GENERAL FAQ | REPOSSESSION | TYPES OF MORTGAGES

General Questions

How long will it take to complete my mortgage?
This answer depends on what stage you are at in the remortgage process. If you are at pre offer, CCHL has to get in any relevant references, valuation and any outstanding documents, all of which are chased regularly. Once those are received CCHL aims to get it submitted to the new lender and then offered in a week. As long as the remortgage is a straight forward case completion from offer is generally 7-10 working days. Ideally the process should take 4-6 weeks.

Will you pay off my current lender?                      
Yes, the soliticors will clear the balance on your current mortgage and any other registered charges or restrictions

Do I need to appoint my own soliticor?                     
No - Crystal Clear Home Loans can appoint one for you. We have a ‘panel’ of solicitors who specialise in remortgage business. We can also build these costs into your new mortgage.

Will I have to have my property valued & what if the house is not valued at what I think it is worth?
A valuation will be carried out of your property. In the event that the property is downvalued we will contact the lender, if required, to arrange an alternative product within the constraints of the lenders maximum Loan to Value.

How can Crystal Clear Home Loans help where others can't?
We have schemes that are not widely available in the high street.

How does this scheme work in general?
Quite simply we remortgage you from your existing lender and give you a fresh start.
Please see here for more details.

Can you help if I don't have any proof of income!
Certainly, as we have self certification schemes for the self employed. Please see here for more details

Repossession

Do you have any quick tips for stopping repossession?
Your mortgage is a priority debt. Treat your arrears situation seriously.
Open all letters and reply promptly both verbally and in writing
Face the music. Every day you delay, lenders may add charges to your arrears.
Ask family or friends to help you and make sure you pay them back.
Do not hand over the keys to your house - your debts may increase.
Behave honourably and stick to the terms of any agreement you negotiate.

Should I consider selling my house quickly?
Solutions that offer a quick sale of your property or the potential of selling and renting your home back – often with an option to re-purchase at a later date, may at first appear to be way to avoid repossession, but these may not be advantageous to you in the long term. Should you follow this approach you will in effect be ‘stepping off’ the property ladder, returning to rental housing and will then be faced with the task of raising a deposit when you hopefully come to purchase again in the future.

There are many companies advertising on the internet and elsewhere, offering a fast purchase service for properties for owners facing repossession, divorce and any other reasons where a quick sale may at first, seem desirable. In general, most state they can arrange a quick sale within a three to four week period and even where eviction is imminent, that a sale transaction can still be secured within a matter of days, sometimes hours.

However and again in general, most of these services may not have the best interests of the client in mind and this is often reflected by the quick sale offers which are received, with many offers in the region of 70% of the market value being made for your home.

Potentially this option could result in you not only losing your home but also a significant amount of the monies that you have secured in the property.

Even if in the long term, your circumstances dictate that the property needs to be sold, it is far more beneficial to remortgage or even re-finance the arrears now, thus leaving you free to sell your property for full market value at a later date.

For assistance with your repossession or arrears issues call one of our Advisors now on 0800-881-8024 - you will not be charged for this call.

Should I consider selling my house quickly and then rent it back?
A further option which is available is ‘Sell to Rent’. The Companies offering this service have the resources to act quickly and agree a purchase of your property and then negotiate to rent this back to you at the market rental value.

This method does mean that you get to stay in your home - but as a tenant and not the owner. Dependent upon the area where you live, the monthly rental can sometimes be not that dissimilar from the previous monthly mortgage payment you were paying and indeed, can often be higher. Accordingly, if you are struggling with the mortgage payments now, the monthly rental will be just as difficult to manage, thus making ‘Sell to Rent’ a potentially more expensive option in the long term. ‘Sell to Rent’ offers you an option but should only really be considered as an absolute last resort, after all other possible alternatives have been fully exhausted.

I've been given a court date, what do I do now?
You are summoned to court to find out whether or not the lender can get permission from the courts to apply for a repossession order. It is unlikely that the courts will grant this on the first occasion and they will probably grant a suspended repossession order. Wherever possible, you must make every effort to attend. If you have a joint mortgage, only one party need attend. Your home is at risk - so making yourself available is vital. If you absolutely cannot attend, set out your position in writing, and confirm to the court what you would like to do.

What is a suspended repossession order?
You must abide by the courts ruling for you to agree to a payment schedule with the lender, to reduce the arrears balance. If you do not, then the lender can apply for a repossession order with the courts probably taking the side of the lender. The Courts look upon an outright Possession Order as an extreme measure and will do so only if there seems to be no hope that the borrower can resolve the situation. Failure to conform to the terms of the suspended possession order will enable the lender to apply for an "Eviction Warrant" without further Court action.

When an eviction warrant is in force the Court Bailiffs set a date to visit the property to ensure that it has been vacated. At any time before the Eviction date an application can be made to the Court to suspend action on the grounds that the borrowers can remedy the situation. The application has to convince a Judge of this. CCHL can help you in tailoring this application/letter relevant to your case, to the lenders and courts.

Could my current lender continue to pursue a repossession order on my property if I have found another lender who will allow me to remortgage or a buyer for it?
Mortgage lenders are required to take all circumstances into account when making the decision on dealing with a case involving mortgage arrears; and repossessing your home should only be used as a last resort. The decision to pursue a repossession order remains the right of your lender. The County Court will weigh up your position versus the lenders and decide whether or not a repossession order should be granted..

What is a shortfall debt?
After a lender repossesses a property, interest will generally continue to be charged on the mortgage loan until the property is sold. There will also be other costs charged to the mortgage account, including estate agents' costs in selling the property and legal costs. The lender has a legal duty to sell the property for the best price that can reasonably be obtained. If this results in a surplus after all the money owed to the lender and any other secured lender has been repaid, then this surplus is returned to the former borrower. But if the sale proceeds are not enough to pay off the money owing to the lender, the borrower faces a "shortfall debt", which they still owe to the lender after possession.

Types of mortgages

Fixed Rate Mortgages
A fixed rate mortgage provides guaranteed monthly payments for a predetermined period of time. If the bank’s base interest rate rises, your payments will not, which is excellent if you’re on a strict budget. You’ll always know exactly how much your mortgage payments will be for as long as the rate is fixed for. However, if general interest rates fall below the figure you’ve fixed your mortgage at, you don’t get to take advantage of these savings and may have to continue to pay the higher mortgage rate.

Variable Rate Mortgages
With a variable rate mortgage, your interest rate set by the lender is linked to the Bank of England’s base rate and moves up and down in line with it. If the base rate goes down, you’ll benefit from lower monthly payments. If the base rate goes up, so do your mortgage payments.

Tracker Mortgages
With a base rate tracker mortgage the rate of interest you pay is tied to the base rate set by the Bank of England.Typically the tracker mortgage rate will be set as a percentage above the base rate and although the resulting interest rate is usually lower than a mortgage lender's standard variable rate, this will vary from lender to lender.

Discount Rate Mortgage
A discount rate mortgage is essentially a standard variable rate mortgage, so it still moves in line with the Bank of England’s base rate, but it also has a discount thrown in for a set period of time (typically 1-5 years.) Like a variable rate mortgage, if the base rate goes down so do your mortgage payments. With the discount thrown in, it often means that you’ll have a couple years of lower than average payments. However like a variable rate mortgage, if the base rate goes up, so do your payments

Repayment Mortgage:
Your monthly payments gradually pay off the amount you owe as well as paying the interest charged on the loan. Provided you make all the agreed payments, the loan will be fully paid off by the end of the mortgage term and you will own your property outright.

Interest Only Mortgage:
Your monthly payments cover only the interest on the loan. They do not pay off any of the original loan. You will need to arrange to pay separately into a savings or investment scheme (eg. pension mortgage or endowment) to build up savings to pay off the mortgage at the end of the term. It is your responsibility to make sure you have enough money to repay the mortgage at the end of the term, otherwise you could lose your home.

Flexible Mortgage:
A flexible mortgage allows the following without penalty:
Making over/under payments
Payment Holidays
Borrow back on payments already made

The implications of calculating interest daily.
Fully flexible mortgages have interest calculated daily, and any payments and overpayments are credited to your mortgage account as soon as they are paid, so you are immediately paying interest on a smaller amount of debt. This saves you money in interest charges that would otherwise add up to a significant sum over a number of years. Traditionally, mortgage interest was calculated and applied annually in arrears, so you would be paying interest on the same amount of debt all year, even though you had been gradually decreasing it during that time.