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MORTGAGE REPAYMENT METHODS | |
CAPITAL INTERESTThe capital interest repayment method means that each monthly payment you make to the lenderwill contain an element of capital in addition to the interest payable on the loan. The proportion of each will change throughout the period of the loan, the proportion of capital increasing with each monthly payment provided that the payments due are met in full and on time. INTEREST ONLYThe interest only method of repayment means that your payment to the lender will consist only ofthe interest due on the amount borrowed, plus any additional charges such as premiums in respect of buildings insurance. The loan will be repaid only when the property is sold, maturity proceeds are received from an investment scheme that has been arranged or you receive an inheritance. | |
MORTGAGE INTEREST RATES | |
VARIABLE RATEThe term variable rate means the standard interest rate charged by the lender that may be variedfrom time to time at the lender's descretion. DISCOUNTED RATEThe term discounted interest rate means the rate charged after a specific discount has been appliedto the lender's standard variable rate. The discounted rate will apply for a specified period and may increase or decrease as the lender's standard variable rate itself increases or decreases. FIXED RATEThe term fixed interest rate means that the interest rate is guaranteed to remain unchanged fora specified period. Upon expiry of the fixed interest rate period the interest rate applicable to your mortgage will usually change to the variable rate prevailing at the time or (subject to the terms applied by the lender) to a new fixed rate. CAPPED RATEThe term capped interest rate means that the interest rate payable on your loan will not rise aboveor fall below specified upper and lower limits for a specified period. Whilst this will save you money if the lender's standard rises above the cap rate, it will equally prevent you from saving money if rates fall below the collar rate. At the end of the specified period the interest ratepayable on your loan will be the lender's standard variable rate. TRACKER RATEThe term tracker rate means that the interest rate on the loan follows the changes in the Bankof England base interest rate. | |
TYPES OF VALUATION | |
VALUATION REPORTBefore a lender will offer you mortgage funds they will usually require a qualified surveyor to inspectthe property and submit a valuation report. This is to ensure that the property is suitable for the loan requested. The report does not necessarily give you an indication as to the condition of the property. If the property is new and construction is not completed you may have to pay an additional fee for second valuation when it is finished. ADDITIONAL SURVEYThe interest only method of repayment means that your payment to the lender will consist only ofthe interest due on the amount borrowed, plus any additional charges such as premiums in respect of buildings insurance. The loan will be repaid only when the property is sold, maturity proceeds are received from an investment scheme that has been arranged or you receive an inheritance. | |