Things to think about

Things to thinks about before I take out a mortgage

To assist you to narrow down the search for your new mortgage, you should first decide which payment method best suits you. Whether it is to be a repayment, interest only or perhaps a flexible mortgage. To help you decide on the method most suitable for you, it would be sensible to take into account your attitude to risk . Only a repayment mortgage can guarantee, assuming all mortgage payments are maintained properly, that your mortgage debt will be repaid at the end of the original mortgage term.

Always shop around for the best rates, but be sure you are comparing like with like. To do this check the APR of the loan. You also need to bear in mind that the interest payments in respect of fixed rate mortgages can rise steeply once the initial 'fixed' period ends. Therefore your planning should always include the possibility of sharp changes to future interest payments.

If you are intending to sell your home in the near future, check whether there are any redemption penalties attached to the mortgage or if your mortgage deal will allow you to take the mortgage on to the next property.

Check what arrangement fees the lender charges and whether these are refundable should you decide not to proceed midway through the application process.

Check for additional costs such as Early repayment charge and buildings and contents insurance.

Consider using a mortgage broker and taking independent financial advice, this can save you a lot of time checking the differences between the various lenders; it can also help clarify which mortgage package best suits your circumstances.

What other costs are involved when buying a house?

In addition to your mortgage, you should bear in mind the following one-off costs at the time or purchase (or remortgage if you are changing mortgage lenders):

Legal fees : unless you intend to carry out your own conveyancing , you will need to pay a solicitor or other suitably qualified person to complete the legal work
Land Registry fee : the Land Registry registers your ownership of the property
Searches : your solicitor (or you) will need to check to see if there are any plans for the neighbourhood which could affect the value of your property, such as the building of a new road
Survey and valuation : the lender will insist that a survey and valuation is done on the property. You should think about a more comprehensive survey to check for structural or other defects

Stamp duty : all transfers of property of £120,000 or over attract stamp duty. For property transfers between £120,001 and £250,000 stamp duty is charged at 1% of the property price, for properties between £250,001 and £500,000 then the rate is 3.0%. The rate of Stamp duty for transfers of property over £500,001 is 4%.

What is a Higher Lending Charge?

If you take out a mortgage for more than 75% of the value of your home , the lender will normally ask you to provide additional security to cover their potential loss should you default on the loan. The most common method of providing this additional security is for you to pay the lender a higher lending charge. The lender may use the money received from the insurance policy to cover the costs they suffer involved in the repossession and resale of the property.

Please note that after any claim the insurer will normally look to recover, from you, any payments they make to the lender. The amount they will try to recover would include any legal fees they have suffered during the process.

We will charge a fee of £200.00 to cover our administration of your mortgage and we will also receive a procuration fee from the lender.

The FSA do not regulate some forms of mortgage