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   Mortgage Factsheet

It is wise to familiarise yourself with the following, before embarking on a mortgage.

Repayment Mortgage
In this instance you will repay the capital sum and the interest over the term of years.  This ultimately means that the loan will be repaid at the end of the mortgage term, providing that you maintain payment.

Interest Only Mortgage
With an interest only mortgage, the payments to the lender are for the interest payments only, and the outstanding mortgage remains the same.  The capital balance will only be repaid if the mortgage is converted to a repayment basis, or a suitable investment vehicle is set up, or on the sale of the property.

Failing to make suitable arrangements to repay your mortgage where it is an interest only mortgage, can result in the lender repossessing the property, or the client having to re-mortgage for another term of years, finances permitting, to repay the outstanding debt.

It is the responsibility of the client(s) to ensure that a suitable repayment vehicle is in place, should there be no other means to repay the loan at the end of the mortgage.  Your home is at risk if you do not ensure that a repayment vehicle or other means of repayment is in place !

Early repayment of a mortgage
Early repayment of a mortgage through changes in personal circumstances such as

• Marital Breakdown
• Loss of income through ill health or unexpected redundancy
• Early surrender of an investment

can have adverse financial consequences.  Depending on the particular type of mortgage or investment, the possible consequences should be taken into account when embarking on a mortgage that results in penalties being paid due to early surrender of the mortgage.

Building Insurance
In some instances it may be a requirement that Building Insurance is taken out with the lender.  If not, it is the client(s) responsibility to ensure such cover is in place before completion of the new mortgage.

High Percentage Lending Fee
If a high percentage lending fee is payable by the client, the lender may use this fee at its discretion to obtain mortgage indemnity insurance, to act as extra security for its sole benefit.

Your home may be repossessed if you do not keep up repayments on your mortgage.




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