Keyfacts documents explaining your mortgage

Money Advice Service

When you apply for a mortgage you will be provided with information about a firm’s service. You must also be provided with some form of a mortgage illustration document(s) at the point where a product is recommended or chosen. Alternatively you can ask for it at any time. When the lender finally agrees to lend the money to you (after they have carried out all the necessary checks), they will send you a Mortgage Offer. This guide explains why it’s important that you understand the information and documents you will receive and how i can help you get a better mortgage deal

Key messages about the mortgage service

Ask your lender or adviser to explain their mortgage service on your first meeting or when you contact them and ask for it in writing.

The ‘key messages about the mortgage service’ must be explained to you when you talk to your lender or mortgage adviser.

It has to cover:

  • Whose mortgages you are being offered – for example a lender will generally only offer their own mortgages whereas a broker might arrange mortgages from across the whole market. They must make it clear to you if there are any limitations in the range of mortgage products they provide. You need to know how much of a choice you’ll have.
  • How much you will need to pay for the service. This might be nothing, a flat fee, or a percentage of the mortgage amount, or both. You should also be told if an adviser gets paid commission.
  • If the mortgage details are being provided on an information-only basis and you’re making a decision on your own also known as “execution only”, this should be made clear to you. Brokers and financial advisers have to offer advice.

This information must be provided clearly and prominently, as part of the initial conversation (in the case of a meeting or telephone conversation) or on screen (in the case of internet sales) or in a document (in the case of a postal application).

Double check whether you’re getting advice

You will receive advice on most mortgage sales. However there will be exceptions.

For instance, you might reject the advice you’ve been given, or want to go ahead based on information you’ve gathered on your own online or by post.

This is known as an execution-only sale and the lender will write to you making it clear you have not taken advice and it hasn’t assessed the suitability of the mortgage for you.

Having advice from a qualified expert offers you extra protection.

If the mortgage turns out to have been unsuitable you can complain to the Financial Ombudsman Service.

You might lose this right if you choose an execution only sale.

As a general rule, an execution-only sale is where there has been no dialogue between you and the firm during the sale though there are exceptions if you’re simply asking for more details about your chosen mortgage.

You can find out more about your rights if you get poor advice in our guide below.

Do you need to pay for mortgage advice?

You don’t necessarily need to pay an upfront fee for mortgage advice as some mortgage brokers offer a fee-free service.

Instead of getting paid by the mortgage borrower, they take a commission from the lender.

Follow the link below to find out more about the different types of service offered.

Mortgage illustration document

When a lender or an adviser recommends a mortgage, or when a lender gives a mortgage offer, they have to give you a mortgage illustration document which is tailored to your mortgage needs and explains:

  • Your monthly repayments
  • Any fees or charges you have to pay upfront to get the mortgage
  • The overall cost of the mortgage, including interest, over the full term
  • The rate of interest or Annual Percentage Rate of Charge (APRC) and the type of interest (i.e. fixed or variable)
  • What happens if interest rates rise and how this affects your repayments
  • If there are any special features of the mortgage, such as the ability to overpay or underpay
  • If you can make overpayments to the mortgage and any penalties for doing so
  • What happens if you don’t want the mortgage any more, and
  • The length of the reflection period (i.e. at least 7 days, or more depending on the lender).

This document is usually known as the keyfacts Illustration (KFI).

By 2019, the European Standard Information Sheet (ESIS) will replace the current KFI.

The ESIS document is similar to the KFI but will have more detail about the mortgage and the terms they’re offering you.

Some mortgage advisers and lenders might give you the ESIS when they recommend a mortgage or make a mortgage offer.

While others might continue to give you an enhanced version of the existing KFI document with supplements of any additional information as needed until then.

You will also get this document even if you decide to go with an execution only sale.

How the keyfacts Illustration can help you

The keyfacts Illustration document or the ESIS if that is given to you instead, makes it easy for you to compare the total cost of mortgages side by side because the documents contain the same information, usually presented in the same way.

For example, you can quickly compare monthly repayments, and what happens at the end of any introductory deal.

Of course, you should also read the mortgage offer small print before signing up to any mortgage deal.

Don’t be caught out by charges you weren’t aware of.

Read our guide below to understand more about the different fees and charges that you need to compare.

This article is provided by the Money Advice Service.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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