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Redemption Penalty

An additional charge made by the lender if the mortgage is repaid within a pre-agreed period of time. These have become increasingly common with the growth in fixed rate and discounted products. They are generally imposed to stop borrowers hopping from one lender to another simply to take advantage of the latest discount or cheap fixed rate. Normally expressed as a number of months interest within a set period of years i.e. 6 months interest if redeemed within the first seven years but may also be expressed as a percentage of the mortgage debt i.e. 5% of the mortgage if redeemed within the first seven years. Careful attention should be paid to these penalties as they vary considerably from lender to lender and the lower and shorter the penalty the more attractive the deal.

Remortgages

A Remortgage is a new mortgage, which is arranged through a different lender. You use this by getting a new mortgage on your house. The difference between what you have already paid of your last mortgage and the current value is classed as equity in your property. You can have a new mortgage on your existing home either the same size and have a lower mortgage repayment or make it bigger and have funds for debt consolidation, home improvements or a holiday.

Repayment Mortgages

Also known as a Capital and Interest mortgage. With this type of mortgage the monthly repayment includes an element of the capital sum borrowed in addition to the interest charged. In the early years of the mortgage the majority of the monthly repayment consists of interest with only a small part repaying the capital. However, as the debt gradually reduces the element of capital increases and the interest element reduces, so although the monthly repayment stays the same (assuming the interest rate remain unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses. On a 25-year term mortgage it would not be unusual to still owe over 50% of the original debt after the first 15 years. Providing the correct monthly repayments are made on there due dates this mortgage will guarantee to repay the total mortgage debt at the end of the mortgage term.

Right To Buy

If you have lived in a Council Property for a number of years you have the right to buy that property. The council give you a discount to buy the property. I can get you the mortgage. For how much longer councils will let you do this is a political agenda. Act Now before it is too late!