Further Uses of Life Assurance - Obtaining a mortgage

As soon as you have chosen a house, you should contact all three types of lender to ask for the terms they offer. You can usually borrow up to a maximum of 8o % (though this varies between two thirds and 100 per cent) of the price of the house, or of the value the lender's valuer puts on it - whichever is the lower.

In addition, the maximum loan is usually limited to between two and a half and three times your yearly gross income; and the maximum monthly outgoings on rates, mortgage repayments and ground rent is usually limited to an amount equal to your weekly income. Before giving you any money, the lender surveys the house you intend buying to satisfy himself about its age, condition and value as a security for the loan. You will find it much easier to obtain a loan on a modern post-war property than an old rambling house, and if you are considering a leasehold property, you may find tremendous difficulty where the lease has less tha,n fifty years to run at the outset. Loans on flats or maisonettes are also harder to obtain. In general, the lender looks for property which is well looked after, structurally sound and priced fairly in relation to its market value.

The normal length of a loan is twenty or twenty-five years, but the term may be shortened on an older or period house, or for older people, in the latter case so that the mortgage is entirely repaid by the date of expected retirement.


Obtaining a mortgage

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

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read on: Further Uses of Life Assurance - Option mortgages

As soon as you have chosen a house, you should contact all three types of lender to ask for the terms they offer. You can usually borrow up to a maximum of 8o % (though this varies between two thirds and 100 per cent) of the price of the house, or of the value the lender's valuer puts on it - whichever is the lower.
In addition, the maximum loan is usually limited to between two and a half and three times your yearly gross income; and the maximum monthly outgoings on rates, mortgage repayments and ground rent is usually limited to an amount equal to your weekly income. Before giving you any... see: Further Uses of Life Assurance - Option mortgages