Applying for your mortgage. COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

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1 Applying for your mortgage COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

2 When you need finance to extend, refurbish, buy or purchase a share of practice premises, you want a lender who will make the process easy. A lender like us. We have over 30 years experience in providing mortgages to GPs and are the UK s leading supplier of surgery finance. We know that in the healthcare sector you need flexible solutions and we have the financial strength to be able to offer them. But we do more than simply provide loans we give you a dedicated point of contact to guide you through the process right up until completion. And just as importantly, we work with you and your team of professional advisers, project managers and contractors to help you realise your vision. To find out more about how we could help you, call us on or visit aviva.co.uk/commercialfinance Your loan We provide finance for refurbishments, extensions, refinancing or buying into a partnership. We offer fixed and variable interest rates you ll find the full details of our rates and associated fees on the following pages. We strongly recommend that you also seek advice and involvement from specialist professionals such as solicitors, accountants, project managers and IFAs. After completion Our involvement doesn t end when the deal is done. We have specialist teams who can help with any requests or queries you may have after completion, and we re always here if you want to alter your loan as your practice changes or develops. Simply let us know as soon as you are aware of any changes that are about to take place so we can advise you of our requirements. Insurance We re part of Aviva, the UK s largest insurance provider, which offers a wide range of insurance products such as buildings and contents insurance specifically for surgeries. You are not obliged to take out Aviva products as a condition of the loan. 1 COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

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4 What will your loan cost? Arrangement fee We charge an arrangement fee for processing your new loan. Please refer to the enclosed insert which gives a guide to our current fees. Please note that additional fees are payable if we are asked to make alterations to existing loans at the same time and they are not directly linked with the loan purpose. An insert is enclosed for you that gives you a guide to our current fees. Legal costs Applicants must instruct their own solicitor to handle the legal formalities for the application. Your solicitor will also be required to act on our behalf. The applicants will be responsible for all costs incurred. Please note that if your property is in Scotland or Northern Ireland, we will need to instruct an agent to deal with the legal documentation on our behalf and you will be responsible for paying their costs upfront. ^ää=ñééë=~êé=åçêêéåí=~í=íüé=íáãé=çñ=éêáåíáåö=äìí=~êé ëìäàéåí=íç=åü~åöék=té=êéëéêîé=íüé=êáöüí=íç=åü~êöé áååêé~ëéç=ñééë=áñ=~=íê~åë~åíáçå=ü~ë=åçí=äééå ÅçãéäÉíÉÇ=~í=íÜÉ=íáãÉ=çÑ=íÜÉ=ÑÉÉ=êÉîáëáçåK Valuation fee Where a property valuation is necessary, we will require the report to be prepared by one of our selected panel of surveyors. These firms have been chosen for their expertise in the medical sector and ability to undertake valuations throughout the UK. To help with your budgeting, their scale of fees is included in the enclosed insert, which also gives contact details for the firms and a guide to the range and cost of additional services they can provide. 3 COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

5 Your loan explained The notes below give you more information about your loan and will help you to complete your application form. 1. Loan purpose We provide loans to: Refurbish, improve or extend surgery premises Refinance your existing borrowings Purchase a share in surgery premises. 2. Lender/Mortgagee The lender/mortgagee will be Aviva Public Private Finance Limited. 5. Repayment methods The loan can be repaid using any one or a combination of the following methods. Interest only Capital and interest When comparing interest only and capital repayment loans you should take into account the cost of any contributions you may make into a savings plan or investment vehicle. Please note that when lending at a high loan to value we are likely to require part of the loan to be repaid on a capital and interest basis. 3. Loan amount Loans will normally be limited to 95% of the surgery valuation. 4. Term Generally terms between years can be considered. Your chosen term should not exceed your proposed retirement date which we assume to be aged 60. 4

6 6. Term insurance policy We do not usually insist on an appropriate term insurance policy being taken out. We would recommend that all applicants review their current life cover arrangements in conjunction with their mortgage(s) from us. 7. Payment All payments of mortgage interest and, where applicable, capital will be collected by Direct Debit from your nominated bank account. Collections can be made on a monthly or quarterly basis. 8. Interest rates and early repayment fees There are two interest rate choices available for your loan as detailed below. If you wish you can choose to have a combination of both options. Please note that you will not receive any advice or a recommendation from us, including about your choice of the interest rate options below. a) Fixed rate The interest rate will be fixed at a margin above the gross redemption yield on an appropriate government stock. The rate will remain fixed for the term of the loan and, should you wish to repay the loan prior to the end of the term, you should be aware that there may be an early repayment fee. Early repayment and fees An early repayment fee is required if you want to repay a fixed rate mortgage before the agreed date and where the reinvestment rate is less than the fixed rate on the loan. The reinvestment rate is the interest rate at which we could reinvest the monies in a similar mortgage on the day of redemption. This will be affected by interest rates available in the surgery mortgage market. As the reinvestment rate changes daily so will the early repayment fee. If the rate falls, the fee will rise and, conversely, if the rate rises the fee will fall. The actual early repayment fee is fixed at the time you wish to repay. Illustrative early repayment fee quotations can be provided upon request. Please note that if there is a significant reduction in interest rates the early repayment fee could be substantial. 5 COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

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8 Composite fixed interest rates A composite interest rate is calculated when you want to adjust the terms applied to an existing fixed rate loan. The composite fixed interest rate ensures that the present value of the mortgage remains the same before and after the alterations. The revised rate will remain fixed for the unexpired term of the loan. b) Variable rate We regularly review our variable rates. For current details please call Early repayment and fees Subject to us receiving at least 28 days notice of repayment, there is no early repayment fee payable on variable rate mortgages. We strongly recommend the above interest rate options are discussed with your accountant, solicitor and/or financial adviser to ensure that you fully understand the implications of the option you choose. Please take into account the basis of your reimbursement from the Primary Care Trust/Health Board when considering your interest rate options to ensure that you will still be able to meet the cost of payments if your income reduces or the variable interest rate increases. 9. Security We will require a legal charge over the freehold or long leasehold (with at least 35 years unexpired on the head lease at the end of the mortgage term) practice premises where at least 60% of the property is occupied for surgery use. Any mandatory life assurance will be charged as collateral security. 10. Instalments Where a loan is required to extend or refurbish your premises, money can be released in instalments on production of original appropriate architects certificates or other acceptable evidence of expenditure. 11. Roll-up of interest For refurbishments and extension cases, the interest due on the instalments released can be rolled up, subject to underwriting, and added to the total outstanding debt up to the time the premises are occupied or we receive the certificate of practical completion, whichever is earlier. The mortgage interest then becomes payable. The roll-up facility is subject to the surgery being completed within one year of the release of the first instalment, or such further period as may be considered appropriate. 7 COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

9 12. Partnership changes We recognise that changes in partnership can and do occur and that there is a need to adopt a flexible approach in order to accommodate them. It is, however, important that we are made aware of all partnership changes so that we can approve your proposals and discuss with you any appropriate restructuring of your loan. 13. Property insurance The property must be adequately insured for the duration of the loan. For properties not already in charge to us, loan monies cannot be released until we have seen confirmation of your insurance arrangements. It is the responsibility of the property owner(s) to ensure that the property remains adequately insured during the loan term. 14. Money Laundering Regulations We will need to verify your identity as part of your application. 8

10 It s easy to apply We ve made the application process as simple as possible. There are four stages involved. 1. Completing the application form The notes in the Your loan explained section will help you fill in the application form. Please send your completed application form to the GP Finance Team, Aviva Commercial Finance Limited, PO Box 21, Surrey Street, Norwich NR1 3NJ together with: Confirmation from the Primary Care Trust/Health Board of cost/notional rent reimbursement available Certified practice accounts for the last three accounting years For new projects, detailed plans, costs and specifications if available Details of any grants available, together with the terms and conditions attached 2. Underwriting your application Once we ve received your completed form and documents, we ll assess your case. Where applicable one of our panel surveyors will be instructed to provide us with a report on the property to confirm that it forms suitable security and comment on the value of the property. Please note you will be responsible for all fees in this respect. Once your application has been approved, a formal loan offer will be made subject to valuation (if applicable) and any appropriate conditions. 3. Accepting the offer Once we ve received your signed acceptance of our offer and your arrangement fee: You will instruct your solicitors to handle the legal formalities for the required applications. Your solicitor will also be required to act on our behalf. Please note you will be responsible for all costs incurred in this respect. 4. Legal process The first advance of monies can be made on completion of the legal work, subject to the loan conditions being satisfied. If applicable, subsequent instalments will be advanced on production of suitable evidence of expenditure (see note 10, Instalments ). Your account will continue to be administered by our team in Norwich, who will be happy to help you with any requests or enquiries that you may have. If you d like to discuss your particular needs further, please call us on or visit our website at aviva.co.uk/commercialfinance 9 COMMERCIAL PROPERTY FINANCE. PUBLIC PRIVATE FINANCE. dm=cfk^k`b

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12 Aviva Commercial Finance Limited PO Box 21, Surrey Street, Norwich NR1 3NJ DX Norwich (3) aviva.co.uk/commercialfinance Aviva Commercial Finance Limited. Registered in England No Aviva Public Private Finance Limited. Registered in England No All of which have the Registered Office 2 Rougier Street, York, YO90 1UU. AVI.010 Aviva plc