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Where to begin with a Mortgage

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Buying your own home is probably the most important single purchase you will ever make. We have produced this Guide to help you understand the things which you should bear in mind when applying for a mortgage and also how your mortgage account will work. Please read this booklet carefully.

How much can you borrow?

This depends on two things:

• the value of the property, and
• your own income

The value of the property

The maximum amount we will lend you based on the value of the property depends on a number of factors including the mortgage product, what purpose the property is to be used for and your general personal circumstances. Please speak to a mortgage interviewer for more information.

Your own income

How much you earn will affect the amount you can borrow – if you are employed we will ask you to provide recent payslips and P60s. If you are self-employed, we will ask for at least 2 years’ business accounts or tax returns.

Your monthly income includes your basic monthly salary plus any regular commission and overtime, and any other regular income from other sources. We will take into consideration any loans, credit cards, hire purchase and other regular outgoings to assess the affordability of your proposed borrowing.

As a responsible lender we will only lend you what is considered to be affordable and this will vary depending on whether there are one or more assessable incomes and on your overall outgoings. We will always assess the affordability of the loan based on your income and your outgoings. The Society may take up references from people such as your employer, your landlord or another lender to confirm the information which you have made available when applying for your mortgage. Some people who provide these references make a charge for doing so. You will have to pay any charges. The Society will also obtain information from credit reference agencies.

Depending on your personal circumstances, there could be other things we need to see to demonstrate your income – one of our mortgage interviewer’s will be able to tell you what we need.

All loans are subject to status and satisfactory references.

Higher lending charge

If you are taking out a loan of more than 80% of the price or value of the property - whichever is lower - then a ‘Higher Lending Charge’ will be incurred. We may use part of this charge to purchase additional security for the loan. However, it is important for you to remember that even if we do purchase additional security this will not protect you if your property is repossessed and sold for less than the amount you owe.

Even if we make a claim on the additional security, you will remain liable for all sums owing including any interest and costs.

Please note that the additional security is only for our benefit. You do not have any entitlement to benefit under some or all of the additional security. In fact, if the provider of the security pays any money to us then they have the right to recover these sums of money from you. This is sometimes referred to as a right of ‘subrogation’.

If the Society incurs a loss when selling your property you could be pursued by the Society for the loss or by the provider of the additional security.

If your loan does not exceed 90% of the lower of purchase price or valuation the Higher Lending Charge does not normally have to be paid by you and will instead be paid by the Society. If this is the case, it will be stated in the Key Facts illustration (KFI) and the Mortgage Offer.

For loans between 90.01% and 95% the charge will not normally be paid by the Society and will be added to your mortgage. This charge will also be stated in any KFI and Mortgage Offer which you receive from us.