'hidden' HLC ?

kdes24uk

taking out a part interest part repayment mortgage of approx 350k at 85% LTV (415k). Flexible/Level tracker. BS Website only referres to a HLC at 90% LTV

Just recieved our Official mortgage offer from the BS
and it referes to a HLC of £2500 which will be used as insurance etc but
a) will be deducted from the advance and
b) REFUNDED when the mortgage is paid off.

I accept the BS can offer as they want and i will be ringing them Monday to query but I've not come across a HLC mentioned and operated this way before - is it normal ?

kev

MarkyMarkD

I don't understand that description of an HLC at all.

Can you quote the exact words from the mortgage offer, please?

kdes24uk

(SC-A001) we would normally lend £307000 on the security of the property but are prepared to lend £349000 subject to the payment of a higher lending charge of £2552.25. This fee will be deducted from the amount of the advance. The HLC will be used to purchase insurance protection etc .....(snipped bit about future liabilities and debt recovery)

(SC-A002) Subject to the advance not exceeding 90% of the lower of the purchase price or valustion the Higher Lending Charge in SC-A001 will be refunded on completion of the loan.

(sc-A153) by way of concession , the repayment of the principle will be suspended until the expiry of the term and the INTEREST ONLY amount shall be accepted in lieu of the MONTHLY ammount for as long as ......etc etc

MarkyMarkD

OK. Taking the first two paragraphs:

- they historically charged HLC over 75% LTV like most lenders;
- but now they only charge HLC over 90% LTV.

The two paragraphs basically say that they are paying the HLC for you. It's not refunded when the mortgage is paid off, it's refunded on completion - which is exactly when it's charged.

I think the final paragraph is unconnected, and just says that your mortgage is interest only rather than repayment.

kdes24uk

Thanks for that

I did hope it might be something along those lines - the words "completion of the loan" could be ambiguous in my view



Kev

Scott

Completion refers to the beginning of your mortgage, redemption is the end of your mortgage.

MarkyMarkD

Industry standard jargon, kdes. I can see what you mean - from your point of view, completion is when you complete paying off the debt - but completion is also a legal term for completing the purchase of your property and hence starting your mortgage.