Mortgage Guide

High Percentage Lending fee / Mortgage Indemnity Protection (MIP)

If your mortgage represents a high percentage of the price or valuation of your property (usually 80% or more) you may have to pay a ‘higher lending charge’. Some or all of this money may be used by the lender, at its discretion, to obtain mortgage indemnity insurance to act as extra security for its sole benefit. If this is the case, the lender will give you a written explanation, stating that:

• Such insurance will not protect you if your property is subsequently taken into possession and sold for less than the amount you owe.
• You will remain liable to pay all sums owing, including arrears, interest and your lender’s legal fees.
• If a claim is paid to your lender under such insurance, the insurers generally have a right to recover this amount from you.

Credit Reference Agencies

These are organisations, licensed under the Consumer Credit Act 1974, which hold information about individuals that is of relevance to lenders. Lenders may refer to these agencies for information that may assist them with making various decisions, for example whether or not to provide a mortgage loan. The enquiry they make may also be recorded on your file at a Credit Reference Agency. Details of the conduct of your account may be passed to a Credit Reference Agency by the lender if your repayments fall into arrears. They have a duty to advise you if this should occur.

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