. A European Standardised Information Sheet or Key Facts Illustration will be provided detailing everything you need to know.

4. Credit searches / application - The mortgage application can now be submitted and searches completed.

5. Valuation - The lender will check the value of the property. You should also consider appointing your own surveyor for a more in-depth survey of the property.

6. Offer - Once the valuation has been approved the lender will produce an offer.

7.

Legal work - The solicitor will then complete the pre-exchange of contracts including deciding on a completion date.

8. Exchange of contracts - You are now legally committed to purchase the property.

9. Payment - Deposit is paid and the solicitor will finalise all mortgage arrangements. This is preceded by the payment of land registry fees and stamp duty.

10. Completion - Funds are transferred and the purchase is completed. It’s now time to pick up the keys!

HOME BUYERS COSTS Stamp duty - Charged on UK land and property transactions. Stamp duty is calculated at different rates, with thresholds for different property types and transaction values.

Legal fees - For any purchase you will need a solicitor to complete all the legal work. The fee for this service can vary, but generally costs between £500-750 VAT+.

Survey / valuation fee - All lenders will insist that a valuation is carried out on a property. This will only confirm the property value; it will not assess any potential problems with the property or need for future repair and maintenance. Valuation fees typically cost between £150 and £1,500 depending on the value of the property and level of survey you choose.

Current stamp duty tax rates: Purchase price of property £0 - £125,000

0%

£125,001 - £250,000

2%

£250,001 - £925,000

5%

£925,001 - £1.5 million

10%

£1.5 million +

12%

*Current rates subject to change April 2016

THREE REPORTS Home condition survey - Best for new-build and conventional homes, this is the most basic survey and typically costs £250.

Homebuyer’s report - A thorough survey and valuation of the inside and outside of the property, typically costing £400+.

Building / structural survey - The most comprehensive survey, essential for older or non-standard properties. Costs £600+.

We will advise you as to which of the above we feel is the most appropriate option given your situation.

Arrangement fees - Most lenders will charge either an arrangement or a booking fee when you apply for a mortgage.

Some lenders will allow you to add the cost of the fee to the overall loan, which means you do not need to pay this upfront.

However, you will pay interest on this fee during the term of the mortgage.

01273 956 564 | info@mymortgagecompany.co.uk | www.mymortgagecompany.co.uk

DOCUMENTS GUIDE The key to getting the right deal on your mortgage is to be prepared. Be armed with as much information as possible and ensure you have the correct documentation to support your application.

FIRST STEPS Before we get started finding you the right mortgage, there are a few things you can do in preparation for our appointment.

Firstly, make sure your finances are in order. The better your credit rating and bigger your deposit, the more options you will have when looking for a mortgage deal.

Carry out a simple credit search on yourself, this will let you see what

lenders will be looking at when they consider you.

A mortgage lender will weigh up your essential spending alongside your income. They will look at the gap in between and then do their affordability calculations from that.

A lender will likely quiz you on your spending habits. This includes feeding the family, childcare, car loans, energy bills and even mobile phone and gym contracts.

You will need to provide documentary evidence of these regular outgoings.

Mortgage lenders won’t just assess your mortgage’s affordability now, they will also consider what may happen to you in the future and stress test for potential interest rate rises. In preparation for your forthcoming meeting, make sure all your paperwork is to hand, as well as any details and figures on any earnings and outgoings.

WHAT TO BRING

PROOF OF YOUR DEPOSIT

Proof of identity

Bank statement

• A valid passport or • Full driving licence

Proof of address

• A recent utility bill (last 3 months) • Local authority tax bill (last 3 months) • Bank statement (last 3 months)

Proof of income

• Payslips (past 3 months) • Bank statements (past 3 months) • Contract from employer (if short term) • P60 proof of overtime / bonus / commission

showing the full amount of the deposit being built up

Equity

confirmation of sale price and outstanding mortgage balance

Capital raised from another property

copy of the mortgage offer letter

A gift

Credit report (optional)

letter from the person making the gift confirming the amount and on what terms

Self-employed applicants

We may also discuss other methods during your consultation

• Generated through sites such as Experian / Equifax / Noddle • 2 years’ accounts drawn up by an accountant • Self assessment tax calculation form (SA302) covering 24 trading months • Most recent year-end must not be more than 18 months before the date of application

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T YPES OF MORTGAGES & USEFUL INFORMATION This fact sheet explains some of the common terminology you may come across during your mortgage application.

TYPES OF MORTGAGES Capital repayment - Pays off both the capital and interest elements of the mortgage with each monthly instalment, therefore reducing the balance over the length of the loan term.

Discount rate - Offers you reduced repayments for a given term. This interest rate is discounted from the published lender’s standard variable rate. This rate can go up and down, but the discount amount remains fixed during the agreed period.

Interest only - For a set term the borrower will pay only the interest on the principal balance, whilst the balance remains unchanged. You are responsible for ensuring sufficient funds are available to repay your mortgage at the end of the term.

Tracker mortgage - The interest rate is linked directly to the Bank of England base rate, when the Base Rate changes the rate on your tracker mortgage changes by the same amount.

Capped rate - This mortgage has a maximum interest rate for a given period, the interest rate you pay will not go higher than the agreed capped rate during the period, but may rise or fall beneath the capped rate.

Fixed rate - An interest rate agreed at the start of the mortgage that will not change during the term of the fixed rate.

HOME BUYERS COSTS APRC - The annual percentage rate of charge is designed to help consumers compare mortgage deals equally, taking into account the initial rate, fees and charges and the follow-on rate. It then calculates a percentage that tells you the annual mortgage costs if you were to stick with the same product until your mortgage is fully repaid.

Bank of England base rate - This determines how much other banks and building societies pay for the loans that they take out from the Bank of England. The rate is reviewed monthly and therefore could affect the interest rate paid on your loan.

Conveyancing - A legal process when buying or selling property.

Completed by either a solicitor or licensed conveyancer.

Equity - The difference between the value of your property and the amount of any outstanding loans secured against it.

Exchange of contracts - When both the buyer and seller have legally committed to the sale and purchase of a property.

Freehold - This means you solely own the property and the land it is situated on.

Leasehold - This means you own the property for a set period before handing back ownership to the freeholder.

Offer of loan - A formal document approving the mortgage you have

requested. This document will include the terms and conditions that will apply during the whole term of your mortgage.

Remortgage - This is the term used when moving your mortgage

without actually moving house. This may be done by switching your product with your existing lender or switching your mortgage to a competitor.

Searches - These are the enquiries made, usually by your solicitor, at the Land Registry, the Land Charges Register and Local Authorities to ensure there is nothing to cause concern about title to the land and property you intend to buy.

SVR - After your deal finishes your mortgage rate will revert to the

lender’s standard variable rate. This interest rate can be raised or lowered by the lender at any time.

Variable rate - Usually based on the Bank of England Base Rate, it can go up and down during the term of your mortgage.

01273 956 564 | info@mymortgagecompany.co.uk | www.mymortgagecompany.co.uk

OUR SERVICES We do more than help you find the right mortgage, we also provide advice and guidance on the different types of protection available.

TYPES OF INSURANCE Life assurance - An essential cover if you have dependants who would need financial support if you were to die. There are various types to choose from depending on your budget and how much, and when, you would want a lump sum to be paid to your loved ones.

Life assurance falls into two categories: Term assurance - Will pay either a lump sum or an income if you die during the term of the policy.

Whole of life - This is more expensive as it will pay out on death, whenever it occurs.

Critical illness - Most people don’t like to contemplate what would happen if they were diagnosed with a critical illness. But with survival rates increasing, critical illness cover could provide that all important financial cushion.

In the wake of a critical illness survivors can be faced with major financial difficulties, not all can return to work and many need home modifications or private therapeutic care. Paid out through a lump sum, critical illness cover can help alleviate these financial burdens and manage the day to day monthly bills.

Critical illness cover premiums tend to rise with age and will depend on both your and your family’s medical history.

Linking your critical illness cover alongside life insurance, can often reduce the costs.

Income - No-one can guarantee they will not be the victim of an accident or be diagnosed with a serious illness. But you can guarantee that the bills will keep arriving. When faced with this difficult situation the majority of people depend on state benefits, which are often below the necessary level.

Paid through monthly premiums, an income protection policy is essentially ‘piece of mind’ insurance. Often paying around half your income, the regular tax-free income helps to relieve financial hardship and maintain your standard of living.

ADDITIONAL TERMS Adjustable rate - An interest rate that changes based on changes in a published market-rate index.

Claim - A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.

Grace period - The length of time (usually 31 days)

after a premium is due and unpaid during which the policy, including all riders, remains in force. If a premium is paid during the grace period, the premium is considered to have been paid on time.

Liability - Broadly, any legally enforceable obligation.

Policy - The written contract effecting insurance.

Premium - The price of insurance protection for a

specified risk for a specified period of time.

Underwriting - The process of selecting risks for insurance and classifying them according to their degree of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.

Waiting period - The time which must pass after filing a claim before policyholder can collect insurance benefits.

GENERAL INSURANCE These products provide protection against unforeseeable circumstances that cause damage to a personal asset. General insurance comes in a variety of forms, but all lenders will insist that a buildings policy is in place as part of any mortgage offer.

Buildings insurance - Covers the bricks and mortar of your home along with any fixtures and fittings within the property.

Contents insurance - Protects the possessions within your home.

Pricing - Dependent on personal preference and location.

Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.

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LIFE INSURANCE looking after number one...

We often protect our car, home and pets before ourselves, sometimes assuming that life insurance is too expensive to consider.

Below are some facts about how the average UK household likes to spend their money every month…

TAKEAWAY £38

GYM AND SPORTS £30

TV LICENSES AND SUBSCRIPTIONS £29

HOLIDAYS £100

GAMBLING £13

EATING OUT £72

When compared with these expenses, you may be surprised to discover that the average household only spends £13.86 per month on life insurance.

CAN YOU REALLY AFFORD TO NOT CONSIDER PROTECTING YOURSELF? Source: ONS, Family Spending 2014

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WHY IS CRITICAL ILLNESS COVER SO IMPORTANT?

BREAST, PROSTATE, LUNG AND BOWEL CANCERS TOGETHER ACCOUNTED FOR OVER HALF OF ALL NEW CANCERS IN THE UK*. *2014 Nobody likes to think about cancer, but around one in four people in the UK face poor health or disability after treatment*.

Living with an illness is stressful enough for you and your family, but worrying about the implications of not having financial cover does not bear thinking about.

50% of adult cancer patients diagnosed in England and Wales are predicted to survive 10 or more years**. It is often living with the disease that really needs thinking about.

Having critical illness cover to give peace of mind and security for you and your family in the face of tragedy is now more important than ever. *2013 **2010-2011

78% OF FEMALE BREAST CANCER PATIENTS ARE NOW SURVIVING OVER 10 YEARS*.

CANCER SURVIVAL IN THE UK HAS DOUBLED IN THE LAST 40 YEARS.

*2010-2011

Sources: Cancer Research UK, Macmillan Cancer Support

01273 956 564 | info@mymortgagecompany.co.uk | www.mymortgagecompany.co.uk

HOW WE CAN HELP

We are flexible in our approach to offering mortgage & Insurance advice, we can advise on your mortgage over the phone or face to face, we provide an initial free consultation to understand your needs and requirements and provide you with an initial recommendation. Our appointment times are flexible and we can come to your home, place of work or you can come to our offices.

WE ARE SPECIALISTS IN HELPING: • First time buyers - up to 95% mortgages available • Contractors working within any industry • Buy to let investors • Re-Mortgages - Helping clients to save money • Self Employed • Clients with adverse credit history • Life Insurance • Critical Illness Cover • Family Income Benefit • Income Protection Benefit • Buildings and contents cover • Investment loans • Bridging finance

So, whether you are moving home, buying an investment, re-mortgaging or just look for some general advice regarding mortgage and insurance then contact us to discuss your situation.

ESTAS award winning Mortgage & Insurance Brokers.

01273 956 564 | info@mymortgagecompany.co.uk | www.mymortgagecompany.co.uk

Come and talk to us about your will, mortgage or insurance needs.

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My Mortgage Company 253c Ditchling Road Brighton, BN1 6JD