Re; Mortgage Application for Insert Property Address

Name

Address

Date

Dear Name

Re; mortgage application for Insert property address.

I am writing to you in connection with our recent meeting on Date, during which we collated information in your Personal Financial Planning Profile. Primarily we discussed your mortgage requirements for your proposed mortgage / re-mortgage of the above-mentioned property. I can confirm that the application has now been submitted and we await the instruction of a survey.

During the course of the meeting we discussed your circumstances and established that you are single / married with no / one / two / three dependant children. You are employed / self-employed and receive a level of income as discussed which you feel should be sufficient to support the mortgage you require.

Your objective is

to purchase the above property as your primary residence / as an investment property

to remortgage this property which is your primary residence in order to achieve a more competitive rate, raise additional monies to fund the purchase of another property to let / use as a holiday home / consolidate other debts. (If consolidating debts include additional risk warning - Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage).

to re-mortgage this property which is currently rented, and raise further monies in order to purchase another property which you intend to let / will be your principle residence.

You expressed a preference for a

Either

fixed rate (over an XYZ year term) as knowing your future costs over this period is attractive to you. (add any additional background information as to why – e.g. income is tight, worried about rising costs – will circumstances change in a few years e.g. spouse returning to work thus increasing family income etc).

variable rate as you believe this will be cheaper in the early years and you are comfortable that this means your payments could increase at any time.

You anticipate that you will be able to afford the monthly payments on your new mortgage (if variable add - and have a good margin of tolerance should rates risein the near future)

You wished to assess the mortgage options open to you in order to achieve a competitive rate in the marketplace. Your mortgage will be for a total of approximately £1,234,567 subject to valuation of your property.

I provided you with our Client Agreement (and separate Mortgage Disclosure Document if you use one) together with my business card.

Your Mortgage

As you are aware there are a wide range of mortgage products available in the market place including fixed, discounted, tracker and capped rates.

Having considered many providers I recommend youarrange your mortgage with Name of provider.

Explain why e.g.

Our research indicates that the rate of interest charged is the lowest / very competitive within the market place.
The arrangements fee/s charged by the lender for the application is very competitive.
Name of Lender has a good reputation for service which is an important factor in dealing efficiently with your application (particularly as you need to act quickly).
Your requirements and circumstances have placed some constraints on the number of lenders prepared to assist, and in particular Name of Provider have indicated that they would be willing to consider an application

The rate of A.BC% is a fixed rate for number of years/ until Date. This means that your monthly payments will remain the same until then. Once the fixed rate has finished you will revert to the lenders variable rate which means that your payments may go up.

The rate of A.BC% is after a discount of X.YZ% for number of years / until Date. Once the discounted period has finished you will revert to the lenders variable rate which means that your payments will go up.

If tracker or capped, insert appropriate confirmation of the terms.

Your home is at risk if you do not keep up repayments on a mortgage secured on it. If you are consolidating unsecured loans using this mortgage, you should think carefully whether securing these debts against your home is wise.

Repaying your mortgage

Either

I suggested that you arrange your mortgage on a repayment basis over a 10 / 15 / 20 / 25 year term.

Explain why e.g.

If retirement age is a factor in determining the term, outline the circumstances.
If it will run beyond retirement age confirm how the mortgage will be funded.
A 10 / 15 / 20 / 25 year term strikes a comfortable balance for you between repaying the mortgage as quickly as possible, whilst at the same time being affordable.
You are concerned to ensure that the loan is fully repaid over the term and, provided you make all repayments as due, a repayment loan aims to ensure this happens.
You wish to see the mortgage balance reducing over the term.

In view of your wish to keep the monthly costs to the absolute minimum possible, I suggested that you arrange your mortgage on an interest only basis on a 10 / 15 / 20 / 25 year term.

By way of information you are aware that the monthly cost of a comparable repayment mortgage over the same term would be £AAAA.AA per month. Note that this figure is purely for information purposes – any application for a repayment loan would subject to lenders criteria.

You are fully aware that this means that none of the capital is being repaid, and unless you make alternative provision, you will still owe the same amount in 10 / 15 / 20 / 25 years time.

Having discussed this, you advised that -

Explain why/how etc e.g.

you receive substantial annual bonuses and intend to apply these as lump sums to reduce the mortgage

you will change this to a repayment mortgage in the future. It is important that you keep an eye on this and remember to do so – you will not receive a reminder from us nor in all probability from your lender.

you anticipate receiving an inheritance which will enable you to substantially reduce if not clear the mortgage. You appreciate the risks implicit in this of inheritances not materialising possibly due to the need for long term care, or other unforeseen circumstances.

this loan relates to an investment property which you feel you will be able to sell at a future time to repay the loan, if you have not already repaid it by then using other sources.

as you have an investment property there is equity and an income from this which you can use to repay the mortgage.

You are intending to sell the property before the end of the mortgage term with a view to downsizing your home. Yu are comfortable that the general level of equity that you have in the property will enable you to purchase an alternative property suited to your requirements.

Your initial monthly mortgage payments will be £A,BCD.EF. From our notes of your income and outgoings and our conversation/s while discussing your application it would seem that this should be realistic for you to sustain.

Fees

The fees attached to this mortgage are as follows:

£XYZ arrangement fee payable to Name of providerwhich you have opted to add to the loan.
Free basic valuation / £XYZ valuation fee.
Legal fees of £XYZ / Free legal fees

You are aware that adding the arrangement fee to the loan will incur extra cost over the life of the mortgage, reflecting the additional interest charged on this amount. Note that if you wish this charge can be repaid to the lender after completion (subject to the specific terms of your mortgage) which would avoid / reduce the on-going interest charge.

Name of provider will pay Name of Alifa Membera fee of £ABC for introducing you as clients to them. This is paid shortly after completion and does not impact in any way on the terms that you have been given.

Penalties

There are redemption penalties until Date. Thereafter there are no penalties. You can however, make overpayments of up to XY% of the outstanding mortgage balance per annum without penalty during the fixed rate / initial discount period.

General insurance

We also discussed -

Buildings and Contents insurance and you will arrange these independently.

With regard to income protection, life insurance and critical illness insurance –

Having discussed this you wish to consider appropriate cover which we will deal with under separate correspondence.

You feel that the level of cover you already have is sufficient and you do not wish to consider this further. (Note to adviser – if this is selected it may be appropriate to add any comments if you believe that the cover is in fact inadequate).

you are arranging these independently.

Conclusion

Please read the mortgage offer which will be sent to you in due course. This will contain important information about your mortgage and will give you full details including any charges etc. I hope that the above information accurately reflects the full details we discussed, however if you have any further questions please call us on0123 456789.

Finally may we thank you for the courtesy offered to us during the course of our discussions and I trust you are happy with the service we have provided. In the meantime, if you know anybody who may benefit from our services, please feel free to give them my name and telephone number.

For our records, please would you sign the enclosed copy of this letter and return it in the pre-paid envelope I have provided.

Thank you for choosing to place your business with Name of ALIFA member.

Yours sincerely,

Adviser’s Name

Title

SIGNED:

Client’s Name (s)