TAEWAN KIM (Tay)1 MORTGAGE LOAN

TAEWAN KIM (Tay)2 CONTENTS I.Mortgage loan basics II.Mortgage loan types III.Mortgage in the U.K IV.Mortgage insurance V.Business mortgage loan

TAEWAN KIM (Tay)3 WHAT IS MORTGAGE?  A loan to finance the purchase of real estate, usually with specified payment periods and interest rates.  The borrower gives the lender a lien on the property as collateral for the loan.

TAEWAN KIM (Tay)4 MORTGAGE LOAN TYPE  Interest Interest may be fixed for the life of the loan or variable, and change at certain pre-defined periods the interest rate can be higher or lower.  Term Mortgage loans generally have a maximum term that is the number of years after which an amortizing loan will be repaid.

TAEWAN KIM (Tay)5 MORTGAGE LOAN TYPE  Payment amount and frequency The amount paid per period and the frequency of payments.  Prepayment some types of mortgages may limit or restrict prepayment of all or a portion of the loan or require payment of a penalty to the lender for prepayment.

TAEWAN KIM (Tay)6 MORTGAGE IN THE U.K  The mortgage loans industry and market There are currently over 200 significant separate financial organizations supplying mortgage loans to house buyers in Britain.  The major lenders include 1. Building societies 2. Banks 3. Specialized mortgage corporations 4. Insurance companies Pension funds

TAEWAN KIM (Tay)7 MORTGAGE IN THE U.K  Self Certification Mortgage  Self Certification Mortgages Known as "self cert" mortgages  Be able to employed and self employed people who have a deposit to buy a house but lack the sufficient documentation to prove their income.  Have two disadvantages 1. The interest rates charged are usually higher than for normal mortgages 2. The loan to value ratio is usually lower

TAEWAN KIM (Tay)8 MORTGAGE IN THE U.K  100% Mortgage  Normally when a bank lends customer money they want to protect their money However,100% mortgages are mortgages that require no deposit.

TAEWAN KIM (Tay)9 MORTGAGE IN THE U.K A fixed rate: The interest rate remains constant for a set period,typically for 2, 3, 4, 5 or 10 years. -Short term – less than 5 years. -Longer term – more than 5 years. A capped rate: 1. Similar to a fixed rate 2. The interest rate cannot rise above the cap but can vary beneath the cap. 3. Sometimes there is a collar associated with this type of rate which imposes a minimum rate. 4. Capped rate are often offered over periods similar to fixed rates.

TAEWAN KIM (Tay)10 MORTGAGE IN THE U.K  A discount rate: There is set margin reduction in the standard variable rate for a set period, typically 1 to 5 years. Sometimes the discount is expressed as a margin over the base rate and sometimes the rate is stepped.  A cash-back mortgage: A lump sum is provided as a percentage of the advance.

TAEWAN KIM (Tay)11 MORTGAGE INSURANCES  Mortgage insurance is an insurance policy designed to protect the mortgagee lender from any default by the mortgage borrower.  It is used commonly in loans with a loan-to-value ratio over 80%, and employed in the event of foreclosure and repossession.foreclosure and repossession.

TAEWAN KIM (Tay)12 Business Mortgage Loan  Business loan mortgage is in the process of securing a business loan.  The other name is commercial mortgage loan. Terms of business mortgage loan -The term of a business mortgage loan : from 5 years to 30 years. -business organizations choose to repay the loan: 20years to 30 years.  Use of business loan mortgage  Business loan mortgages are generally used to acquire land or any commercial property to start a business.  These loans are also taken to expand an existing business. Another use is to refinance a credit taken earlier.

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