A mortgage is a long-term loan secured on your home. ‘Secured’ means that, if you don’t keep up the repayments, the lender can repossess your home and sell it in order to get its money back.
Most lenders will typically offer up to four times the main earner’s income, or slightly lower multiples of joint income. Other lenders will look at ‘affordability’, basing their lending decision more on your credit history/credit score and your net pay after your regular bills and commitments. This can sometimes mean you can borrow more, but remember that you must always be sure you can afford the monthly payments.
With every payment you make on a repayment mortgage (also called a ‘capital and interest’ mortgage) you will pay both interest on the mortgage and also pay off some of the capital. Provided you maintain all of your payments over the term of the mortgage, this type of mortgage is guaranteed to be paid off at the end of the term.With every payment to an interest-only mortgage, you pay only the interest. This means that at the end of the mortgage term you will still owe the full amount that you originally borrowed. You will need to have enough money at the end of the mortgage term to pay off the whole amount. This may be from regular savings (for example to a Building Society account, ISA or an endowment) or from investments (such as sale of a second investment property).
There is no guarantee with an interest-only mortgage that the value of your savings and investments will be sufficient to repay your mortgage and this is therefore considered a ‘higher risk’ mortgage.If you cannot pay off your mortgage at the end of the term, the lender can repossess your home and sell it to repay the debt.
Your credit file will list credit history details about you over the previous 6 years, such as mortgages, unsecured debt – credit cards, loans, car finance, overdrafts, mobile phone contracts and utility contracts, such as gas & electricity. In addition, your credit file will give details of your payment history for this credit agreements. The most widely used credit file checking agencies that lenders use are Equifax and Experian, although there are other agencies available. By allowing lender to view details on your credit file, they can build a profile of what you are generally like as a borrower and the level of your available credit
We can usually still help even if you have an adverse credit history. Impaired credit could be a result of many factors and consequently lenders tend to make their judgment based on the specific details for each case.
i. Variable rate – This is a rate where monthly payments will be determined by the lender’s standard variable rate (SVR) and will increase/decrease in line with this rate.ii. Fixed rate – This is a rate fixed at a set percentage for a set period of time.iii. Discounted rate – This is a rate is discounted from the lender’s usual standard variable rate (SVR) for set period of timeiv. Tracker – This is a variable rate linked to either the Bank of England base rate or LIBOR rate for set period of time or can be for the lifetime of the mortgage
Stamp Duty: (a kind of tax) which is currently payable at the following percentages:Up to £125,000 – no stamp duty to pay£125,001-£250,000 – 2%£250,001-£925,000 – 5%£925,001-£1.5 million – 10%Over £1.5 million – 12%So, if you were to purchase a house for £300,000, you would pay no stamp duty on the first £125,000, 2% on the next £125,000 and 5% on the final £50,000.This would be calculated as follows:£125,000 at 2% = £2,500 plus £50,000 at 5% = £2,500Total Stamp Duty bill would be £5,000Solicitor’s fees: which are also based on the purchase price, a quotation can be provided on request; a typical first time buyer will pay between £500.00 and £1,000Valuation fee: which is also based on the purchase price and varies from lender to lender and are sometimes free to First Time BuyersLenders arrangement fees: which can usually be added to the mortgage if required and average about £999.00Mortgage broker fee: We charge a flat rate of £299 which is below the average market charge of £499.
Lenders use various methods to assess your income for the calculation above. Often this will include asking for payslips, P60’s, self-employed accounts or bank statements as evidence of your income.
A fee of £299 is payable upon completion of your mortgage; we will also be paid commission by the lender.
We offer a fast conveyancing quotation service to get your purchase and/or sale moving as quickly as possible. We have access to over 200 solicitors around the country all individually rated by past clients. There is never a charge if your sale or purchase does not complete.
Some mortgages are portable – this means that if you move house, you can take your current mortgage to your new home (called ‘Porting’), often for little or no cost. The lender may require additional proof of income or credit status at the time of porting your mortgage, so if your circumstances have changed or you require a substantially different mortgage amount, you may no longer fit that lender’s criteria and a new lender may be your only option.
As your broker, we will do all the leg work for you and will organise the paperwork and submission process all the way through to settlement.
This varies on the purchase price of the property. Once you have established how much you can borrow your broker will be able to indicate how much is required for the deposit. It can be beneficial to discuss with a broker early on so you can then establish how much is required to save and you will know how long till you can purchase your first property.