Mortgages & Legal Securities

One of the biggest questions for buyers is how can I possibly get a mortgage and how much will I be allowed borrow? Let’s start at the beginning!

What is a mortgage?

It is a charge or a claim, over your property that you give to your lender in exchange for a loan.Historically you would actually convey your title to the lender and get it back once the loan was paid off.

Effect

While the property is mortgaged it cannot be sold, subdivided, remortgaged, transferred to a family member or anyone else without the permission of the lender. This is how the lenders protect their security

Purpose

It enables you to get the loan to buy the property, whether for a family home or any other property, in exchange for a profit which you pay as interest to the lender.

Criteria for giving a loan

The lender will look at your ability to repay the loan. Therefore they are interested in what kind of job you have, what kind of job security you have and matters like that. The backstop for them is that if the worst comes to the worst they can sell the house and have the loan repaid.

The banks will look at your current employment position, your prospects and judge whether you’re a suitable risk for them to advance the loan. They will look at your ability to repay rather than the value of the property, although this is also a valid consideration.

They will require you to provide details of your P60s, payslips, tax returns or whatever is necessary and will also check your credit history.

They also have to apply the current central bank rules which are designed to prevent future property problems, But are creating a new problems and strangling what could be an emergent market

Paying it back

You pay off the loan instalments including part of the original sum borrowed and the interest.

Mortgage protection policy.

This is a life insurance policy which pays out if borrower/s die before the mortgage is paid off. A standard mortgage protection policy will always be worth the amount that is outstanding on the loan.

This is an invaluable piece security and nobody should allow their mortgage protection policy premiums to lapse. In the event of a tragedy the survivors can be left in very poor circumstances and unable to pay the outstanding mortgage