Module: Personal Finance
Lecture 7: Property - Mortgages
Mortgages
It’s the largest loan that people take out
There are some people who can pay it off in 10 - 15 years
It’s a secured loan on your property
The bank has the title deeds to your property until you make your payment.
A deposit is required – the more you can put down, the lower the interest rate
on the loan.
Loan to value ratio
A lot of banks are offering 85% to 90% loan to value ratio
In April 2021, the loan to value ratio will be 95% due to the government’s new
incentive to get people on the property ladder.
Costs of buying a property
Stamp duty – a tax you pay when you buy a property. It depends on who you
are such as whether you are a first time buyer and what you pay also
depends on the value of the property.
There are costs for local searches – you need to take on a conveyancer
whose job is to focus on property purchases.
The legal costs – you have a legal rep who looks after your interest. They look
for any issues that might crop up and check that there are no legal issues
going forward. They manage the sale.
Valuation cost – this is done by the bank. They see whether the property is
worth the price.
You as a buyer might want to carry out a structural survey – it looks for things
like damp, asbestos, things that are not very visible to you. It’s carried out by
qualified surveyors.
Fees paid to the lender to arrange a mortgage is known as the admin fee.
Most of the time the fee is added to the cost of the loan product.
A mortgage broker has access to all the market. They can tell you who you
can borrow your money from.
There is an interest for the mortgage broker – they get money from you and
also from the lender for linking you to them.
A mortgage broker’s job is to make your life easy
A mortgage broker goes and look for someone who is willing to take the risk
for you.
Lecture 7: Property - Mortgages
Mortgages
It’s the largest loan that people take out
There are some people who can pay it off in 10 - 15 years
It’s a secured loan on your property
The bank has the title deeds to your property until you make your payment.
A deposit is required – the more you can put down, the lower the interest rate
on the loan.
Loan to value ratio
A lot of banks are offering 85% to 90% loan to value ratio
In April 2021, the loan to value ratio will be 95% due to the government’s new
incentive to get people on the property ladder.
Costs of buying a property
Stamp duty – a tax you pay when you buy a property. It depends on who you
are such as whether you are a first time buyer and what you pay also
depends on the value of the property.
There are costs for local searches – you need to take on a conveyancer
whose job is to focus on property purchases.
The legal costs – you have a legal rep who looks after your interest. They look
for any issues that might crop up and check that there are no legal issues
going forward. They manage the sale.
Valuation cost – this is done by the bank. They see whether the property is
worth the price.
You as a buyer might want to carry out a structural survey – it looks for things
like damp, asbestos, things that are not very visible to you. It’s carried out by
qualified surveyors.
Fees paid to the lender to arrange a mortgage is known as the admin fee.
Most of the time the fee is added to the cost of the loan product.
A mortgage broker has access to all the market. They can tell you who you
can borrow your money from.
There is an interest for the mortgage broker – they get money from you and
also from the lender for linking you to them.
A mortgage broker’s job is to make your life easy
A mortgage broker goes and look for someone who is willing to take the risk
for you.
