Our General Mortgage Information
If you are thinking about applying for a mortgage and are unsure of what Harpenden can provide, this page includes some further information about our mortgages and some of the areas that will be involved if you secure a mortgage with us. Remember we deal exclusively with intermediaries; therefore, we advise new mortgage customers to obtain independent mortgage advice. When you have found the property you want, speak with your mortgage advisor and discuss your financial situation with them.
Mortgages can often be overwhelming and confusing. We are here to make things as simple as possible. There are many different types of mortgage products in the market place and you need to ensure that you choose the right product and rate to suit your requirements. Borrowing from a lender to purchase a property is a major financial commitment and a milestone in life and we are here to help make the process as simple as possible for you.
For more information about each section below, please click on the relevant purple button.
Our Mortgage Products
Residential and Residential Large Loan- These products are available if you are purchasing a residential property. It is also available to those wanting to re-mortgage an existing residential property or if you are releasing equity from an unencumbered residential property.
Holiday Let and 2nd/Holiday Homes- This product is available for those purchasing an investment/2nd property. It is also available for those re-mortgaging an existing investment/2nd property or releasing equity from an unencumbered investment/2nd property.
Buy to Let Mortgage- This product is available if you are purchasing a property with the sole intention of letting it out under a rental agreement for business purposes. It is also available if you are re-mortgaging a rental property and either already own other properties that are rented out.
Consumer Buy to Let - This product is available if you are re-mortgaging a property that you or an immediate family member has previously lived in or you inherited, and you do not own other properties that are being let.
Self-Build- This product is available to those who are building a new main residence. This covers:
• Knock down + re-build
• Converting an existing barn/non-residential structure
• Undertaking a significant upgrade, extension, or refurbishment on their current residence.
• Converting a current single property into multi-unit property, or vice versa.
Types of Mortgages
Methods of Repayment
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.
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.
Also known as a Part Capital & Part Interest Mortgage, 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.
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.
Additional General Mortgage Information
- Mortgage products for Owner Occupation are regulated by the Financial Conduct Authority.
- 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.
- We accept security comprising 1st legal charge over properties in England and Wales only.
- You will be required to arrange buildings Insurance cover in respect of the property offered as security as a condition of the mortgage offer.
For more information about different areas of our mortgage procedures, please view our table below. If you can’t find what you are looking for, please visit our Mortgage FAQs here or you can contact our Mortgage Team on 01582 463133 who will be happy to help answer any queries you have.
Your home may be repossessed if you do not keep up repayments on your mortgage.
If you fail to keep up with payments on your mortgage a 'Receiver of Rent' may be appointed and your rental property, or other property used as security, may be repossessed.