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The flexible 125% Mortgage scheme allows the borrower to borrow 125% of the purchase price of the property, so the borrower is able to take advantage of the extra funds by either spending on home improvements to improve the value of their home, or to consolidate existing credit commitments, and thereby reduce their monthly outgoings.
Here we delve deeper into the flexible 125% Mortgage scheme, how it works, and its potential uses together with the possible advantages and disadvantages. We also detail how Shire Direct can help with 125% mortgages!
Table of Contents:
The 125% Mortgage Scheme is an innovative mortgage scheme that allows the borrower to borrow 125% of the value of the property to be purchased.
Like most people these days, you probably lead a busy and complex life. This will often mean that what you are looking for in your mortgage is equally demanding.
Gone are the days of waiting for two weeks to see the local building society manager, only to be told that you might be granted a mortgage, but only when you'd saved up at least a ten percent deposit.
Nowadays, lenders must, and quite rightly so, gear their mortgage schemes for the benefit of the borrower. However, some lenders are more innovative than others of course, and it's our job to ensure that we come up with mortgage plans that meet the aspirations and needs of our customers.....
One of the most innovative Flexible Mortgage products in the market today offers a range of schemes that will provide a whole host of features primarily aimed at providing up to 25% over and above the property value!
This facility can have tremendous benefits for the borrower who may be buying a property for the first time, or moving, or simply remortgaging by switching lender. By providing an additional borrowing capacity at up 25% of the property value, the mortgage payer is provided, amongst other things, with the ability to carry out home improvements, and may be to improve the property valuation at the same time. The 125% Mortgage Scheme can also be used to incorporate all other credit commitments into one, and by doing so can reduce monthly outgoings.
As stated above, the 125% Mortgage Scheme plan permits the homebuyer to borrow up to a further 25% as a Cash Reserve over and above the property value, (subject to a maximum of £30,000). This additional element of the mortgage funding is provided as a Cash Reserve on an unsecured basis, but is charged at the same rate as the main mortgage, which is secured at a maximum of 95% of the value.
The following illustration shows how 125% LTV Mortgages could work for you! As a first time home buyer you see a property on which you agree a sale price of £100,000. You have decided that you would like to borrow an additional amount to carry out some modernisation to the property.
It's quite easy to calculate:
| Property Value: (£100,000 x 95%) |
£95,000 (Secured) |
|---|---|
| Unsecured Loan portion: (£100,000 x 30%) | £30,000 (Unsecured) |
| Therefore total borrowings: | £125,000 |
The following shows the calculation if the property value was £150,000:
| Property Value: (£150,000 x 95%) |
£142,500 (Secured) |
|---|---|
| Unsecured Loan portion: (£150,000 x 30% = £45,000 but maximum unsecured loan restricted to £30,000) | £30,000 (Unsecured) |
| Therefore total borrowings: | £172,500 |
In addition to the 25% Cash Reserve feature of the flexible 125% Mortgage scheme, there are a series of other features, and these include:
So it's a tremendously flexible mortgage product designed to let you take control, and one that adapts to your needs - from helping you on the property ladder, to extending your home, to moving to a bigger place, or simply switching your mortgage from another lender - and providing the cash when you need it!
Nevertheless, the 125% Mortgage Scheme is a very sophisticated and flexible product that if used sensibly, can be of tremendous benefit and flexibility to the discerning borrower.
So, if you require further information on how Shire Direct can assist you with a 125% Mortgage, simply get in touch, and we'll be delighted to provide you with more scheme details and how our Flexible 125% Mortgage Plan could be just the right scheme for you!
Call us today on Freephone 08000 282 281, our lines are open from 8am until 10pm, seven days a week, and we assure you of a warm welcome. Alternatively, why not enquire online at any time, it's simple to do, and takes very little time.
So, that concludes our look at 125% Mortgages, and how the 125% Mortgage scheme works, we hope you found it to be useful. Don't forget there is a wealth of mortgage related information throughout our website, so why not take a few minutes out to explore some of the possibilities that may be open to you, and don't forget we're only a free call or couple of mouse clicks away and would love to hear from you and help in any way we can!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
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