your guide to hello g home You’ve got your own home but now your circumstances have changed. Maybe you movin want to move to a bigger place, a new location, or to downsize. But you’re probably thinking to yourself – how do I go about it? Can I be bothered with all the hassle? How much money do I need to move? Which mortgage do I choose? What are all the fees? When you took out your first mortgage, there were lots of different factors to consider. Deciding whether to move home requires just as much careful thought and planning too. Which is why we have put together this handy step-by-step guide to help you consider all the different factors involved in moving home. “helpful advice for moving home” for more information or to apply by phone 0800 234 6762 www.co-operativebank.co.uk/mortgages we are here 8am to 8pm Mon to Fri and 9am to 2pm Sat. ref: 64350 contents step 1 - do your sums 3 step 2 - brighten your home for viewers 4 step 3 - advertise your home 5 step 4 - finding a new home 6 step 5 - making an offer 9 step 6 - appoint a solicitor 10 step 7 - which mortgage? 11 step 8 - get a mortgage in principle 12 step 9 - get a valuation 13 step 10 - mortgage offer 14 step 11 - exchanging and completion 15 step 12 - it’s time to move in 16 glossary 17 2 step 1 - do your sums! The first step is to dig out the terms and conditions of your current mortgage. What type of deal do you currently have? Can you transfer your existing mortgage deal to your new home i.e. is it ‘portable’? If you are looking to move to a bigger property – can you afford to increase your monthly mortgage repayments? Are there any penalties for changing or moving your mortgage? A bigger property will also mean bigger energy, water and council tax bills. Will you be able to afford these? You may find it useful to do some budgeting sums to give you a better idea of the feasibility of moving and if you can actually afford to move. Once you’ve done your initial budgeting and have your heart set on moving home – what do you do next? 2+2=4 3 step 2 - top ten tips brighten your 1. It’s time to finish 6. The kitchen home for viewers off those jobs… Have you been threatening to mend that cupboard or fix that towel rail? Well it’s time to get to work. You don’t want prospective buyers becoming Pay particular attention to the kitchen and bathroom. Make sure all the surfaces are cleared of any clutter. Make sure all your appliances are clean - your prospective buyers will be trying to imagine what it would be like to cook in your distracted by these small problems. kitchen. Some kitchen units can benefit from a The next step is to generate interest in your current home by preparing it for the sale. quick paint job and new handles to make them look like brand new. Obviously you’ll want to sell your home for the best price as quickly as possible. 2. Could your home do To do this, you need to prepare your home for the sale. Try to imagine what a with a lick of paint? 7. Bathroom prospective buyer would think of your home, your garden, your garage? Remember When was your home last decorated? Are there any marks on the walls? Many homes could benefit Make sure you go to work on the bathroom. the first glimpse that any prospective buyer will have is usually from the roadside Keep it aired and clean and make sure any mould from a lick of paint here and there to make the in front of your property. rooms look brighter and generally more attractive. is removed. Maybe it could benefit from a lick of You’ll find that plain colours will help to give the paint or a bit of fresh grouting? Why not take a bit of time to do some jobs on and around your property? Add a illusion of a larger room. lick of paint here and there, fix the guttering, and prune those hedges… little details 8. View from the street like these will help make your home look more tidy and desirable. 3. Clean from top to bottom Remember, the first time a potential buyer will view your property is usually from the roadside. There’s no At some point you’ll be asked to provide details about your property. This will A clean, uncluttered home will be attractive to potential buyers. Make sure you clean throughout point in doing all the work on the inside of your home include the findings of standard searches, evidence of your title and any warranties/ if the outside turns off buyers. So fix that fence, paint the property from top to bottom. guarantees. You should start compiling this now to save time and money later on. that front door, and clean those windows… 4. Keep it neat and tidy 9. Get green fingers For some households it’ll be time to get rid of all the junk you’ve built up over the years. Try and Is your garden overgrown? Or full of weeds? keep all rooms as clean as possible, that way Then get out there! A cared for, colourful garden viewers will be able to see the potential of the can make your property a much more attractive rooms more clearly. proposition. Get the lawnmower out and plant some flowers to give your garden a quick makeover. 5. Lighting 10. Keep your pets away Don’t leave your viewers in the dark. Change that faulty light bulb and make sure all dark areas are You love your pets, but that doesn’t mean well lit. That way your property will seem much everyone else will. When you start showing people larger. Think about the way your furniture is laid out, your home, arrange to keep the pets out of the sometimes you can create the illusion of a much way, maybe at the home of a friend or relative. larger room by simply moving your furniture around. That way buyers won’t be distracted by them, and your pets won’t bring smells, hairs and dirty paw prints into your freshly spring cleaned home. 4 step 3 - finding and dealing advertise your home with estate agents Once you’ve prepared your home for sale, the next step is to arrange for it to be advertised for sale. You have a few options How do you find an agent? Drive around the area in which you are hoping to buy, and get your name on estate here and you’ll have to decide which option is the best for you. agents’ mailing lists for new properties coming onto the market. Once you have an idea of the kind of property you’d like, you will need to contact and visit a number of • You could use an estate agent to • An estate agent will also help you to estate agents. Bear in mind that the agent is working for the seller and not you. promote your home. Usually they’ll establish how much your home is However, estate agents are legally bound to comply with the Trades Description Act, help you by promoting your home on worth. If you don’t agree with their which means that all property details must be clear, accurate, and not misleading. their Internet site and in their local valuation price, speak to more than Some useful contact numbers: branch. They’ll arrange to show one estate agent and see if they all The Ombudsman for Estate Agents Scheme: 01722 333306 would-be buyers around your home value it at a similar price. However, and be the central contact point for you should remember a property The National Association of Estate Agents (NAEA): 01926 496800 all negotiations over the property. that’s valued too high could put buyers The OFT offer a free booklet called ‘Using an Estate Agent’, which is available Before you arrange to go ahead with off and affect your chances of a upon request from the OFT website www.oft.gov.uk or by calling 0870 6060321. an Estate Agent, make sure you quick sale. On the other hand, a The guidance covers England, Wales and Northern Ireland. know what it’ll cost you from the property that’s valued too low could outset. Although some Estate Agents potentially lose you some of the You can also search online for estate agents at The National Association of Estate will be cheaper than others, it's worth equity you’ve built up in your home. Agents www.naea.org.uk or The Office of the Ombudsman Estate Agents at either establishing what they’ll charge www.oea.co.uk or www.rightmove.co.uk before you give the go ahead. Estate The Co-operative Bank are not responsible for the content and opinions of the Agents usually ask for a percentage external websites listed here. of the sale price – usually around 1.5% for all their services, although • You could also choose to sell your property on your own by arranging to this fee is often negotiable. advertise your home yourself. Indeed many Internet sites have been set-up for this purpose. But beware; one of the first places that most buyers will go for information is a local estate agent, so you may find you struggle to reach enough potential buyers for your property. There are other options available, so make sure you know which is most suitable for you. Once you start getting interest in your home your estate agent will arrange appointments with you for potential buyers to view your home. Make sure it’s kept tidy, that way your home will be more appealing. 5 step 4 - finding a new home As you begin to generate interest in Here are some of the Bills Crime your home, and once you have a more detailed picture of the price you can immediate things to consider, What is the cost of Council Tax? What is the crime level like in the area? afford, you’ll be in a better position to but you'll probably have lots What are the average costs for start looking for your new home (You can find out at more of your own: bills? (Copies of the bills may www.upmystreet.com) This can be great fun. It can also be be available) Location Urban, suburban very frustrating! Has the property ever been or rural? Gas: £ burgled or vandalised? As our homes are one of the largest Size How big does the Water: £ financial commitments we ever make, it's Neighbours property/garden need to be? important to get it right and not settle for Electricity: £ What are the neighbours like? a property just because you can't find Local Amenities How close are anything else. Whatever your priorities, Are they noisy? the public transport networks/local Location try and get them clear in your mind schools/shopping centres/bars? Has there ever been a dispute before you start looking for a property. What are the local amenities like? with the neighbours (or anyone Commuting How far away is your Shops, hospitals, leisure facilities, etc. living nearby)? job? And how convenient is local How good, or near, is the transport? Noise public transport? Neighbourhood Are you looking Are there any schools or Are the local schools good? for a bustling neighbourhood businesses nearby that would or a peaceful one? Are there any known plans for cause noise at different times development in the area? of the day (even in the early Surrounding Area hours of the morning)? Are there, or could there be, Is the surrounding area run down? developments nearby? Is the property on a route What condition are the to/from a pub or club? Council Tax Band Check which neighbouring properties in? band your property will be in. 6 inside the property Heating Living room / dining room Does the property have full central Is there a fireplace/open chimney? heating? If so, how old is it? Is it in use or sealed? How is the water heated? Can you re-open it if you Combination boiler or tank? wanted to? Have there been any problems Are any carpets or curtains / blinds with the boiler? When was it last included in the sale? serviced by a Corgi engineer? Is there a telephone point? Has the loft been insulated? Is there a connection for a TV If so, how long ago? aerial socket? Does the property have cavity Are you able to have hard flooring wall insulation? if you want? (Be mindful of your new neighbours if you’re looking Finding a property at a flat) Are there any signs of water damage to the floor? Bedroom(s) Is there any obvious mould? Are any of the wardrobes included If so, where? in the sale? Is there an extractor fan? Are there any other fixtures or other fittings included in the sale? How old is the bathroom? e.g. curtains, light shades? Is the floor tiled or carpeted? Does the plumbing run underneath the floor? 7 outside the property the value of a Parking Is there off-road parking? Garden What garden features are included second viewing If not, are you able to park outside in the sale? (Shed for example) the property? Once you’ve decided this is the property If you’re looking to move to a bigger Does the garden get sun? (The for you, it’s always worth visiting the property, you’ll have to think about the Do you need a permit to park? best is a south-facing garden) property for a second time, this time costs of Stamp duty. The current rates Is there a shared driveway? Are there any trees nearby that paying more attention to the specific for stamp duty begin on properties Is there access to or from it? could harm the property’s details. You may find it handy to take a worth over £125,000. foundations? camera and tape measure with you, to For all property prices over £125,000 Security take pictures for reference, check key Which boundary perimeter you’ll have to pay the following measurements and finalise where Is there a burglar alarm fitted? amounts in stamp duty to the Inland is your responsibility? furniture would go and that it will all fit. Revenue; Does the property have good Is it a shared garden with If possible, it’s a good idea to vary the door and window locks? From £125,001 to £250,000 you’ll have other occupiers? If so, have time of your second viewing to give you to pay 1% of the value of your property you access rights? a chance to see if there is any Roof difference in noise levels from traffic, From £250,001 to £500,000 you’ll have Have there been any recent neighbours or local businesses since to pay 3% of the value of your property Are there any slates missing? disputes with neighbours you first viewed. An evening visit is What state is the chimney in? From £500,001 plus you’ll have to pay over boundaries? always worthwhile. 4% of the value of your property Does the roof sag? If you’ve got fencing, is it (This is a sign of subsidence) sound and solid or does When was it last tiled? it need replacing? What is access like to the garden? Guttering Can you secure the access? Is there any guttering missing? Are the fixtures secure? Windows Does the guttering have any mould Is the property double-glazed? growing on it? (This can be a substantial cost) Walls What state are the window frames in? Are they rotten or mouldy? Are there any cracks in the walls? Can you see the damp above soil level? 8 step 5 - making an offer When you've found the property you really want, it's time to make an offer. Every Can I insist that the estate What is gazundering? seller has an asking price, but that doesn't mean that you can't put in an offer that shaves a bit off the price. You may even wish to put in quite a low offer if you agent or seller take the Gazundering happens when the buyer tries to pressure the seller into believe it is a buyers' market and there's room for negotiation. property off the market? accepting a lower offer just before Before you make an offer, you need to judge how much you can comfortably afford, You can't actually stop the property contracts are about to be exchanged so you may wish want to consider the following: agent or the vendor advertising the by threatening to pull out unless the property once your offer has been seller accepts the lower price. - How far can you let the seller tempt your offer upward? accepted. It's not general practice, but - Is this the kind of property at this price selling fast or slow? some agents may take the property off What kind of survey do I need? the market out of goodwill. But When it comes to having a survey - Is it a fair price - is the seller being greedy or even realistic? remember, the agent is working to get done, you’re bound to feel a little - Are you being realistic with your offer? the best price for the seller, and is resentful about spending the money – employed by them, not you! after all, your survey fee may ultimately To get a price you're happy with, you may need to exercise some negotiation skills. However, negotiations can quickly become over-complicated, so set your minimum provide you with nothing more than a What is gazumping? reason to go no further. However, this and maximum and stick to them! In some cases, a seller can decide would be far preferable to moving into What is the estate agent's role? to go back on an agreement with the a property and discovering that you buyer by accepting a higher offer from have to spend thousands rectifying its The estate agent should provide you with all the relevant information on making an someone else. In home buying terms, hidden defects later down the line. The offer including: you have been ‘gazumped’. more you know about any defects, the - Complete legal description of the property more commanding your position will be This is perfectly legal in England, - Down payment and financing details Wales, and Northern Ireland, even after when making an offer. your offer has been accepted. This is - Proposed move-in date because the estate agent has a duty to - Price you are offering pass on any other offers they receive onto the seller, until they are told not to. - Length of time the offer is valid for By contrast, an offer in Scotland is considered legally binding from the moment of acceptance. See the Buying in Scotland section for the key differences to the processes. 9 step 6 - appoint a solicitor The best place to start looking for a good solicitor specialising in conveyancing is Phase two: exchange of contracts Phase three: completion to ask family and friends for recommendations – a name you feel you can trust from • The Solicitor liaises with the seller’s • The Solicitor sends balance the outset. Get quotes from several solicitors and, make sure quotes are ‘like for solicitor to agree completion date purchase monies (cost of property) like’ for easy comparison. to seller’s solicitor and receives • The Solicitor exchanges contracts transfer and any relevant pre- If friends and family can’t recommend someone, you can ask your mortgage lender, and forwards contract and deposit to registration deeds the Law Society or the Council for Licensed Conveyancers. seller’s solicitor • The Solicitor prepares and submits The Law Society • The Solicitor prepares transfer and Stamp Duty Land Tax Return 113 Chancery Lane, London, WC2A 1PL mortgage deed and arranges for you Tel: 020 7242 1222 www.lawsoc.org.uk to sign them • The Solicitor submits application to the Land Registry to register your • The Solicitor submits Land Registry The Council for Licensed Conveyancers, title search (to ensure nothing has 16 Glebe Road, Chelmsford, Essex, CM1 1QG changed on the title) and Land • The Solicitor receives completed Tel: 01245 349599 www.conveyancer.org.uk/directory.asp Charges search (to ensure neither you application from Land Registry and nor the seller is subject to Bankruptcy sends title confirmation to lender and Essentially, your solicitor’s job is to do the following: proceedings) any pre-registration deeds to you. Phase one: pre-contract • The Solicitor prepares final accounts Make sure you keep in touch with • Agrees with you the basis of the work to be carried out and the costs – this is and requests any monies required your solicitor throughout the process called a Rule 15 letter from you. and get him or her to check contracts • Satisfies all requirements under Money Laundering Regulations and mortgage offer documentation • May ask you for money on your account in order to carry out searches and explain any legal jargon to you, so you are happy you understand • Receives contract documents from seller’s solicitor and raises enquiries what’s happening. In short, keep • Submits local authority, water authority search and (if applicable) coal mining the communication going. search and environmental report. 10 step 7 - which mortgage? Now you know where you want to live and how much you could afford, you need Tracker rate Capped rate Cap & collar to look at the different types of mortgages that are available. The best place to start mortgages With a capped mortgage is probably with your current mortgage provider/lender to see what deals they can A tracker mortgage gives mortgage, you have all With a cap and collar offer you as an existing customer. However, be sure you look at the products you a rate of interest the benefits of a variable mortgage both a top and available elsewhere before you decide to apply for any mortgage. It’s always either above or below rate product at a rate bottom limit is set for the wise to shop around and do your research to find the best mortgage for you. the Bank of England that won’t go above the interest rate. As you’re Don't forget to consider the fees of moving your mortgage, it may be a good idea Base Rate for a set level you initially agree protected against interest to jot these down and do a basic cost analysis before deciding if you should move period, or for the life to. If interest rates fall, rate rises above a certain your mortgage or stay where you are. of the mortgage. Any so will the rate you pay point this is a relatively changes to the base rate on your mortgage. safe option. The only Fees to consider: will be reflected in your However, the rate you slight drawback is that Repayment administration fee of current mortgage provider £______________ pay will be higher than monthly repayments, so you’ll lose some of the Early repayment charges on current mortgage £______________ if it goes up so will your an equivalent discounted potential gains should New mortgage application fee £______________ repayments and if it rate mortgage. interest rates drop. Valuation fee £______________ goes down then you’ll benefit from the rate Cashback Total £______________ Cashback mortgages going down too. provide a lump sum of There are many different types of mortgages on the market. Now you are thinking cash immediately upon about moving home a different type of mortgage may be more appropriate to your completion of the new circumstances. mortgage. This amount Here is a summary of the main types that are available. is a calculation of a percentage of the overall main mortgage types – which one should I choose… mortgage. It can also be a set amount, usually in Fixed rate Discounted variable rate the region of 1-4%. With a fixed rate mortgage you pay an Just like it says, you pay a discounted Typically these agreed rate of interest for a set period rate below the Bank’s Standard Variable mortgages tend to be of time e.g. three years. Knowing the Rate (SVR) for an agreed period of time. at the lender’s Standard exact amount of money you will pay This keeps your initial costs down but Variable Rate. each month makes it easier to budget your repayments will still go up or down and gives you the reassurance that your in line with changes to interest rates monthly payments will stay the same and the SVR. whatever happens to the interest rates. 10 step 8 - get a mortgage in principle Now that you know what types of mortgage deals are available and have a clearer idea as to which one/s are for you, the next step is to do some research of the products that different lenders are currently offering. Obviously the more you investigate, the more informed you will be but below are some of the issues to consider whilst you are shopping around… The first thing to consider is obviously the rate you would be charged with your new mortgage product. If you find a product you are particularly interested in, get a quote either online or by calling the provider. All providers will be able to issue you with a ‘Key Facts Illustration’ document, which will highlight all the costs associated with the product. If you have any other queries about any element of any particular mortgage; make sure you check it out. In the first instance speak to the provider concerned or secondly for a whole market view you could speak to an independent broker – please note many brokers don’t charge a fee but make sure you are clear before you start using their services. Once you’ve decided on the lender and rate you want, apply to them to get a mortgage in principle. Once you’ve received this you’ll be in position to make an offer to buy your new home. 11 step 9 - Basic Valuation Report Carried out for the lender this survey will also help you to find out independently get a valuation whether the price is reasonable and whether you’re looking at a good investment. Although it is often referred to as a survey it doesn’t go into nearly as much detail as a Homebuyers’ or Full Survey would do. Defect Report Once you’ve found your dream home and you’ve had an offer accepted on your This report will focus on a defect that you’re concerned about – a common concern home, speak to your Mortgage Lender so you can proceed with a valuation. for would-be buyers is evidence of damp or unsafe electrics, for instance. The report Remember, you can either opt for a cheaper basic survey or choose from a range of should explain the cause of the defect and describe the steps required to put it right. more expensive surveys. Buying a property is the biggest purchase that most of us This is often required if the survey you’ve had identifies a potential problem. will ever make, so for that extra piece of mind you may find the extra expense of a more detailed structural survey will be well worth it in the long run. Ultimately, it is your decision which type of survey you choose, but a Homebuyers’ Report will give you full details of any issues that require further investigation. It is What kind of survey do I go for? better to know all the potential issues before you commit to buying a property, especially if you’re buying an older property. There are four kinds of survey you can opt for: • A Full Building Survey Who’s qualified to do my survey? • RICS Homebuyers’ Report Look for the letters MRICS (Member of the Royal Institute of Chartered Surveyors) or FRICS (Fellow of The Royal Institute of Chartered Surveyors) after a person’s • A Basic Valuation Report (often just required by the mortgage lender) name to be sure you are getting a properly qualified surveyor. To find a surveyor go • A Specific Defect Report to the Royal Institute of Charted Surveyors website, www.rics.org Your mortgage provider should be able to recommend a surveyor and if they’re lending you the Each one serves a different purpose and costs will vary accordingly. money, you can be sure that they’re not going to hide anything from you. Full Building Survey How much can I expect to pay? A Full Building Survey (often called a Structural Survey) will give you a The price of your survey will depend on the size and value of the property, comprehensive and detailed report on the current condition of the property. All the its location and condition. As a rough guide, a Basic Valuation of a three bedroom visible elements of the property are inspected and any necessary repairs are semi-detached house valued at £150,000 would cost circa £325 + VAT. identified and given a cost estimate. The lender makes a valuation too RICS Homebuyers’ Report It’s normal practice for the lender to also arrange a valuation on the property. You The RICS Homebuyers’ Report is a pre-printed form prepared by the Royal may instruct a valuer who was not on the lender’s panel, but if you do you will have Institution of Chartered Surveyors. The level of detail of the inspection is slightly to pay another valuation fee in the event that the lender subsequently instructs their less in this report, but it is slightly cheaper. You might opt for this route if you’re own valuer (which is likely to be the case). looking at a newer property. Whilst this is being done, you should contact your solicitor who will be able to complete all the relevant legal work. 13 step 10 - mortgage offer Once you’ve had a successful valuation and you are happy with the findings of the searches, you will receive your mortgage offer. 14 step 11 - • Buildings insurance helps protect you and the lender against damage to the property in the event of anything happening to it. Storm or flood damage and the repairs involved could cost you thousands of pounds without the appropriate exchanging insurance. It is also a requirement of most mortgages that you should have adequate buildings insurance cover. • Life assurance helps protect your dependants from having to meet the and completion responsibility of your mortgage if you die. • Protection products give you some protection in the event that you become unable to meet your mortgage repayments if you become ill and/or unable to work. How long – from start to finish? Exchanging When researchers tracked the experience of homebuyers in 2000 Before you exchange contracts, check with your solicitor that: (www.money.guardian.co.uk, August 2001), it was found that the average time from • you have a valid mortgage offer the start of the house hunt to the date of completion took 22 weeks. • you are happy with the survey That works out at an average of 10 weeks from having an offer accepted to collecting the keys. Official figures describing a typical timetable for a property sale • there are no unresolved issues in the contract. in England and Wales look like this: When your offer has been accepted and all the conveyancing (the legal searches) From first look at properties to offer accepted: 12 weeks has been done, your solicitor will send you the contract. This is called Exchanging From offer acceptance to mortgage offer: 4 weeks Contracts. At this point you also agree to a Completion Date – the date the property becomes yours and pay your deposit through your solicitor. (Remember, if you pull From mortgage offer to exchange of contracts: 4 weeks out after exchanging contracts, you will lose your deposit.) From exchange of contracts to completion: 2 weeks You should also make sure that the building’s insurance and any other insurance It’s worth noting that these are averages and there’s a strong chance that the are in place for the exchange date (and not the later completion date). Ask your process could take longer, or less time if you’re lucky. If you’ve experienced an solicitor for advice on this. This can be arranged by your lender or independently. adverse valuation or if your solicitor’s searches have revealed adverse issues or if Cover must be in place and is not optional. you’ve been gazumped once (or twice!) this may have an impact on how long the process takes. Around 28% of accepted offers don’t even reach completion and The day of completion many sales can drag on for months, so don’t be too downhearted if you’re not It’s customary for the buyer to get the keys to the new property around lunchtime walking across that threshold on week 22! on the day of completion so that the previous owners have enough time to move out and clean before they leave. That same morning, your solicitor will transfer the Remember: From the exchange of contracts it is your responsibly to insure the property. rest of the money from your mortgage advisor to the vendor. Your solicitor will also Make sure that you don’t overlap the final payment on your existing mortgage with the pay your stamp duty (if applicable), if you haven’t paid it already, or send you a bill first payment of your new mortgage otherwise you’ll be making two payments in the for the amount. same month. Do I need to consider any other financial products? Any property is a major asset, and is legally yours only by way of having promised to pay back a substantial loan over a number of years. You’ll need to consider buying various other financial products to protect all the concerned parties. 15 step 12 - who to contact when you move Solicitor Car Estate Agent (buying) Property it's time to move in Estate Agent (selling) Bank Building Society HP Companies Family & Friends Employer Other Financial Companies i.e. Inland Revenue ISA Provider Council Tax Office Things to remember PEP Provider Gas • Label your boxes or bin liners with what’s inside and which room you want to put Pension Electricity them in Unit Trusts Water • The night before you move, pack a survival kit – tea / coffee, crisps, biscuits, toilet Credit Card Companies Telephone Provider (BT 0800 800 123) roll, soap, towel etc. – to help you through the first day in your new home Store Loyalty Cards Internet Service Provider • Shortly before you move, fill up your car’s fuel tank – it’s one less thing to worry Insurance Companies Mobile Phone Company about on the day of the move Royal Mail (Re-direct mail) 08457 740 740 Optician Cable / Satellite Company School • If you’re not going to use e-mail to inform family, friends and associates of your TV Licence 08705 246 246 Driving Licence Centre 0870 240 0009 change of address, get some postcards and stamps TV and Video Rental Magazine Subscriptions • Try to avoid booking yourself up with weekends away just before or after the Doctor Sports and Social Clubs move. Packing and unpacking always takes longer than you think! Dentist Trade Unions / Professional Bodies • Maintain a file of all correspondence relevant to your property purchase further information sources • If you’re leaving a property, you’ll need to remember to arrange final readings for professional and trade organisations gas, electricity, telephone and council tax. See our useful contacts list • Pack valuable items and important paperwork separately and take them with you organisation telephone website in the car and then keep them somewhere safe. Association of British Insurers 020 7600 3333 www.abi.org.uk Citizens Advice Bureau www.citizensadvice.org.uk Northern Ireland www.citizensadvice.co.uk Scotland www.cas.org.uk Council for Mortgage Lenders 020 7437 0075 www.cml.org.uk Law Society of England and Wales 020 7242 1222 www.lawsociety.org.uk Law Society of Northern Ireland 028 90 231 614 www.lawsoc-ni.org Law Society of Scotland 0131 226 7411 www.lawscot.org.uk National Association of Estate Agents 01926 496800 www.naea.org.uk for more information or to apply by phone National Guild of Removers and Storers 01494 792279 www.ngrs.co.uk Office of the Ombudsman of Estate Agents 01722 333306 www.oea.co.uk 0800 234 6762 www.co-operativebank.co.uk/mortgages Royal Institute of Charted Surveyors 0870 333 1600 www.rics.org The Co-operative Bank p.l.c. is not responsible for the content and opinions of external websites given here. we are here 8am to 8pm Mon to Fri and 9am to 2pm Sat. ref: 64350 16 glossary Chain Whilst selling your home, you’ll be buying a property from a vendor who’s buying Listed below are a few terms that you may come across on your home-buying from someone else - and everyone has to wait for everyone else’s deals to go journey. through. First time buyers are chain-free, as they don’t have to sell anything. Annual Percentage Rate (APR) Completion A standard way of expressing interest rates which allows you to compare the cost The term used when the seller and buyer finally exchange money via their respective of different mortgages - including those from different lenders - on a 'like-for-like' solicitors. The buyer becomes the legal owner of the property, and can move in. basis. It takes into account costs such as fees for valuations, legal services and Conveyancing administration. The APR calculation is set by legislation and assumes the mortgage will run its full term. The process performed by a solicitor, or qualified conveyancer who deals with the details of home ownership transfer. Arrears Daily Interest The amount a borrower is behind in their mortgage payments. The interest on your mortgage is calculated on a daily basis, which means that as Base Rate Tracker soon as you make a capital payment your interest is reduced. A rate of interest set above or below the Bank of England base rate is paid for a Early Repayment Charges period of time. If you want to sell your home or change to another lender, you’ll end up paying Buildings Insurance back your loan early. Many mortgage lenders charge a penalty fee, particularly Protects the property against the financial effects of hazards such as fire, flood and during any period of fixed, capped or discounted rate. Check it out in advance, subsidence. It is a condition of taking a mortgage with The Co-operative Bank that so you know what you’re letting yourself in for. you have adequate buildings insurance. Contact our sister company Co-operative Equity Insurance, where you can have all your insurance needs covered. The difference between the value of a property and the value of a mortgage. Capped Rate Mortgage Negative equity is when the mortgage value is greater than the property value. As with all variable rate mortgages the rate follows the lender’s Standard variable Exchanging Contracts rate (SVR) up and down. The difference with this type of mortgage is that the rate is guaranteed not to go above the level at which it is ‘capped’. The contract is the written agreement that sets out the terms between the buyer and the seller. When both parties exchange contracts – usually several weeks Cashback Mortgages before completion – the deal becomes legally binding. As an incentive, some lenders offer a lump sum with the mortgage. E.g. borrowing Fixed Rate Mortgage £70,000 with 6% cash back on completion, gives you £4,200. Early repayment charges are usually attached to this type of product and you may be locked in for The amount repaid to the lender each month is fixed, regardless of the interest up to 7 years. rates in the market place. It is common for lenders to offer rates fixed for a period of time. At the end of the fixed term or benefit period, the rate will normally convert CAM – Current Account Mortgage to the SVR – Standard Variable Rate. One loan account that brings all your finances, including your mortgage, loans and credit cards in a single account. 17 Flexible Joint & Sole Income Multipliers There are five main features to a Co-operative Bank mortgage: These are used to calculate how much you can borrow based on your annual earnings. E.g. for a joint mortgage up to 3.5 x joint income (or 4.5 primary income 1. Interest is calculated daily and 1 x secondary) and for a sole mortgage 4.5 x sole income 2. Building an overpayment fund Loan to Value 3. Underpayment and withdrawals The ratio of the mortgage amount to the value of the property. For example, if a 4. Payment holidays loan of £100,000 on a property valued at £200,000, the LTV is 50%. 5. Further advances Life Assurance – see Term Assurance Guarantor Mortgages Lump Sum Repayment Any of The Co-operative Bank’s mortgages can be ‘guaranteed’ by a close family The one-off payment of an amount of money into your overpayment pot, on top of relative who promise to be answerable to the debt of the mortgage holder. a normal monthly payment. Guarantors will be subject to same lending assessment as the mortgage holder. Mortgage Calculator Ground Rent An online tool that can be used to offer you a quick quote and to demonstrate the An annual fee paid for by the leasehold owner of a property to the freehold owner. flexible features of our mortgages. Holidays (from payments) Overpayment Fund Even if you haven’t built up an overpayment fund, you could still stop paying your This is created when you increase your mortgage payments or pay a lump sum. mortgage altogether for up to 6 months on condition that you have been making You can withdraw from the fund or pay off your mortgage earlier. payments for at least 6 months. Interest does accumulate so you will have to make Payment Protection Insurance higher payments in the future to cover the payment holiday, if you want your end of term date to remain the same. Insurance that will give you cover for your monthly mortgage repayments should you be unable to pay due to unemployment or sickness. Homebuyers’ Report Portability A survey carried out by a professional surveyor from which you receive a report stating the condition of a property and whether or not any repairs need to be If you move home you will be able to transfer your existing mortgage product onto carried out. This service is less thorough than a full ‘structural survey’ (which might a new mortgage for your new property if you stay with us. All of the Bank’s be more useful for older properties), but provides reasonable detailed information mortgages are ‘portable’. Portability is always subject to Bank’s standard lending at a slightly higher outlay than a basic valuation. terms and conditions. Interest Only Mortgage Repayment Mortgage You only pay the bank interest on the money you have borrowed. The capital itself You make one monthly payment that covers both an amount towards repaying the is paid through a separate repayment vehicle such as an endowment or ISA. money borrowed and the interest being charged. Insurance See Interest Only Mortgage. Insurance products include payment protection, life assurance and buildings and contents insurance. Recommended to protect you and your property. 18 Standard Variable Rate (SVR) notes A rate of interest set by us which we charge for the money we lend on all of our mortgages, usually after an introductory period on a fixed, discounted, tracker or capped basis. Repayments on the SVR go up and down as the SVR changes. Stamp Duty A government tax you have to pay on the conveyance of your property if it costs more than £125,000. The amount due depends on the value of the property. Current arrangements for stamp duty are subject to government policy and may change in the future. Term The number of years over which you pay back your mortgage. Term Assurance A range of insurance products that can help repay a mortgage should the person paying the mortgage die. Decreasing Term Insurance The amount of life cover reduces as the mortgage is repaid. Level Term Assurance Covers the full amount of the mortgage throughout the term. Underpayment One of the major benefits of our mortgages. Once you have built up an overpayment fund, you can apply to reduce your monthly payments (underpayment) or withdraw some of the money at any time. Variable Rate (SVR) Many major lenders offer a variable rate mortgage based on a Standard Variable Rate (SVR). Valuation A valuation is carried out to check if a property is suitable for the lender to provide a loan on. ...is that everything? YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE Calls may be monitored or recorded for security and training purposes. The Co-operative Bank is authorised and regulated by the Financial Services Authority. Registered Office: 19 The Co-operative Bank p.l.c., P.O. Box 101, 1 Balloon Street, Manchester M60 4EP. Registered in England and Wales no: 990937.