Mortgage Guide
Stroud & Swindon is the sensible mortgage choice whether you're a first time buyer, moving home, or re-mortgaging, because we offer the highest levels of service and a great deal on your mortgage.
Our advisers are fully trained to help you through the maze of information - our aim is to keep it simple for you.
We will explain our products and services and whatever your circumstances, we aim to provide the right solution for you.
Do you give advice?
When applying either online or via our call centre you will not receive advice or a recommendation from us. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.
However, if you apply through a branch in order to select the right mortgage, we can provide you with the following levels of service, in accordance with the Financial Services Authority (FSA) requirements:
- We can advise and make a recommendation for you after we have assessed your needs.
OR
- We will ask some questions to narrow down the selection of products that we will provide details on. You can then make your own decision on how to proceed. If you choose this level of service, you will not receive advice or a recommendation from us.
How much can I borrow?
This will depend on your income and expenditure and on the valuation or purchase price of the property you wish to buy or remortgage.
|
Income under £30,000 |
Income over £30,000 |
| Under 85% Loan to Value |
4x your sole/joint salary |
4.5x your sole/joint salary |
| Over 85% Loan to Value |
3.75x your sole/joint salary |
4.25x your sole/joint salary |
Please ask us about any bonuses and/or commission, which we may be able to take into account.
There may be certain circumstances where we can offer you more – just ask your Stroud & Swindon adviser.
How do I apply?
Once you have decided how to apply, it will be helpful if you could have available, or bring with you, the following documents in order to speed up the process:
- Your last 3 months pay slips and latest P60 or if you are self-employed, your last 3 years audited accounts/tax assessments.
- Your last 3 months bank statements.
- Passport or full driving licence.
- If you already have a mortgage, your most recent annual statement.
- If you are renting a property, your rent book (if you have one).
- Your insurance documents such as buildings and contents, and life cover policies.
- Proof of residence (utility bill/council tax bill).
Can you arrange life assurance and property insurance?
Yes. When we discuss your mortgage requirements we will be pleased to review the protection of your mortgage and your home insurance needs. We strongly believe that your mortgage should be fully protected.
Step by step guide
Our advisers will provide you with an Initial Disclosure Document which sets out key facts about the services we can provide. Based on the information you give, we can then supply you with a Key Facts Illustration which will indicate the costs involved in repaying your mortgage and other important details you need to be aware of.
If you wish to proceed to the next stage, you can complete an online application or you can visit a branch where your adviser will complete the mortgage application form with you.
What happens next?
We will arrange for the property to be valued. The valuation is solely for our purposes and helps us to decide how much we can lend you. In some cases we will pay the cost of this basic valuation for you (please refer to the relevant Product details). If you are buying a property, we strongly recommend that you arrange for either a Homebuyers Report or full Structural Survey to be carried out for your own purposes.
When will I get a mortgage offer?
Once we receive the valuation report and complete any other enquiries, providing everything is satisfactory, we will then be able to send you a formal Offer. This normally takes about 10 – 14 days from receipt of your application. We will also send a copy of the Offer to your solicitors and you should discuss the details with them to ensure that you are happy with everything. The Offer will confirm what your monthly repayments will be and provide other information about fees and insurance.
When will the mortgage be completed?
If you are moving home, this may depend on how quickly others in the chain can move. Your solicitor will make arrangements with you and advise us when completion is anticipated. When they do, we will transfer the mortgage monies to your solicitor and the mortgage will complete.
If you are re-mortgaging, your solicitors will agree a date with you and your current lender to repay your existing loan and we will transfer the mortgage monies to them in time for this to happen.
If you are arranging additional borrowing with us, we will agree a completion date with you.
Following completion, we will send you a Mortgage Completion Document setting out details of your first and subsequent monthly payments and information about the future administration of the mortgage.
Following completion, your solicitor will also register the charge in our favour and any documents of title will be sent to you. These are important documents so please ensure their safekeeping.
What happens after the mortgage has completed?
We will keep you up to date by sending you an annual mortgage statement each January. This will provide a record of all payments and other transactions relating to your mortgage. More detailed information about the ongoing administration of your mortgage is provided later in the booklet called ‘Your Mortgage – The Facts’ which is sent out with your Mortgage Offer.
If you want to reassess your mortgage with regards to the type of mortgage, interest rate or the terms, please contact us at any time and we will be pleased to discuss the options with you.
Solicitors' fees When you purchase or re-mortgage a property you will need a solicitor or conveyancer to handle the legal work involved in transferring the ownership of the property to you, or to transfer your mortgage from your existing lender to us.
In most cases, we will instruct the same solicitor to act for us. In addition to paying your own legal fees, you will also be liable for our legal costs. We only instruct sole practitioners where the solicitor is on our panel of solicitors and practices in the area of our branch and agency network. If you wish to use a sole practitioner, please contact us first so we can discuss any additional legal costs that may apply.
Buying your property
- Searches and land registry fees - Your solicitor will conduct official enquiries and searches to check that the person selling is the legal owner and there are no unpleasant surprises in store, which may reduce the value of the property. They will also register you as the new owner of the property with the Land Registry. The fees associated with carrying out this work are called disbursements and you will need to reimburse your solicitor for these costs.
- Stamp Duty land tax - This is a government tax on the purchase of both new and existing properties. If you buy a home costing more than £125,000 you will have to pay stamp duty. Stamp duty rates are currently as follows:
| Property Value |
Cost |
| £125,001 to £250,000 |
1% of the property value |
| £250,001 to £500,000 |
3% of the property value |
| £500,001 plus |
4% of the property value |
Your solicitor will require you to pay this upon completion and before registering your property with the Land Registry.
- Selling your property - You will need to pay your solicitor for all the legal work involved in negotiating with the purchasers of your property, dealing with their enquiries and transferring ownership to them.
Remortgaging your property
- Fasttrac® Remortgage Transfer Service - This remortgage service is available only via our nominated solicitors who will carry out the standard legal work involved in transferring your mortgage to us and will include standard Land Registry fees up to £70 (covers transfers up to £500,000).
Fasttrac® Remortgage Solicitors act only for us and you must obtain your own independent legal and financial advice, if required. You may, however, retain Fasttrac® panel solicitors to complete tasks not covered by the service.
- The Fasttrac® Remortgage Transfer Service excludes:
- All sums outstanding or payable to the existing lender on or after redemption including deeds production fees, discharge fees, early repayment charges, bank fees for money transfer, redemption statement costs etc;
- Undertaking any additional work necessary to enable the remortgage to proceed as detailed in the Fasttrac® Handbook supplied before the Mortgage Offer is accepted e.g. deed of postponement, leasehold consents and notices, title issues, re-assignment of life policies, Land Registry requisitions etc;
- Undertaking any additional work necessary to enable the remortgage to proceed as detailed in the Fasttrac® Handbook supplied before the Offer is accepted e.g. deed of postponement, leasehold consents and notices, title issues, re-assignment of life policies, Land Registry requisitions etc;
- Sorting and dispatching to you documents of title that are no longer required by the Society. This costs £10.00 plus VAT
- First registration fees
Please refer to your adviser for details of whether this service is available to you and the costs involved. In some cases we will provide this service to you free of charge.
Higher Lending Charge
This charge is based on the loan to value percentage (the amount of the loan compared to the valuation or purchase price of the property).
For example, a mortgage of £135,000 against a value of £150,000 is 90% loan to value.
What does a Higher Lending Charge cover?
If you borrow more than 75% of the property value, we buy insurance cover. If we have to take possession of your property and the net proceeds from the sale are insufficient to repay the outstanding debt (plus costs and interest), we can claim on the policy.
Please note that this insurance policy does not protect you and if this happens, both the insurance company and ourselves may take legal action against you to recover the loss.
The current rate for the Higher Lending Charge insurance cover depends on the type of mortgage and is charged on the difference between 75% of the value of your property and the loan amount requested. In some cases we pay this cost for you - please refer to your mortgage adviser for confirmation of the amount applicable to you.
Any charge must be paid in full on completion of your mortgage.
Having the property surveyed
Unless you advise us otherwise, we only obtain a basic valuation report for mortgage valuation purposes. This report allows us to assess how much we can lend and is not intended to help or inform a potential purchaser.
If you are buying a property, we strongly recommend that you obtain either a Homebuyer Report or a Structural Survey, for your own use:
- Homebuyer report - This is not a full structural report but will focus on essential information, for example, defects and problems which may affect the value and your enjoyment of the property. This is more expensive than the mortgage valuation, but if it shows that work is required, you may be able to renegotiate the price of the property. It may also highlight further investigations that are required.
- Structural survey - This is suitable for most types of residential property and will provide a comprehensive report on both construction and condition. It is recommended for properties that are particularly complex, large or over 100 years old, for example. The cost of a Structural Survey will be quoted by your surveyor on an individual basis.
We will be happy to arrange for a surveyor to contact you to discuss your needs. Costs can be kept to a minimum if the surveyor used can also undertake our valuation.
A summary of our valuation fees:
Purchase Price/
Property Valuation |
Mortgage
Valuation Fee |
Additional Fee
for Homebuyer
Report |
Total Cost for
Homebuyer Report
& Valuation |
|
Up to £50,000 |
£100 |
£160 |
£260 |
|
£50,001 to £100,000 |
£130 |
£170 |
£300 |
|
£100,001 to £150,000 |
£160 |
£180 |
£340 |
|
£150,001 to £200,000 |
£190 |
£210 |
£400 |
|
£200,001 to £250,000 |
£220 |
£220 |
£440 |
|
£250,001 to £300,000 |
£250 |
£230 |
£480 |
|
£300,001 to £350,000 |
£280 |
£240 |
£520 |
|
£350,001 to £400,000 |
£310 |
£250 |
£560 |
|
£400,001 to £450,000 |
£340 |
£260 |
£600 |
|
£450,001 to £500,000 |
£370 |
£270 |
£640 |
|
£500,001 to £600,000 |
£430 |
£310 |
£740 |
|
£600,001 to £700,000 |
£490 |
£350 |
£840 |
|
£700,001 to £800,000 |
£550 |
£390 |
£940 |
|
£800,001 to £900,000 |
£610 |
£430 |
£1,040 |
|
£900,001 to £1,000,000 |
£670 |
£470 |
£1,140 |
|
£1,000,001 to £1,200,000 |
£790 |
£550 |
£1,340 |
|
£1,200,001 to £1,400,000 |
£910 |
£630 |
£1,540 |
|
£1,400,001 to £1,600,000 |
£1,030 |
£710 |
£1,740 |
|
£1,600,001 to £1,800,000 |
£1,150 |
£790 |
£1,940 |
|
£1,800,001 to £2,000,000 |
£1,270 |
£870 |
£2,140 |
|
Over £2,000,000 |
By negotiation |
By negotiation |
By negotiation |
For remortgages with the Society, on properties with a value of £600,000 or less, we will usually pay for one mortgage valuation for you (please refer to the individual product information to see if this applies). For properties over £600,000 we will contribute £430.
Can I take a mortgage on any property? We offer mortgages on freehold or leasehold houses and leasehold flats in England and Wales. We look at each property on its merits.
The following is a guide on what to consider for the different types of property:
- Flats - We restrict the level of lending on flats therefore you may need a larger deposit. Please ask for more details. The maximum Loan To Value (LTV) on flats built within the last 12 months has been restricted to 60% LTV.
- New properties - New properties or those less than 10 years old need an acceptable guarantee from the NHBC, Zurich Municipal or the architect, indicating that the construction meets recognised standards.
- Leasehold properties - The lease must have at least 30 years to run after the end of the mortgage term. For example, if you take out a 25-year mortgage, your lease must have at least 55 years left to run from when the mortgage completes.
- Repairs - If we consider that the property needs to be repaired, we may hold some of the money we are lending you until the work has been completed this is called a retention. We may be able to lend extra money to help you with repairs.
- Auctions - You will need to have arranged a mortgage on the property and be in a position to fund the purchase before the auction takes place. Come and see us as soon as possible before the auction date and we will give you details as to how to proceed.
Repaying your mortgage All mortgages require you to pay back the sum of money that you borrow and to pay interest on the loan. There are three options available to you regarding the methods of repaying the sum you have borrowed from us – either a ‘Repayment Mortgage’, an ‘Interest Only Mortgage’ or a combination of both kinds.
- Repayment Mortgages - Repayment Mortgages require you to make a payment each month. This payment comprises interest on your loan and a repayment of part of the amount borrowed. Repaying part of your loan every month means that the total amount you owe gradually becomes smaller until, when your mortgage comes to an end, your entire loan has been repaid.
To protect your family we recommend that you arrange life assurance to make sure that your loan is repaid in full if you die before your mortgage comes to an end. We will discuss this with you. Life assurance premiums cannot be included in mortgage payments and you must pay these direct to an insurance company.
- Interest Only Mortgages - Interest Only Mortgages require you to make an interest only payment to us each month and payments into a separate savings plan to build up a lump sum to repay the amount borrowed.
Please note, your choice of savings plan (and any subsequent changes to it) should always be made in consultation with a Financial Adviser authorized by the FSA. We do not recommend or provide financial advice on any particular savings plan.
It is your responsibility to choose an authorised adviser and to make regular contributions to your savings plan. To help you, the notes with your annual mortgage statement will remind you to check that your savings plan is on track to produce enough money to repay the amount borrowed in full when your mortgage term ends.
For a reasonable administrative charge, and subject to certain criteria, you may be able to change your repayment method. If you want to change, please contact us and we will discuss with you what your new payments will be.
If you wish to change to an Interest Only Mortgage you should have in force a suitable savings plan that repays the loan at the end of the term.
Early Repayment Charge Should you need to repay your mortgage early, you may be required to pay an Early Repayment Charge. The details will be shown in the Key Facts Illustration and Offer.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.