Click on the question below to find the relevant answer. If you have a question that is not covered below please contact us and we will answer your query.
What is a mortgage?
What is a mortgage broker?
How much can I borrow?
What is a 'decision/agreement in principle'?
How do I prove my income?
What mortgage interest rate will I be charged?
What is a Fixed Rate Mortgage?
What is a Tracker?
What is a Capped Rate Mortgage?
Where's the best place to get a mortgage?
How do I know which is the best mortgage for me?
What happens at the end of the discounted, tracker or fixed rate period?
Why do the best mortgage deals vanish so quickly?
What is a flexible mortgage?
What is a buy to let mortgage?
Do I need a deposit for a mortgage?
Which mortgage scheme is best?
Do companies lend to 'Right to Buy' council tenants?
Can I get a mortgage if I have a county court judgment against me, if I've been declared bankrupt or if I've been in arrears?
How long can the term of the mortgage be?
Do lenders charge interest daily, monthly or annually?
What is the valuation?
What is a valuation fee?
What are the different kinds of survey?
What is Conveyancing?
What is credit scoring?
What is an intermediary?
Is it safe to transmit my mortgage application over the Internet?
Are there charges for paying off your mortgage early?
Can I make a capital repayment to my mortgage?
What happens if I can't afford to make my monthly mortgage payments?
What can I do to protect my monthly payments?
What is re-mortgaging?
I have a repayment mortgage. Can I change to an interest only mortgage?
I have an interest only mortgage. Can I change to a repayment mortgage?
I would like to pay off my mortgage but I'm not sure what to do with the deeds of my property. Can a lender help?
Can I have a further advance added to my mortgage for home improvements?
How does an endowment mortgage work?
I already have a mortgage with one lender and want to move house. What happens?
What are the additional costs in taking out a mortgage?
Must I clear my mortgage by a certain age?
What is a self-certification mortgage?
Do county court judgments (CCJ's) always disqualify me?
How do I repay capital with an interest only mortgage?
Do I always need insurance?
What happens if I lose my job?
What is a Higher Lending Charge (HLC) and will I have to pay it?
What is a mortgage?
A mortgage is a loan taken out usually from a bank or building society to fund the purchase of a property for residential use.
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What is a mortgage broker?
A mortgage broker is someone who arranges mortgages on behalf of clients dealing with lenders on the clients behalf . Following regulation of the mortgage industry by the Financial Services Authority in October 2004 all mortgage brokers must have the relevant qualifications and be authorised by the FSA to give advice.
With thousands of mortgage products available it's a good idea to consult a mortgage broker for help in finding the right product. They will listen to your particular circumstances and source the market to find the most suitable deal for you. Often they may have deals available that are exclusive to advisers and not available direct through the lender.
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How much can I borrow?
There are a number of factors which determine the amount of borrowing available to you. Each Lender has their own criteria as to how much they will allow you to borrow and the difference from one mortgage provider to another can often be significant as a lender who relies on traditional income multiples will not necessarily allow you to borrow as much as one that uses an affordability calculation. Other factors that will influence the lenders decision are the value of your property, your earnings, existing financial commitments and your employment status.
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How do I prove my income?
Employed – Copy of recent payslips & P60 if regular overtime / bonuses are paid.
Self Employed – Copies of last 2-3 years accounts and / or a letter from an accountant confirming you are solvent and actively trading. If full accounts are not prepared some lenders will accept an accountant’s projection.
Lenders criteria varies for proof of income and your broker will guide you as to what you will be required to produce.
Self Employed/No Proof of Income - The overall cost for comparison is 7.6% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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Where's the best place to get a mortgage?
The easiest way to find a mortgage is to consult a professional mortgage advisor who will ask you the appropriate questions and based on the information you give to him will show you illustrations of relevant products to your needs allowing you to assess the actual cost of borrowing.
An experienced mortgage broker or financial adviser can guide you through the many options and give you the best expert advice.
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How do I know which is the best mortgage for me?
Your mortgage broker should take the time to understand your particular financial circumstances and mortgage requirements, eg. Do you need the security of knowing how much your mortgage will cost each month; the method of repayment; the length of time you would like the mortgage to run etc. Once your needs and requirements are clearly identified your mortgage adviser will research the market and source the most suitable product to match your needs.
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What is a 'decision/agreement in principle'?
A 'decision/agreement in principle' is a conditional offer of a loan from a lender. The offer is generally based on information submitted electronically and is therefore subject to further underwriting when a full application is made.
If you are about to start house hunting or are looking to extend your current borrowing due to moving house a ‘decision/agreement in principle’ allows you to view property with the confidence that it is affordable to you.
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What mortgage interest rate will I be charged?
The rate you will pay is dependant on the product you take. All lenders have a standard variable rate but most will offer products at more competitive rates such as fixed rate mortgages, trackers and discounts. If you are taking a discount, tracker or fixed rate product, the lender will often offer a variety of rates dependant on the time you require the product for.
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What is a Fixed Rate Mortgage?
A fixed rate is guaranteed by the lender for a period of time eg 2, 3, 5 years etc. The fixed rate guarantees your mortgage payment will not change during the period of the fix allowing you to budget accordingly. At the end of the fixed rate the mortgage will revert usually to the lenders standard variable rate.
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What is a Tracker?
A tracker is a mortgage that runs in line with an external rate such as the Bank of England Base Rate. It may be loaded above or below the rate eg Bank of England Base Rate + 0.5% for a period of time. If the rate to which the product tracks should fall then likewise the monthly mortgage repayment will also decrease. Likewise should the rate be increased the mortgage payment will also increase.
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What is a Capped Rate Mortgage ?
A Capped Rate Mortgage is a variable rate mortgage that cannot go above a certain limit allowing the borrower the security of knowing that whilst their payment will not exceed a certain amount they can also take advantage of interest rates falling.
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What happens at the end of the discounted, tracker or fixed rate period?
Your rate will revert to the lenders Standard Variable Rate unless the product you have has any further features eg some fixed rate products may revert to a form of discount or tracker when the product term expires.
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Why do the best mortgage deals vanish so quickly?
When a lender offers a special mortgage such as a market leading fixed rate they have a certain amount of funds available on that product. With very attractive deals this first allocation may be taken up very quickly on a first come, first served basis.
Once funds have run out the lender returns to the money markets to source further funding, depending on the rates now available to the lender in the money markets will effect the decision whether to continue to offer the product or to amend the rate being offered.
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What is a flexible mortgage?
A flexible mortgage is one with a number of additional features compared to a standard mortgage. Generally these mortgages allow you the ability to vary your monthly payment, make overpayments without penalty, withdraw funds overpaid at some point in the future, and take payment holidays all without penalty . However it should be noted that one lenders flexible product may differ greatly from another’s as each sets their own criteria for the product.
This type of mortgage product is often most suitable for the self employed or people whose income varies dramatically due to bonus payments etc.
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What is a buy to let mortgage?
Buy to let mortgages are designed for those wanting to invest in property and finance the mortgage payments from rental income.
Buy to Let products are not regulated by the Financial Services Authority.
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Do I need a deposit for a mortgage?
Generally a minimum deposit of 5% will be required, although you may be able to get a lower rate if you have a larger deposit.
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Which mortgage scheme is best?
The best mortgage depends on your circumstances and requirements at the time of application. As these are likely to change over the life of your mortgage it is important to regularly review your mortgage usually as your current product comes to an end.
A mortgage broker will assess your needs and requirements at the time you apply for your mortgage. Based on your circumstances the broker will then find the most suitable product for you.
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Do companies lend to 'Right to Buy' council tenants?
Yes, some do - Generally 100 per cent of the discounted price is available with further funding for home improvements often available.
Right to Buy - The overall cost for comparison is 7.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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Can I get a mortgage if I have a county court judgment against me, if I've been declared bankrupt or if I've been in arrears?
It may be possible. There are a number of lenders who specialise in this area. Depending on the level of adverse credit in the past will affect the products available. As this is a specialist area it is important to take advice on such matters as often some lenders may be more sympathetic than others to a particular clients circumstances.
Bankrupts/IVA's - The overall cost for comparison is 9.3% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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How long can the term of the mortgage be?
Traditionally mortgages are written over 25 years although some lenders will allow the term to be stretched to 30 years or longer so long as the mortgage term ends prior to retirement. There are even a number of lenders who will allow the mortgage term to be written into retirement subject to there being sufficient projected income in retirement to fund the mortgage payments.
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Do lenders charge interest daily, monthly or annually?
This can vary from lender to lender. Daily interest products are often more competitive than those with annual interest charges although ultimately it depends on the rate being offered by the provider.
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What is the valuation?
The mortgage valuation is carried out on behalf of the lender to ascertain whether the property is determined to be suitable for lending. The mortgage valuation is purely for the lenders information and does not provide a comprehensive report about the property’s state and condition.
More in depth valuations are available in the form of a Homebuyers Report or Full Structural reports which give a detailed overview of the state and condition of a property identifying essential repairs and any areas of concern.
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What is a valuation fee?
This is the fee payable to the lender on application which allows them to instruct the mortgage valuation. Occasionally the lenders may offer products which include a free valuation fee.
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What are the different kinds of survey?
There are three types of valuation/survey available:
- Mortgage valuation
Paid for by the applicant provides a report to the lender on the suitability of the property for mortgage purposes has limited detail and is purely for the lenders use.
- Homebuyers Report
As above but also provides a report to the purchaser about the general state and condition of the property with recommendation for any further reports and or essential works to be carried out.
- Full Structural
Again provides the mortgage valuation to the lender and a more detailed and thorough report on the property to the applicant including information on the type of construction and as with the homebuyers identifying any areas of concern and essential repairs.
Depending on the property you are buying the level of survey required will vary eg a detached 18th Century cottage is more likely to have a full structural survey instructed on it by the purchaser than a recently built flat although it is ultimately the purchasers decision as to which level of survey they require although the minimum requirement is the mortgage valuation.
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What is Conveyancing?
Conveyancing is the legal work involved in buying and selling a property, often carried out by solicitors although there are now a large number of specialist Conveyancing firms also available to consumers. Both purchaser and vendor must have a solicitor for the transaction to take place. Your mortgage broker should be able to recommend a conveyancer to you.
Conveyancing Services are not regulated by the Financial Services Authority.
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What is credit scoring?
This is the method used by most lenders to ascertain whether they believe that you are suitable for the mortgage applied for. You can obtain your credit details held on file by one of the two main credit reference agencies, Experian and Equifax. See the links on this website.
Your credit score is affected by a number of different factors. Those of us who have a good track record with credit cards, loans and household bill payments will receive a high score; those who have perhaps missed payments in the past or had county court judgments registered against them will receive a lower score and may not meet the lenders criteria.
Equally those who have little or no credit history may also receive a low score and find it difficult to find a mortgage provider.
Whatever your credit score there is such a wide diversification of lenders and products in the mortgage market it should be possible to find a provider who will offer a mortgage to even those with the lowest score.
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What is an Intermediary?
An intermediary is someone who recommends lenders products to an individual to provide a mortgage . Intermediaries are usually mortgage brokers, but could be solicitors, estate agents or financial advisers who are connected with the housing market.
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Is it safe to transmit my mortgage application over the Internet?
Modern day technology allows you to submit your mortgage application online safely and securely. Security of your personal information is paramount to all lenders and huge investment in technology and security has been carried out by major mortgage providers to ensure their systems are safe to use.
If you are concerned about submitting your information online there are still many lenders who will accept a paper based application and we can happily accommodate such a request.
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Are there charges for paying off your mortgage early?
Dependant on the terms and conditions of your mortgage there may be early repayment charges for paying your mortgage off in full before the end of your products life you should be made aware of this at the outset of your mortgage along with any exit fees / deeds release fees which are commonly charged in todays mortgage market.
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Can I make a capital repayment to my mortgage?
Some of the products currently available will allow some form of overpayment during the products time period often up to 10% of the amount owed. However it is important to check with the lender prior to making any overpayments to ensure no early repayment charges occur. Flexible products may allow large sums to repaid at any time during the mortgage.
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What happens if I can't afford to make my monthly mortgage payments?
If you are experiencing financial difficulty you should contact your mortgage provider immediately to discuss your situation . The lender will probably be sympathetic to your situation and should offer a solution to ease the burden for a short period and then formulate a repayment program in order for any arrears to be cleared.
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What can I do to protect my monthly payments?
There are a number of policies available to protect your mortgage payment in the event of a sudden loss of income. You should talk to your advisor when arranging your mortgage to ensure you have the relevant levels of protection to ensure you do not lose your home in the event of unforeseen circumstances such as redundancy or long term illness.
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What is re-mortgaging?
Most people re-mortgage their property to either raise capital or simply because their current mortgage product is coming to an end.
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I have a repayment mortgage. Can I change to an interest only mortgage?
Some lenders will allow you to switch the repayment type at any time during the mortgage term although some will charge an administration fee for this service. You should check with the lender or your broker should you wish to switch your repayment method. It is important to understand the consequences of an interest only mortgage and your advisor will discuss this with you.
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I have an interest only mortgage. Can I change to a repayment mortgage?
Some lenders will allow you to switch the repayment type at any time during the mortgage term although some will charge an administration fee for this service. You should check with the lender or your broker should you wish to switch your repayment method.
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I would like to pay off my mortgage but I'm not sure what to do with the deeds of my property. Can a lender help?
Most mortgage providers will allow you to leave a nominal balance outstanding on your mortgage eg £1 and retain the deeds to the property, usually there is an annual fee for this service and this varies depending on the lender.
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Can I have a further advance added to my mortgage for home improvements?
Subject to meeting the lenders criteria some will allow further borrowing though this may be at a different rate to the rest of the loan.
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How does an endowment mortgage work?
An endowment mortgage consists of an interest only mortgage and an investment vehicle designed to repay the mortgage known as an endowment policy.
The policy invests in a variety of stocks and shares with the expectation that at a certain point in time the growth of the investment will be sufficient to repay the mortgage in its entirety. The policy also provides life insurance cover and should you die prior to end of the policy term the provider will repay the mortgage in its entirety regardless of the value of the investment fund.
Whilst these mortgages were common in the past recent poor performance of the investment policies have made them less attractive to consumers. If you wish to have an investment mortgage we would recommend that you take Independent Financial Advice regarding any investment you wish to make in order to repay the mortgage.
We are unable to advise you on investments.
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I already have a mortgage with one lender and want to move house. What happens?
Many mortgages are now portable – This means that you can transfer your mortgage from your existing property onto your new purchase. Should you require additional borrowing then the lender will need to assess your circumstances but as long as you meet their criteria then today this is a relatively straight forward process.
If your current mortgage is not portable then you will need to redeem this mortgage and take out a new product. There may be early repayment charges for redeeming your mortgage and your advisor will discuss all the possibilities available to you.
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What are the additional costs in taking out a mortgage?
There are a variety of costs involved in purchasing property some are avoidable some not depending on the mortgage applied for but the following should be considered :
- Valuation fee.
- Booking fee.
- Arrangement fee.
- Conveyancers fees to cover legal work carried out on your behalf.
- Disbursements - Legal costs to cover land registry fees and various searches.
- Stamp duty, a government tax on purchases over £120,000
- HLC (Higher Lending Charge), formerly known as MIG payable on loans normally over 90 per cent loan to value but can vary depending on the deal and lender.
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Must I clear my mortgage by a certain age?
General practice is that a mortgage should be repaid prior to normal retirement age. Should you wish to write your mortgage over a term that extends beyond normal retirement the lender will usually require evidence of how the mortgage will be paid in retirement eg projected pension income.
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What is a self-certification mortgage?
Self-certification mortgages are for those who are either self employed with limited accounts and for those who have difficulty proving all of their income.
Self Cert - The overall cost for comparison is 7.6% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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Do county court judgments (CCJ's) always disqualify me?
If you have CCJ's whether they have been satisfied or are still outstanding this may restrict the lenders who will provide you with a mortgage. Depending on the size and nature of the CCJ there are now many specialist lenders who are often sympathetic to these circumstances.
CCJ's/Adverse Credit - The overall cost for comparison is 9.3% APR. The actual available rate will depend upon your circumstances. Ask for a personalised illustration.
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How do I repay capital with an interest only mortgage?
There are a number of ways to repay capital with an interest only mortgage. Your monthly mortgage payment simply repays the interest accrued on the original loan each month. Should you have additional funds available capital overpayments can be made in line with the terms and conditions of your mortgage. Should you have an investment product linked to your mortgage on maturity of the product the proceeds can be transferred to the mortgage.
Do I always need insurance?
There are a variety of insurance policies available to protect your mortgage although few lenders will insist on anything other than buildings insurance being in place before advancing your mortgage.
It is important to consider the consequences of not having insurance and what alternative provision is in place in the event of such circumstances as a serious illness or even worse death during the term of the mortgage. Your broker should explain all the policies available to protect your mortgage and recommend the relevant schemes appropriate to your circumstances.
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What happens if I lose my job?
If you lose your job it is still your responsibility to make your mortgage payment. Failure to do so could result in your home being at risk of repossession by the lender. Insurance policies are available to provide you with an income should you be made redundant by your employer and these usually provide up to 12mths mortgage payments allowing you time to find alternative employment
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What is a Higher Lending Charge (HLC) and will I have to pay it?
A Higher Lending Charge (HLC) is a one off charge usually added to the mortgage by the lender for allowing the borrower funds in excess of 90% Loan To Value (LTV). Formerly known as MIG there are a number of lenders who will not charge this fee even at 100% loan to value although they may charge a higher interest rate than those that do.
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