Your home is at risk if you do not keep up repayments on a mortgage or other loans secured on it. None of the products introduced on this page are regulated by the Financial Services Authority (F.S.A.).
LENDING CRITERIA
As an alternative to raising funds on the French property, subject
to sufficient equity in your UK residence, we can raise funds in the UK in sterling.
It is important to remember that the mortgage in the UK will not qualify for
interest tax relief.
The amount of loan achievable
Charles Hamer are able to arrange mortgages of up to 95% of UK property
value at competitive interest rates.
Although the general income multiples applied by the market to calculate the
maximum mortgage achievable is 3 times single income or 2.5 times joint income,
we are able to arrange larger advances.
Whilst proof of income is usually required in the form of a payslips and a P60
for employees or 3 years accounts for the self-employed, those of you who do
not have up to date accounts, or do not wish to release such information, self-certified
mortgages are available (more details on request).
Term and method of repayment
Whilst in principle there is no maximum mortgage term, most lenders prefer
to apply a nominal maximum term of 25 years, whilst it is normally in your interests to ensure the mortgage is fully repaid upon or before normal retirement
age.
The choice of method of repayment of loan capital falls into 2 basic categories :
Capital and Interest repayment mortgage
Monthly payments include repayments of loan capital and interest with the amount
of interest normally being calculated against the reducing capital balance.
Gradually the capital outstanding reduces throughout the loan term to nil.
Interest only is paid to the lender. It is left to the borrower's discretion as to how to repay the original capital borrowed by the end of the mortgage term
Life assurance
Unlike most mortgages in France, whenever life assurance is required by
the lender, this would normally be arranged individually by the borrower and
assigned to the lender. Since the mortgage and the death sum assured are both
registered in Sterling, unless the mortgage scheme allows for payment of interest
to be deferred, the level of life cover, when required, does not have to exceed
100% of the initial mortgage value at the start of the term.
Interest Rates
Interest rates are so diverse in the UK that it is difficult to generalise.
Please contact us for an update of the schemes that are currently available.
We can then provide specifically relevant Consumer Credit Act quotations.
Charge rates of interest are generally lower for large loans and when the total
mortgage charged against the UK property is less than 60% of value. The interest
rate may be fixed for the whole loan term (applicable only to a few lending
sources), fixed for a period from 1-10 years and variable thereafter, capped
for the whole term (rarely) for periods of up to 10 years, or variable with
the interest rates subject to review at any time and whithout notice. Short term discounts, base rate trackers and cashback schemes are also available.
SETTING UP COSTS OF A UK REMORTGAGE
For a UK remortgage the following charges should be considered, although, in
certain cases with the various incentives for new borrowers presently available
several of these charges can be avoided or refunded. We recommend therefore,
if you are considering raising funds in the UK, to contact our office requesting
a more precise quotation informing you of the charges to be expected in financing
the French property purchase.
Valuation fee
This will depend on the value of your UK property, but will rarely be less
than £150. Certain lenders will not levy a valuation fee, whilst others
will refund it on the acceptance of the mortgage offer.
Solicitors fees
Fees incurred are for registration of the mortgage deed including duties
payable to the Land Registry. Fees will vary considerably in accordance with
the overall loan and property value. Total fees of between £250 - £400
should be expected, although we strongly recommend you to obtain a quote from
your solicitor.
Lenders arrangement / booking fee
These fees usually arise with fixed rate mortgages and special offer discount.
When they do occur you should expect to pay between £150 and £300.
Mortgage indemnity Premium/High loan risk fee
With very few exceptions, whenever the total mortgage on your UK property exceeds 75% of the value of the property, the lender will indemnify itself against losses which may arise from the repossession and forced sale of the property. A once only charge, the cost of this indemnity may be passed on to the borrower by either being added or deducted from the mortgage advance. The fee can however be hefty, especially when the overall mortgage is over 90% of the UK property value, often exceeding £500 and sometimes £1000.
Existing lender redemption penalty
If you presently have a fixed
rate in the UK, remortgaging for the French property may incur early redemption
penalties with your present lender.
Further advance
Most of the above fees can be avoided or reduced if you applied
for an additional loan ("further advance") from your existing lender.
The downside to this approach can be that, for the less flexible lenders, higher
or standard interest rates only may be charged, or lending limited to only 75%
of your UK house value.