Mortgages are highly regulated by the Financial Services Authority and are frequently seen as complicated and difficult to understand. We believe in trying to keep things as simple as possible and so have tried to keep the paperwork to a minimum whilst still providing all the information you need in order to make a balanced judgement.
We only provide our own mortgage products and therefore do not offer an advisory service.
Our mortgages are only available to members of the credit union and are subject to availability of funds.
At a glance:
- Fixed rate of 6.3% for the FULL term of the mortgage.
- Up to 100% loan to value.
- Fee of £750 which is added to the loan.
- Family member deposits up to 10% of the property valuation or purchase price as a guarantee.
- Guarantor receives dividend on their deposited security.
Who can apply?
Any member of No1 CopperPot Credit Union over 18 buying a property they wish to mortgage and with a family member who is willing to act as a guarantor with cash security to offer can apply. Your family member must also be a member of No1 CopperPot Credit Union.
How does it work?
This mortgage is designed to help first time buyers who don’t have a large deposit get on the property ladder, although it is not exclusively for first time buyers. You can borrow up to 100% of the value of the property which means you don't need any deposit. Instead, you will need a guarantor; somebody who is a member of the credit union and is willing to put up a cash deposit as security. The security will be held in a Secure Savings Account in the guarantor’s name and will earn a dividend at the prevailing Member Account rate.
What's the maximum amount I can borrow and over how long?
There is no maximum amount you can borrow and the term can be up to a maximum of 25 years. Lending guidelines are based on 4 times your salary if you are applying for a mortgage in a sole name, or 3.5 times the combined salary if you are applying for a joint mortgage. The maximum we will lend is 100% of the property valuation or purchase price whichever is lower.
What does the guarantor have to provide?
The guarantor has to provide funds that will bridge the gap between 90% and the purchase price. This means that if you borrow 100% of the purchase price, your guarantor will need to deposit 10% into the Credit Union. Similarly, if you had a deposit of 5% and therefore only needed to borrow 95%, your guarantor would only need to deposit the remaining 5% into the Credit Union.
Your guarantor will need to seek legal advice to ensure they know what is involved.
The funds cannot be withdrawn until the mortgage falls below 90% of the property valuation (either the initial valuation or a new valuation which would need to be paid for by the Member). The guarantor may, however withdraw any dividends credited to the account.
What additional costs are involved?
There is a fixed arrangement fee of £750 which will be added to the loan so that you won't need to find the money up front. The fee is only payable once the mortgage is drawn.
You will also need to have the property valued for the security aspect of the mortgage. We will require that you use our valuation panel, Countrywide Surveyors. You must cover this cost and it is not refundable should the purchase not go ahead. The cost of the valuation may vary depending on the value of the property. This is a basic valuation which only assesses the actual value of the property to ensure that it is adequate as security for the mortgage. It will not reveal any hidden structural defects or other issues. If you wish to have a more in depth survey that assesses if the property is in good repair and highlights any hidden defects you may want to undertake a HomeBuyers Report as part of your survey. We can arrange this for you through Countrywide Surveyors. There will be an additional charge for this report. There is also a third type of survey that you may be interested in known as a Full Structural Survey. This is a much more detailed survey which would need to be negotiated with the surveyor and is often recommended for older properties.
What happens if interest rates go up?
The Bank of England base rate may change but your mortgage with us will remain at the fixed rate it was when you took it out. This is what is really unique about this product and allows you to plan your budget for the life of your mortgage. You need never have to worry again about fluctuating interest rates.
What happens when the loan to value reaches 90%?
Once the loan to value rate falls below 90% your guarantor can be released and their funds withdrawn if they wish. The loan to value level is determined by either the original valuation compared to the outstanding mortgage balance including interest or by a new valuation which can be requested by either party but you will need to cover the costs for this.
What risk is there for my guarantor?
The guarantee will be called upon to cover a shortfall in repayment of the mortgage from the net proceeds following the sale of the property. The amount payable by the guarantor cannot exceed the value of the guarantee.
What are the benefits to the Guarantor?
The guarantor is able to help out a relative without putting their savings directly into the property, and will receive a return on their deposit. The Secure Account also keeps the funds separate and easily identifiable.
Why choose No1 CopperPot?
If you are from one of our 26 payroll forces you can make your repayments direct from your salary, if not you can make payment by direct debit. The fixed rate for the life of the Mortgage means you will always know what your repayments are going to be, which means you can budget into the long term and there will be no nasty surprises if interest rates suddenly increase.
Can I cover my mortgage repayments for uncertainties such as accident and sickness?
You can obtain your own Payment Protection Insurance to cover your mortgage and this is widely available on the high street. CUNA Mutual also offer Income Protection which you can find out about here:
What if I want to make extra payments or repay early?
You can make extra payments towards your mortgage without penalty up to a maximum of 10% of the outstanding balance per annum and there are no penalties for doing this.
If you repay your mortgage completely within the first 5 years there is a redemption fee of 3% of the outstanding balance. After the mortgage has been running for five years there will be no fee for repaying the outstanding funds early.
What if I move house?
You can transfer your mortgage to a new property at any time subject to our normal lending criteria. We will not charge the early repayment fee but the loan rate will be amended to the rate prevailing at that time.
How do I apply?
To apply for one of our mortgages you can contact the office on 0845 130 1852 to request an application pack or go to our contact us pages for more ways to get in touch.
Your home may be repossessed if you fail to keep up repayments on a mortgage secured on it.
