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Regulated Mortgage Contracts explained and available mortgage solutions from Shire Direct!

Since 31st October 2004, the Financial Services Authority (FSA) has been responsible for the regulation of mortgage contracts. The definition as to what constitutes a Regulated Mortgage Contract is set out in the Financial Services and Markets Act 2000 (FSMA 2000).

Below we take a look at Regulated Mortgage Contracts and what exactly constitutes a Regulated Mortgage Contract. We also look at the types of Mortgage Contract that are presently excluded from mortgage regulation by the FSA. Finally, we provide details of how we can help with a Mortgage!

What is a Regulated Mortgage Contract!

Basically, a mortgage is a "Regulated Mortgage Contract" if:

  • The mortgage or loan is made to an individual or to trustees
  • The loan is secured by a first legal charge on land in the UK, and
  • At least 40% of the property must be occupied by the borrower or a member of their immediate family, or is intended for their occupation.

Additionally, the definition extends to other types of secured loans that satisfy the above conditions, for example:

  • Secured Bridging Loans

  • Equity Release Loans (sometimes called Regulated Lifetime Mortgage contracts). In this type of transaction, the capital and often the interest charged is not repayable until the property is sold, generally on the death of the borrower

  • Home Reversion Schemes: with these schemes, the homeowner actually transfers the ownership of the property to the scheme operator. In return they receive
    • a percentage of the property's value, which will depend on the age(s) of the seller(s), and

    • the right to live in the property rent-free, until the death or long-term care arrangements of the surviving partner.

  • Business Lending to sole traders and partnerships

  • Secured Overdrafts and Secured Credit Cards

What types of Mortgage Contracts are not regulated?

The following types of mortgage contract are specifically excluded from mortgage regulation by the Financial Services Authority, and these include:

  • Second Charges
  • Unsecured Loans
  • (Most) Buy-to-Let Mortgages
  • Loans to Limited Companies
  • Mortgages secured on overseas properties

Further Mortgage help available from Shire Direct

Well, we hope we've been able to explain what constitutes a Regulated Mortgage Contract and what doesn't. If you're looking for mortgage funding and feel we can help why not give us a call on Freephone 08000 282 281, our lines are open until 10pm everyday (including the weekends), or alternatively, why not enquire online at any time, we'd be only too happy to hear from you and help in any way we can.

Enquire Online now, or call us today 08000 282 281 - our freephone lines are open 8am-10pm everyday! We'd love to hear from you!

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.

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.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.

Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.