What is a Mortgage?

A mortgage is granted in respect of land and land interests only.  The debtor retains possession of the property, but it becomes the property of the Mortgagee until redeemed by repayment of the debt by the Mortgagor. The deed creating the mortgage usually provides for the payment of a specified rate of interest, and repayment of the loan and or before a particular date.

The mortgage usually gives the mortgagee the right to appoint a receiver in the event of default on the part of the mortgagor.

Interest only mortgages

These are where an agreed rate of interest is applied to the total value of the loan in accordance with the loan agreement. There is no reduction in the total balance outstanding to the mortgagee.  It is recommended that a repayment vehicle is in place to assist or repay the loan during or at the end of the loan term.

Repayment mortgages

These are where both the interest due on the loan and the outstanding amount due are paid.  Monthly repayments are higher; however, these can reduce depending on the agreement of the loan.  This is often called capital and interest payments.

What type of mortgage is right for you?

This could be: Interest only or a repayment mortgage.

  • Fixed rate (for 1,2, 3, 5, 10 years, or lifetime)
  • Bank Base Rate Tracker
  • Standard Variable Rate (SVR) Lender Tracker
  • LIBOR linked Tracker
  • Discounted rate (for differing periods)
  • Stepped rates
  • Flexible products
  • Capped rates

There are many more variations, but one thing is fundamental, your mortgage adviser, either working for your lender or a brokerage should ‘treat customers fairly’ and must offer you the mortgage product that most suits your needs after first gathering all relevant personal details in a ‘fact find’. Why does this need to happen? The answer is simple, because it is the law.

Mortgage advice became regulated by the FSA on 1st November 2004. So what if you believe that this did not happen to you when you took out your mortgage?

The answer is simple. You may have been mis-sold and Gladstone Brookes can help you through the mis-sold claims process.