What is an Initial Disclosure Document?
The FSA has designed the Initial Disclosure Document to provide information about firms that is easy to compare. The document should provide a clear understanding about any service being offered and enable consumers to make informed decisions on a company and whether or not to accept their service.

What is a Key Facts Illustration (KFI)?
The FSA has designed a Key Facts Illustration to ensure that consumers receive consistent illustrations, with content shown the same way, from all mortgage providers. This allows you to compare like with like.
Consumers must have personalised product information, in the form of a KFI, at an early stage in the buying process, to ensure an easy comparison of different products. It also ensures consumers receive the information they need to decide whether to apply for a particular mortgage.

What are ‘exclusives’?
Choicemortgages UK Ltd occasionally have best buys or exclusive products that may not be available directly from the lender or from other brokers. Due to us being an intermediary we save them money on marketing and distribution therefore they are able to adjust the product to make it more attractive. For customers, it's one of the advantages of using a broker to find a mortgage rather than going directly to your lender.

Can you help me find home insurance?
You will almost always need to arrange buildings insurance when you take out your mortgage. The lender will often offer you their own policy, or you can shop around for the best deal from other insurers. Call us to find out how we can help.

How do I track the progress of my mortgage application?
Unlike some other mortgage brokers who sub-contract the administration of their mortgage applications to another company, at Choicemortgages UK Ltd we handle every application we receive within our own team. As soon as we receive your application, we assign a dedicated member of our team to your case. That means you can always talk to someone who is familiar with your case. You'll have their work contact details - phone and email - to get in touch when you need to.
Your administrator will follow your application through from start to finish and tackle any problems which arise on the way. They'll contact you by email or phone to let you know of progress and whether they need more information from you.

What are the benefits of using a broker like Choicemortgages UK Ltd?
Here at Choicemortgages UK we look through and compare a vast range of mortgages from the leading providers in the UK . In fact, we’ve access to over 30 000 mortgage products (and we also offer exclusives not available directly from the lender). Our aim is to provide you with top quality service from a dedicated team from start to finish.

What is an APR?
APR stands for Annual Percentage Rate. A lender is always required to quote the APR when advertising a loan or borrowing rate.
The lender will usually quote the headline rate and the APR next to it. The headline rate states the rate of interest you pay per month or per year on the mortgage, while the APR is based on the total amount of interest that will be paid over the entire period of the loan. It also takes into account any charges that the borrower has to pay during the loan period.

What is 'buy to let'?
Buy to let deals are specialist mortgages designed for people who want to purchase a property in order to rent it out to tenants. It's becoming an increasingly popular way to invest. Properties generally provide income for the investor from the tenant's rental payments and growth from any increase in the property's value.

What is a flexible mortgage?
Flexible mortgage' is a term that's used a lot; a truly flexible mortgage should have all of the following five characteristics:
- Interest calculated at least monthly, but preferably daily.
- Overpayments are allowed without incurring Early Repayment Charges (either unlimited or up to a stated maximum percentage of the mortgage).
- You can take payment holidays.
- You can make underpayments.
- You can draw down any unused facility.
Even when mortgages meet all these criteria they can still have different features. We’d be happy to guide you through them, or if you’re thinking of switching your mortgage, use our flexible mortgage calculator to see whether you could be saving on your payments.

Who’s likely to benefit from a flexible mortgage?
We’d generally recommend thinking about a flexible mortgage if you fall into any of the following categories:
- You're self-employed and have an erratic income or irregular payments of varying amounts.
- You're employed, but bonus or commission payments make up part of your salary.
- You're self-employed and pay an extra monthly amount into your mortgage, then pay your 6 monthly tax bill out of your mortgage (as the money put aside reduces the mortgage interest in the meantime).
- You're a working couple with surplus cash, but you're planning to start a family and want to be able to reduce payments when the children come along and your income decreases.
- You can afford to overpay your mortgage now but you're looking to take a 'sabbatical' or unpaid leave in the future for a significant period of time.
- You like the idea of overpaying your mortgage when you can afford to, as you want to pay off your mortgage more quickly!

Why do the best deals go so quickly?
When a lender offers us a special mortgage, they allocate a maximum amount of money to be lent on that particular product. If it's a market-leading deal, this allocation may be used up very quickly!
When this happens, lenders generally raise more funds to meet the demand. By the time they've raised the funds, the market may have changed so much that it's no longer possible or valuable to them to offer the original product. They might then create a new product which would appear as a different offer, or they might decide to use these funds elsewhere, in which case you won't see the product again.
In some cases they may withdraw the product in between the time that you apply and the time that your application is finally submitted - this could even happen overnight! In these instances we’ll always try to find you a similar product.

What other costs are there in taking out a mortgage?
We will always show you the costs related to taking out a mortgage on illustration of key facts. We can estimate legal costs for you (which tend to vary in line with the cost of the purchase). Generally, the other costs involved are:
• Valuation fee ( usually payable on application).
• Booking fee (usually payable on application).
• Arrangement fee (usually added to the mortgage or payable on completion).
• Legal costs, including stamp duty (a Government tax) on the purchase of properties over £125,000, land registry fees and various search fees.
• A Higher Lending Charge (if applicable).
• Term assurance (recommended, but not always compulsory).
• Accident Sickness and Unemployment insurance (recommended, but not compulsory).
• Buildings insurance (either from the lender or a third party - many lenders charge a small fee if you go elsewhere).
• Contents insurance (recommended, but not compulsory).
Some mortgages offer a valuation, or a refund of the valuation fee on or after completion. Most fixed or capped rate mortgages have a booking and/or arrangement fee (charged by the lender). Some discount and cashback mortgages have fees, but by no means all.
For some mortgages, legal costs are paid by the lender. On others, the lender makes a contribution towards these costs. Some mortgages give a cashback of, say 0.5% to 1%, which can be used to pay some of the house buying costs.
Whilst it is obviously helpful to have some or all costs paid by a lender you will sometimes find that offers which include no or low fees have a higher interest rate than another mortgage where you have to pay all the costs. The costs of setting up a mortgage are more important on a small mortgage, whereas the interest rate is more important on a larger mortgage. For a small mortgage on a valuable property a valuation is particularly beneficial.
You should always look at the total mortgage package and not just focus on costs or on the interest rate.
And bear in mind that on the purchase of properties over £125,000 the biggest single cost will normally be the stamp duty!

What is the difference between a Standard Variable Rate (SVR) and a tracker rate?
Each lender decides what SVR they will charge. Although this is set taking account of interest rates generally, and based on how competitive they want their SVR to be with other lenders, it is not specifically related to any other interest rate. And, although lenders normally change their SVR as a result of Bank Base Rate changes they don't always change them by the same amount.
Because of this tracker rates have become more popular and many lenders now offer at least one tracker mortgage. A tracker mortgage is simply a mortgage that tracks an independently set interest rate, usually Bank Base Rate but sometimes the LIBOR rate. (LIBOR stands for London Interbank Offered Rate and it is the rate at which banks lend to each other.)
The benefit of having a tracker mortgage is that you are guaranteed that any falls in interest rates will be passed on to you. Of course, when interest rates rise this is also guaranteed to be passed on.
Most Base Rate tracker mortgages reflect any change in Base Rate from the beginning of the month after the Base Rate has changed.

Do you always need life insurance?
You’ll probably want your dependants to be able to continue living in your house if you die. Life Assurance would provide your estate with a lump sum to pay off your mortgage with. Without it, or some other way for the mortgage to be paid off, your mortgage provider would probably repossess the property. That's why many lenders suggest you buy life cover (also referred to as 'Term Assurance' or 'life insurance') when you take out your mortgage. You may also want to think about Critical Illness Cover, which would pay off your mortgage if you suffered a critical illness that affected your earning power, such as a stroke or cancer. We can give you immediate quotes for either, please just ask.

Does your loan have to finish by a certain age?
A mortgage is usually designed to finish no later than a borrower's normal retirement age. This age is currently 65 for employed people (male and female) and 70 for the self-employed. Some lenders will consider a longer term providing you have enough income after retirement, though.

Should you rule out mortgages with Early Repayment Charges?
Most mortgages come with Early Repayment Charges (ERCs), yet it’s the length of these that should be your main consideration. The best fixed, capped and discount mortgages in the market will have ERCs that last as long as the initial preferential period, leaving you free to remortgage at the end of this period without penalty. However, there are some mortgages that have ERCs beyond the term of the special rate and these are said to have a “redemption tail”.
Products with a redemption tail often come with a very low rate for an initial period, and then a prolonged period on a Standard Variable Rate with onerous penalties that keep you tied in. This way, a lender can effectively make back the money they lost subsidising the very low initial rate. For most people it’s best to avoid a mortgage with ERCs that apply after any special rate has ended.
As the mortgage market evolves, more and more lenders are offering products with absolutely no ERCs that have just as good a rate as their counterparts which do. However, these are not that prevalent at present and are more the exception than the rule.
For the vast majority of mortgage holders, accepting some degree of ERC within a special rate period is fine as they’re unlikely to move away from a preferential rate.

How are Early Repayment Charges calculated?
Early Repayment Charges (previously known as redemption penalties), can be calculated in several different ways. The charge will be based on the amount of the mortgage you redeem and will usually either be a percentage of this amount or a number of months' interest.
If the lender charges you a number of months' interest, the rate they use in the calculation must be based on their Standard Variable Rate (SVR) or the actual fixed / capped / discount rate being paid.
Sometimes the Early Repayment Charges remain the same during the whole period of the special rate; for other mortgages it decreases over the special rate period. But there are mortgages where the Early Repayment Charge actually increases during the special rate period.
It's worth bearing in mind that most lenders will allow you to move your mortgage to a new home without incurring an Early Repayment Charge (this is usually known as a portable facility).
Some lenders will allow you to make overpayments (beyond your normal monthly figure). These will normally be limited to around 10% per year of the outstanding mortgage or, say, 25% of the total mortgage. This flexibility is particularly useful if you have a fixed or capped rate mortgage, as it lets you repay some of the loan if interest rates are low and you have some spare cash. We'll always make it clear which Early Repayment Charges apply to each mortgage (if any), and how they are calculated. We'll also show you, for the amount you wish to borrow, what the Early Repayment Charges will be (if any) if you repay the mortgage early over various years.

How do you repay capital with an interest-only loan?
If you have an interest-only mortgage, your monthly payments will pay off the interest on your loan, but not the money you borrowed in the first place. You can pay off the original money you borrowed any way you like, but you often have to let your lender know how you're going to do so.
People often intend to pay off the capital by saving into a separate plan. The proceeds from this then go to pay off the capital when the mortgage term is complete. The main options for saving in this way are an Individual Savings Account (ISA), pension or another repayment vehicle.
To understand the right repayment option for your circumstances we recommend you seek financial advice.

How often do lenders adjust your interest bill?
Historically most lenders have calculated interest annually. This means the interest you pay during a year is based on the amount of the loan that was outstanding at the beginning of that year. However, most lenders will make an adjustment if you repay a lump sum during the year (subject to a minimum payment of £250 - £1,000; this minimum does vary by lender).
Using an annual interest calculation can be a problem for repayment mortgages because it doesn't take into account the lower interest costs you should receive as you pay off capital during the year. However, in the early years of a standard term repayment mortgage (25 years), this doesn't really make much difference because you are repaying very little of the capital.
Where this does become important is if you have a shorter term repayment mortgage (eg 10 years) or if you are nearing the end of your repayment mortgage term. This is because the proportion of the monthly payments that represent repayment of capital increase as the mortgage term gets shorter.
For interest only mortgages - which include endowment, ISA and pension linked mortgages - it generally makes little or no difference whether interest is calculated daily, monthly or annually.
Many lenders now calculate interest daily or monthly. The difference between monthly and daily calculations is usually small and is likely to be much less important than other differences between mortgages.
However, you need to bear in mind that some of the best interest rates are available from lenders that only offer annual interest calculations (often because they have been unable as yet to change their computer systems to allow daily or monthly calculations). The differences in the actual interest rate and other aspects of the deal will often outweigh differences between methods of interest rate calculation. We’ll always show you so you can make a full and informed comparison between mortgages.

What is Compulsory insurance?
Compulsory insurance is where the lender insists that you buy their own buildings and contents cover as part of the mortgage deal. The DTI (Department of Trade and Industry) has criticised lenders for making compulsory insurance a condition of a mortgage offer.
As a result, some lenders have stopped this practice but others have got round it by quoting two interest rates: a headline rate if you take their insurance and a more expensive rate (usually about 0.25% higher) if you don't. They may also charge administration fee. We will always tell you if the lender you are looking at insists you buy buildings and contents insurance from them.’