eSignature Lawfulness for Mortgage in United Kingdom - Transforming the Way Businesses Sign and Send Documents

How to eSign a document: e-signature lawfulness for Mortgage in United Kingdom

Unless you’re one of the lucky few who  have a spare zillion dollars tucked away,   a mortgage is likely to be the biggest  debt you’ll have in your lifetime. The key to borrowing potentially hundreds of  thousands of pounds is to know exactly what   you’re getting yourself in for, so we whipped up  this video to take you through the essential info,   interest charges and some different types of  mortgages and payment schemes available. And,   if you stick around till the end of  the video there’s also a short section   busting open some mortgage  jargon terms you need to know. A mortgage is a secured loan that is  specifically designed to help you buy a property.   The loan is secured against your house which  means that if you fail to make your repayments   your bank or lender could seize your property  and sell it to recover the money they lent you. Typically, you’ll have to stump up a standard  deposit amount of 10% of the property’s value   before the bank will give you a loan-to-value  mortgage for the rest. Loan to value or LTV   is a term used to compare the value of your  mortgage compared to the price of the home. So, let’s say the house you want to buy is  £100,000. You’ll need to save up a 10% deposit   amount of £10,000 and the bank will give you  a 90% LTV mortgage for the rest worth £90,000. The amount of deposit you need to pay will  vary depending on the type of mortgage or   mortgage scheme you have. For example, if you take  advantage of the government’s 95% mortgage scheme,   you’ll only be on the hook for a 5% deposit -  and then obviously the rest of the mortgage. Unlike your phone contract, which you’d  expect to pay off after a few years,   mortgages tend to be repaid over 25 to 35 years.  And you can choose one of two options to repay it. Interest only repayments are when you just  pay off the loan interest over the 25 years.   Your monthly repayments are likely to be  much lower, but you will still have to pay   off the full amount you borrowed at the end  of the term so make sure you factor that in. With a repayments style mortgage, you  will pay off both the interest charges   and the mortgage each month. Your monthly  payments are likely to be more expensive,   but you will have cleared the entire  debt by the end of the 25-35 years. Because your bank or lender has the added safety  net of securing the loan against your house,   mortgage interest rates tend to be much  lower than, say, your credit card. Although,   because you’re borrowing so much money and  typically paying it off over a 25 year period,   this still adds up to a fair amount. Interest charges come in one of two  forms. A fixed rate mortgage means   that your interest will stay the  same for an agreed period of time,   usually between 2 and 5 years, although  some lenders will go up to 10 to 15. A variable rate mortgage, you guessed it, will  have interest rates that fluctuate over the life   of the mortgage. This could be due to changes  in the Bank of England’s base interest rate,   the lender reevaluating your risk or  changes in the economy. Both have unique   pros and cons that should be weighed  up against your personal circumstances. Helpfully, these are just two  of many options for working   out and paying back the interest in your mortgage,   so it could be worth speaking to a mortgage  advisor to figure out the right one for you. Depending on what you plan to do with your  property, you will need a different type of   mortgage. For example, if you plan on renting  out the property, you will need a buy-to-let   mortgage. Similarly, if you plan on  buying and selling the property as a flip,   you would want to look at buy-to-sell  mortgages, otherwise known as bridging loans. There are also a bunch of mortgage schemes  available designed to help people get on the   property ladder sooner, even if you haven’t  yet saved up enough funds. These include the   government’s 95% mortgage scheme, where you  only need to cobble together a deposit worth   5% of the property’s value, shared ownership,  where you buy a percentage of the property and   pay a lower rental amount on the rest, and  help-to-buy where the government tops up   a percentage of your mortgage. This can  be up to 40% for those living in London. Many of these schemes are only available to  first-time buyers and may have additional   restrictions such as being limited to  properties below or above a certain value. Stamp Duty, official title Stamp Duty Land  Tax or SDLT, is a tax that applies if you   buy a property or land worth over a certain  threshold in England and Northern Ireland. Freehold is when you own both  the house and the land it is on,   with no time limit on your ownership. Leasehold is when you own the  building but not the land it is on.   A common example of this is when  you own a flat in a building.   Essentially, you lease the land from the landlord  for a limited time (although this could be upwards   of 100 years) and may have to abide by some rules  set by the landlord like no pets or subletting. Negative equity is when you owe more  on your mortgage repayments than the   value of your property. For example, if we go  back to the £100,000 house you bought earlier   with a 90% LTV loan of £90,000. If the market  crashed and your house suddenly was only worth   £80,000, you would be in negative equity as  you still owe £90,000 to your mortgage lender. For more information on mortgages and to  start comparing the right options for you,   visit finder.com. I’ve tagged a whole bunch of  useful information in the description below. If you enjoyed this video, give us  a like and subscribe to our channel   and hit that bell button to be the  first to know when a new video drops. Thanks for watching.