Additional borrowing is also known as a further advance. It can allow you to borrow more money which is secured against your property. Often people borrow more for home improvements, but it can be used for a range of reasons including debt consolidation and second property purchases.
Affordability is one of the measures that we use to calculate how much you can borrow. This takes into consideration your current situation, including dependants, your income and outgoings.
We take a responsible approach to lending to ensure that you are not overstretching yourself, so we will take into account your loans and other outgoings when considering how much we can lend to you.
All credit commitments, such as school fees and car loans, must be deducted from gross income prior to multiplication. The annual amount of these commitments is increased by 42% before the income multiples are applied, to give a fair comparison to gross income.
Find out how much you could borrow using our online Mortgage Calculator.
Agreement in Principle (AIP)
When you decide to buy a property, you may want to know how much you can borrow and whether or not you qualify for a mortgage. We will look at your income and commitments and tell you an amount we would be prepared to lend you. This agreement is 'in principle' and means the details you give us will need to be verified when you apply for your mortgage.
Annual Percentage Rate of Charge (APRC)
The Annual Percentage Rate of Charge (APRC) is an industry-wide method of comparing interest rates and charges for credit between lenders, so that you can make an informed decision on the price implications of your mortgage. Lenders are required to show an APRC whenever a 'published rate' is shown.
The APRC is a single rate that takes into account any fees associated with the mortgage, the loan amount, the repayment method, the mortgage term, the interest rate and how that interest rate is charged (annually, monthly or daily).
It is important to look at the APRC because it reflects the true cost of a mortgage over the long term. For example, some lenders may offer a good introductory rate but charge a higher than average standard variable mortgage interest rate at the end of it, which will increase the overall cost and therefore the APRC.
We sometimes charge a fee which is payable as part of the cost of the product. An application fee is similar to a booking fee (see booking fee) and on some mortgage products, there is an application fee and a booking fee payable.
An account is classed as being in arrears when the due date for payment has passed without the payment having been received.
Some lenders will charge a fee to arrange your mortgage for you. This is to cover the cost of the administration associated with assessing your application and setting up your mortgage account.