Mortgage FAQs
Mortgages can often be confusing and there can be parts which are difficult to understand. You might be just starting your home buying journey and need to know the basics, or you could be coming to the end of your mortgage term and have some questions.
Although we deal exclusively with intermediaries when it comes to our mortgages, to help give you a little bit more information and guidance, we’ve put together answers to the following Frequently Asked Questions.
Can’t find what you are looking for? Contact our mortgage team on 01582 463133 or email us on customeroperations@harpendenbs.co.uk and we will be happy to help answer any queries you have.
General Mortgage FAQs
We only lend on properties within England and Wales.
No. We deal exclusively with intermediaries; therefore, we advise new mortgage customers to obtain independent mortgage advice. This approach is designed to ensure you receive the most appropriate mortgage advice across the market and is part of our continued commitment to responsible lending. When you have found the property you want, speak with your mortgage advisor and discuss your financial situation with them.
If you do not already know an independent mortgage advisor, or you wish to check that the advisor you are dealing with is regulated by the Financial Conduct Authority, you can search the Financial Services register here: https://register.fca.org.uk/s/
LTV is the amount of mortgage you owe against the value of your property.
For example, if your property is worth £250,000 and your mortgage loan amount is £200,000, this would represent a Loan to Value of 80%.
An Agreement in principle (AIP), is a document that proves that you can afford a mortgage on a property without actually having to have your full mortgage application approved. They allow you to successfully make an offer on a property without having a mortgage deal in place, as they assure the seller that you will be able to acquire the funds to purchase the property.
Before applying for a mortgage you may need a AIP. An AIP gives an idea of how much you could borrow from us. Many sellers or estate agents ask to see a AIP. An AIP means that Harpenden Building Society is, in principle, prepared to make a loan up to the amount shown. It is not a mortgage offer and does not mean that Harpenden will make one. A mortgage offer is subject to full application, valuation and meeting our lending policy.
A Standard Variable Rate is a type of variable rate mortgage. A variable rate mortgage has an interest rate that can fluctuate. If the mortgage interest rate falls, your monthly mortgage repayment reduces but if the mortgage interest rate goes up, so does your monthly repayment. We will decide when to increase or decrease this standard rate.
You will be notified by us in writing 10 working days in advance of any change to the interest rate and advised of the new monthly repayments required to maintain the term of your mortgage. Changes in interest rate may vary in accordance with our current Mortgage Terms & Conditions.
You may make overpayments at any time or settle this type of loan without paying early repayment charges. Any overpayments received will be applied immediately to reduce the capital amount owing to us and will reduce the interest charge on your account from the day following receipt.
If you are on a fixed rate mortgage term, the SVR is the interest rate that will be charged once the initial fixed rate term ends.
For example, if you initially take out a 2-year fixed rate mortgage and at the end of the 2 years you do not move onto another mortgage, you will automatically be put onto an SVR mortgage.
We contact all of our mortgage members before their deal is coming to an end, to give you the chance to decide which option is best for you.
Our ID requirements are listed here
Repayment Mortgage
A repayment mortgage is where you make monthly repayments over an agreed number of years to cover both the capital you have borrowed and the interest charged.
At the beginning of the term, most of your payment is used to cover the interest and only a small amount is paid towards reducing the mortgage. Over the course of the repayments, more and more of the monthly payment is comprised of paying back the capital borrowed.
As the debt gradually reduces over time, the figure of capital paid increases and the interest amount paid reduces, so although the monthly repayment stays the same (assuming interest rate remains unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses.
At the end of the term, provided you have made your payments on time, you will have paid off your mortgage.
Interest only Mortgages
An interest only mortgage allows you to make monthly payments that just cover the interest on the money you have borrowed. These payments do not pay off any capital of the sum originally borrowed.
This means that you’ll need to repay the full mortgage amount in one lump sum at the end of the mortgage or when you sell the property. You will have to agree with us at the outset how this will be achieved.
We can only provide this facility where we are satisfied that you will be able repay the mortgage at or before the end of the term.
Part Capital and Part Interest Mortgages
Also known as a Part & Part Mortgages, this type of Mortgage is a combination of 2 different repayment types.
(1) Repayment (where you re-pay both the capital and interest elements of your mortgage in full).
(2) Interest only (where you only re-pay the interest element of your mortgage and the capital balance remains outstanding at the end of your mortgage term).
With a combination of the two, you repay the full interest element and a percentage of the capital balance. The remaining capital balance will be outstanding at the end of the agreed term. For this outstanding balance, as with Interest only, you will need to ensure you have a satisfactory repayment strategy in place.
For example:
As an example, a part and part mortgage of £200,000 may have £150,000 on repayment and £50,000 interest-only. You’d then repay the £150,000 over the term of your mortgage. The remaining interest of £50,000 would be paid at the end of the agreed term.
The higher the percentage set on Interest only, the higher the balance outstanding will be at the end of the mortgage term.
When you apply for a mortgage, we make various checks to see if you pass our affordability assessment and meet our other lending criteria. These include credit searches, identity checks, income and employment checks and property valuations.
When these checks are complete, our underwriters will review your application in full and decide whether to approve the mortgage. If your application is approved, you will receive a binding mortgage offer that is valid for 6 months. This gives you enough time to take up the offer and complete your mortgage.
Yes. We look at many types of income when assessing affordability
We lend to people who are employed, self-employed, retired and contractors.
We look at salary, bonus and commission as well as pension, drawings, dividends, rental income, investment income, trust income and maintenance when it comes to meeting our criteria and affordability.
When considering either a mortgage, or additional borrowing on your mortgage, it is very important that you are able to afford the mortgage payments as well as your bills.
As everyone will have very different financial commitments, your independent mortgage advisor will need to provide us with details regarding your income, expenditure and other assets, plus your mortgage requirements. We will then be in a position to make an individual assessment based on your personal circumstances.
Mortgages are available of periods ranging from 1 to 35 years dependent upon the product selected.
You will be required to arrange buildings Insurance cover in respect of the property offered as security as a condition of the mortgage offer. We will ask the valuer inspecting your property to advise us of the buildings reinstatement value. We will expect that you provide us with evidence of insurance in the buildings reinstatement value and for the interest of Harpenden Building Society to be noted in the insurance policy document before we advance any monies to you under the mortgage at completion.
Arrangement Fees apply to some of our mortgage products. If this is the case, these will be detailed to you on the European Standardised Information Sheet (ESIS) provided to you by your independent mortgage advisor.
When we provide you with a Mortgage Offer, and at any time that you ask us, we will provide you with a Tariff of Charges covering the operation and repayment of your mortgage.
You can view our Mortgage Tariff of Charges here
The Valuation Fee for the basic valuation on behalf of the Society can be found by clicking here.
Existing Mortgage Customer FAQs
If you find that you are experiencing difficulties in paying the amounts due under your Mortgage, you must contact us as soon as possible. The sooner that we know about your difficulties, the more options we can offer you. If a law or regulation requires us to send you information or guidance about dealing with financial difficulties and/or arrears, we will provide you with that once we know that you are, or might in the future be, in difficulties.
Please visit our Financial Difficulties page for more.
For further information on mortgage arrears or problems paying your mortgage, please click here.
Mortgages are repaid on a monthly basis, with 12 payments annually. The number and amount of repayments will depend on the mortgage amount and term required.
All payments under the Mortgage must be made by direct debit, or in any other way that we may agree or reasonably require.
For payments by direct debit, you are responsible for making sure that there is enough money in your bank account to cover the payments when they are due to be collected. Payments by any other method are at your risk, and you are responsible for making sure that they reach us on time.
Payments received under the Mortgage will be used in the following order:
(a) first, towards any arrears of payments due;
(b) second, towards any other interest due and payable;
(c) third, towards any outstanding Fees and Costs, insurance premiums and Early Repayment Charges;
(d) fourth, towards repaying outstanding Advances (proportionately). We may vary the order in (b) to (d) above if we so decide (acting reasonably).
During the period of a repayment mortgage we can, on written request, following advice from your independent financial advisor, amend the mortgage term to suit your changing financial circumstances. You can also switch from a repayment mortgage to an interest-only mortgage, or vice versa, during the agreed term, subject to circumstances. The consequences of such actions should be discussed with your independent financial adviser. See our Tariff of Charges for any charges involved.
Not all HBS products are subject to Early Repayment Charges, however those that are will also be subject to a maximum allowance in capital repayments per 12 month period. Any capital repayments over this allowance will be subject to an Early Repayment Charge until the end of the initial discount period. No Early Repayment Charges will be payable on redemption or for capital repayments once the initial discount period has come to an end.
Repayment Mortgage
A repayment mortgage is where you make monthly repayments over an agreed number of years to cover both the capital you have borrowed and the interest charged.
At the beginning of the term, most of your payment is used to cover the interest and only a small amount is paid towards reducing the mortgage. Over the course of the repayments, more and more of the monthly payment is comprised of paying back the capital borrowed.
As the debt gradually reduces over time, the figure of capital paid increases and the interest amount paid reduces, so although the monthly repayment stays the same (assuming interest rate remains unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses.
At the end of the term, provided you have made your payments on time, you will have paid off your mortgage.
The Society usually offers this type of loan on a Standard Variable or Discounted Rate basis.
Interest only Mortgages
An interest only mortgage allows you to make monthly payments that just cover the interest on the money you have borrowed. These payments do not pay off any capital of the sum originally borrowed.
This means that you’ll need to repay the full mortgage amount in one lump sum at the end of the mortgage or when you sell the property. You will have to agree with us at the outset how this will be achieved.
We can only provide this facility where we are satisfied that you will be able repay the mortgage at or before the end of the term.
The Society usually offers this type of loan on either a Standard Variable, Discounted Rate basis and Fixed Rate basis.
Part Capital and Part Interest Mortgages
Also known as a Part & Part Mortgages, this type of Mortgage is a combination of 2 different repayment types.
(1) Repayment (where you re-pay both the capital and interest elements of your mortgage in full).
(2) Interest only (where you only re-pay the interest element of your mortgage and the capital balance remains outstanding at the end of your mortgage term).
With a combination of the two, you repay the full interest element and a percentage of the capital balance. The remaining capital balance will be outstanding at the end of the agreed term. For this outstanding balance, as with Interest only, you will need to ensure you have a satisfactory repayment strategy in place.
For example:
As an example, a part and part mortgage of £200,000 may have £150,000 on repayment and £50,000 interest-only. You’d then repay the £150,000 over the term of your mortgage. The remaining interest of £50,000 would be paid at the end of the agreed term.
The higher the percentage set on Interest only, the higher the balance outstanding will be at the end of the mortgage term.
The Society usually offers this type of loan on either a Standard Variable or Discounted Rate basis.
Your first full monthly repayment Direct Debit payment will be collected on the 23rd of the month following completion of your mortgage.
Your first mortgage payment will be higher than your regular payments as it includes initial interest. Initial interest is made up of the interest from the start of your mortgage to the end of that month which is added to your first monthly repayment.
Please note that the due date of your first mortgage payment cannot be changed.
Following the first payment, you can choose to have your payment collected on the 5th, 23rd or the 27th of the month.
If changing your date, please ensure you still make a payment when due, while the change is being implemented. To change your payment date, please contact us to make arrangements.
We will require at least 5 working days to amend your direct debit payment date.
This can be considered, subject to criteria and your ability to make the monthly repayments required following the change.
If you are having difficulty making your mortgage repayments, please contact us as soon as possible and a member of our highly trained staff will discuss this with you.
Yes. You can repay up to an additional 10% of your outstanding mortgage balance each year, starting from the date of original mortgage completion, or the start date of your latest interest rate deal using the balance outstanding, without incurring an early repayment charge.
If you do make an overpayment, then the amount you owe and the interest you are charged will reduce from the date the overpayment is credited to your account.
Early Repayment Charges are applied if overpayments of more than 10% of the balance outstanding, or full mortgage repayment, Early Repayment Charges are applied.
You can send us your new bank details using a Direct Debit Mandate form. You can find this form here Direct Debit Mandate Form.
You can send this to us via email to: customeroperations@harpendenbs.co.uk or via post to: Harpenden Building Society, FREEPOST SB165, Mardall House, 9-11 Vaughan Road, Hertfordshire, AL5 4HU
If the interest rate on your mortgage is about to change, we will write to you at least 7 days before the change to confirm your new interest rate and monthly repayment.
We will send your annual mortgage statement to you at the beginning of each year. The statement will cover the period from 1 January to 31 December of the previous year. It will show you the balance of the mortgage, payments and interest charges and any fees accrued over the year.
You will receive a statement for each mortgage account that you have with us.
If you would like to order a statement at any other time of the year, you can request a copy by letter, telephone call or email. Your most recent mortgage statement will be sent out to you, free of charge, on annual basis; any additional copies of this or previous statements can be requested. The cost for additional statements can be found on our Tariff of Fees.
You may need a certificate of mortgage interest for tax purposes. It gives details of the interest charged to your mortgage account during the previous tax year.
Please contact us and we will arrange for a certificate of interest to be sent to you.
Please note that we cannot produce a certificate of mortgage interest for tax paid until the relevant tax year has ended.
If you want to redeem your mortgage, you will need to request a redemption statement to know exactly how much you need to pay, as interest is calculated daily on your mortgage account. The redemption statement will also include any fees or charges due. If you require a redemption statement, please contact us.
If you have a residential mortgage and you want to let your property, you’ll need to apply for a consent to let. Please contact us to discuss.
If you sell part of your land or any outbuildings on land that you own, that portion of the property that forms part of our security on the mortgage is released. This is known as a release of part security and is often handled on your behalf by a solicitor. This process may involve having the property valued again.
Get in touch if you’d like to discuss a release of part security.
You can add or remove someone from your mortgage with our approval, and subject to our mortgage lending criteria and affordability. This is known as a transfer of equity.
Please contact us to discuss if you’re thinking of adding or removing someone from your mortgage.
Yes, under certain circumstances. The mortgage term is the number of years you agreed to pay off the loan you borrowed when you first took out your mortgage with us. As your circumstances change, you may want to change the term of your mortgage, making it either longer or shorter.
Doing this will have an effect on your mortgage monthly payments, and any term adjustment agreement will be subject to our lending criteria and affordability.
Please get in touch if you'd like to discuss changes to your mortgage term.
Please complete our Change of Details Form.
You can send this to us via email to: customeroperations@harpendenbs.co.uk or via post to: Harpenden Building Society, FREEPOST SB165, Mardall House, 9-11 Vaughan Road, Hertfordshire, AL5 4HU
Terms and conditions may have to be changed from time-to-time. We will write to you regarding any changes and give you at least one months’ notice before they take effect. If there have been significant changes in any one year, we will send you a copy of the new terms and conditions, or a summary of the changes.
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