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- Frequently asked questions
At Precise Mortgages we offer a diverse range of products available for you to purchase your property, refinance an existing mortgage or raise additional funds. Whilst your chosen financial adviser will be able to tell you more about the products that we offer, hosted below is further information that helps to explain a little more about our bridging loan products.
Our range of bridging loans can offer the ideal solution in scenarios where you need to ‘bridge’ a gap in your finances on a short term basis. For example, did you know that a bridging loan could be used for any of the following purposes?
- Buying a property but this is due to complete before the sale has gone through on the home that you are selling (often referred to as chain break finance)
- Completing refurbishment/renovations in your home or completing a property conversion
- Purchasing a property at an auction.
The key difference between the products that we offer is essentially the initial product fees we charge and the rate of interest that is payable on the amount you have borrowed. The interest rate that you pay is fixed for the term of the mortgage.
An interest only mortgage of £225,000 payable over 12 months on a fixed rate of 0.8% per month would require 12 monthly payments of £1,944.08.
The total amount payable would be £256,891.39 made up of the loan amount plus interest of £23,328.99, a facility fee of £4,552.40, assessment fee of £295, a funds transfer fee of £35, lender's legal fee of £540, valuation fee of £400, broker fee of £2,620, and a redemption admin fee of £120.
The overall cost for comparison is 14.2% APRC representative.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
- How your mortgage is regulated
We will lend where
- the property which is security for the loan is lived in by you (owner occupier),
- you will not live in the property and will let it (buy to let), or
- you are refurbishing a property (investment property loan).
Investment property loans and buy to let mortgages are not regulated by the FCA and will be unregulated unless they are ‘consumer buy to let’. A buy to let mortgage will not normally be classed as ‘consumer buy to let’ unless you only have one buy to let property and didn’t purchase that property to let (e.g. you inherited it or originally purchased it to live in). ‘Consumer buy to let’ mortgages are subject to the requirements of the Mortgage Credit Directive Order (the Order) which is supervised by the FCA.
If you have an investment property loan or buy to let mortgage which is not classed as ‘consumer buy to let’, we will include an Offer Condition in the Mortgage Offer explaining that as the Agreement is wholly or predominantly for the purpose of a business carried on or intended to be carried on by you, you will not have the benefit of the protection and remedies available under the Order or the Financial Services and Markets Act 2000. You agree to this by signing the Mortgage Deed.
- Early repayment charges
If you repay all or part of your loan early you may need to pay an early repayment charge. Details of any early repayment charges will be set out in the Mortgage Illustration and Mortgage Offer. The early repayment charge will be a percentage of the amount repaid and the Mortgage Lllustration and Mortgage Offer will explain the amount of that percentage, the period it is payable for and give an example of how much would be payable on the amount repaid.
- Repaying your mortgage
Our bridging loans are available for a minimum of 1 month and maximum of 12 months for regulated mortgage contracts, and 18 months for non-regulated mortgage contracts.
Interest only mortgages
Your mortgage will be interest only and your monthly payment only covers a payment of interest charged to your mortgage. At the end of the mortgage term, you will still owe the amount that you borrowed. and you need to repay this as a lump sum. You will need to have appropriate arrangements in place by the end of the mortgage term to repay the amount owed in full.
Remember, if you are concerned that you will be unable to meet your mortgage repayments now or in the near future, please ensure you call us as soon as possible on 0800 781 8558.
- What fees and charges you may be required to pay
We’ve created a booklet, called ‘Tariff of mortgage charges’ that provides details of our fees and charges that may be payable in connection with your loan. You can see this booklet here. The fees quoted as payable before your first monthly payment in that booklet relate to our first charge mortgages, You should ask your broker what fees are payable before the first monthly payment on your bridging loan, these fees will also be included in Section 8 of the Mortgage Illustration and Mortgage Offer.
It is important to remember that your adviser may charge you for advising you on your bridging loan. Please ensure that you check this with them and confirm what their charges will be.
With this type of mortgage we are unable to accept regular or lump sum overpayments.
- Your property
We will require a legal charge over the property and any additional security. This may be a first charge or a second legal charge ranking behind the current first mortgage.
We are able to lend on properties in England, Wales and Scotland, subject to certain restrictions on the types of properties that we will lend on. Please note postcode restrictions apply within Scotland. Your financial advisor will be able to provide you with further information on these restrictions.
To help us confirm whether properties are adequate security for the mortgage, we will either arrange for a physical property valuation to be carried out or will use a valuation model to assess the current value of your property rather than carrying out a full inspection of it. Your broker will tell you which method we are using.
Where we require a physical inspection the valuation must be provided from a valuer on our panel of approved independent surveyors and valuers. If you are responsible for paying the costs of the valuation you will have been told this in Section 8 the Mortgage Illustration and the cost will be included in Section 8 of the Mortgage Offer.
Please note, the valuer is not our agent for the purposes of any valuation or report and we accept no responsibility for the contents of any valuation or report.
For the purchase or remortgage of a property, we will instruct a solicitor or other conveyancer to act on our behalf, ensuring that the property will be satisfactory security for our loan and that we have a charge over it.
We will normally (except in Scotland) instruct the same conveyancer who is acting for you, providing that they are on our conveyancer panel. If you wish to instruct a conveyancer who does not feature on our conveyancer panels, we will instruct a conveyancer from these panels to act on our behalf.
It is important to remember that you will be responsible for all the legal fees and disbursements including the fees of our conveyancer, where you have instructed a different conveyancer to us.
- Foreign currency mortgages
We will not be able to lend to you unless you are resident in the UK and our assessment of your ability to repay the mortgage will only be on income you receive in £’s sterling and assets you hold in £’s Sterling.
- Building insurance
As a condition of your mortgage, you must ensure that adequate insurance to cover loss and damage to the property is maintained throughout the mortgage term. You do not need to buy this insurance through Precise Mortgages.
- Payment protection and life insurance
Your mortgage payments are not automatically protected in the event of accident, sickness or unemployment. In view of this, you may wish to consider protecting yourself and your family against the potential loss of your income. If a situation arises where you are unable to work and as such struggle to meet your mortgage repayments, this could lead to the risk of you losing your home. Whilst we appreciate that it is a sensitive topic, you may also wish to consider life insurance to help ensure mortgage repayments in the event of your death.
Your financial adviser may be able to help you arrange payment protection or life insurance but it is not a condition of your mortgage that you have these policies. Please note that we are unable to advise you on the suitability of any arrangements that you may make, whether privately or through your financial adviser.
- What happens if you don’t make your monthly payments
If you experience difficulty meeting your mortgage payments you can contact us by:
- Writing to us at PO Box 6075 Wolverhampton WV10 6TD
- Calling us on 0800 781 8558
We have a team of experienced staff available to provide you with information and support. You can also find useful information on the Money Advice Service website at moneyadviceservice.org.uk or by calling 0300 500 5000. Please click here for further information.
- If you breach the terms of your mortgage
Where you do not make your monthly payments or breach the terms of your mortgage in any way:
- There may be additional costs for you where we have to carry out further work. Information regarding our fees and charges, and our right to change them can be found in our 'Tariff of mortgage charges' and the 'General Mortgage Conditions' – please click here for England and Wales, or here for Scotland.
- Additionally, you will have to pay any costs we pay for insurance and to third parties (e.g. solicitors, asset managers, receivers) that we may instruct to recover any money owed to us or protect our interest in the property.
- We may also pay, on your behalf, any costs and charges associated with the property where you have failed to, and we reasonably consider it necessary to do so to protect our interest in the property. We will add these costs and charges to the amount you owe and which you have to repay to us.
- If you fail to make your monthly payments then this information will be passed to credit reference agencies, which may impact on your ability to take out further loans.
- As a last resort, your property may be repossessed if you do not keep up with payments.
- We may also appoint a ‘receiver’ to collect rent, manage and potentially sell property which is not your home. The receiver acts as your agent and therefore we are not legally responsible for their actions.
Precise Mortgages is a member of the Finance and Leasing Association (FLA) and follows the FLA Lending Code which applies to loans secured by a second mortgage on your home. Copies of the FLA Lending Code are available from Precise Mortgages, 2 Charter Court, Broadlands, Wolverhampton WV10 6TD or visit the Finance & Leasing Association website at http://www.fla.org.uk/.