Frequently Asked Questions

Buying your first property and choosing the right mortgage can be rather daunting, so contact us and we will advise you on the mortgage options available to you.

But in the meantime, we hope you find the following information useful.

The amount of mortgage you can get depends on your income.

Income multiples do vary and as a rough guide, a typical multiple is four times your income. This figure could be higher or lower depending upon your individual circumstances and different lenders’ criteria. Some lenders do not use income multiples at all and will lend based purely on affordability.

Once you add to this the amount that you can afford to pay as a deposit, you have the amount you can pay for your first property.

It is also worth remembering the possible additional costs on top of your deposit and mortgage that you may be expected to pay.

You normally pay stamp duty on increasing proportions of any property value.

There are different rules for first time buyers and other purchasers, so therefore you are advised to take advice from a Solicitor as to the exact levels of Stamp Duty that may be payable.

Plus you will have to pay for the valuation and survey of the property together with solicitor’s fees.

You may also have to pay an arrangement fee for the mortgage and in some cases a Higher Lending Charge may be payable.  The Higher Lending Charge acts like an insurance for the lender in the event of the property being repossessed and subsequently sold resulting in a shortfall of the outstanding balance of the mortgage.

Your mortgage repayments will depend on the following factors:

• the actual amount of the mortgage
• the interest rate applicable to the mortgage
• the term of the mortgage (years over which the mortgage will be repaid)
• whether the mortgage is a repayment or interest only mortgage

A Key Facts Illustration (KFI) detailing monthly repayments will be provided when it has been decided which type of product best suits your needs.

It is also worth bearing in mind that there could be additional costs involved that you will need to factor in when budgeting for your mortgage. Such as:

• Valuation Fee, which will be paid via the lender to an approved surveyor who has carried out an independent assessment of the value of the property you intend to buy
• Any Arrangement Fee, which is charged by your lender i.e. bank or building society, when arranging the mortgage.  This fee can either be paid up front or in some cases added on to the mortgage
• Solicitor’s Fees for carrying out the conveyancing work on your property
• Buildings Insurance

With the significant increase in house prices over the past few years, many home owners today would like to release some of the equity in their home by remortgaging. But where do you start?

The first step is to contact us and we can advise you on the best remortgaging options available.

We will work with you to check the terms of your existing mortgage. These will tell us if you are tied-in to your mortgage deal or if there are any early redemption charges applicable. You can then decide if it is worth switching to a different rate or stay put until the penalties have expired.

We will then talk you through the four types of deal on offer to ascertain which option will suit you best. These are:

• Fixed Rate Schemes – ideal for people who want certainty and who want to control how much they will be spending each month.
• Discounted Rates – offer a reduction off the standard variable rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
• Tracker Rate Schemes – normally these offers track the Bank of England Base Rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
• Offset Mortgage Schemes - a type of mortgage that involves combining a mortgage with one or more linked savings accounts. For example, a £250,000 mortgage with a linked £50,000 savings account effectively reduces the remaining mortgage to £200,000 and the appropriate interest accordingly. An alternative might be for the lender to still charge you the same amount of payment each month. In this situation the extra you are paying can only be used to reduce the capital balance of your mortgage. This effectively means that your mortgage will be repaid more quickly as you are paying off capital over a shorter period of time.

We will of course guide you through the whole remortgaging process, but for your information this is what will happen:

• An application form from your new lender will need to be completed, along with details of your income and proof of your identity.  Income verification will be required, such as payslips and P60 if you are employed or if you are self-employed, either Inland Revenue produced tax assessments or an accountant’s reference or accounts. Some lenders may also require bank statements and a mortgage statement from your current lender.
• Your new lender values your home.
• Subject to all the paperwork being satisfactory, the lender will issue a mortgage offer, which will contain the amount of the mortgage and the terms that they will offer you.
• Solicitors will need to be instructed at this point to arrange the legal documentation, leading through to the completion of the loan.

The whole process should take about a month to complete.

Once you have received a completion statement from your solicitor or new lender, the process has finished and your new mortgage is in place.

By remortgaging your home, you could reduce your monthly repayments by changing the lender and rate. But where do you start?

The first step is to contact us and we will advise you on the best remortgaging options available.

We will work with you to check the terms of your existing mortgage. These will tell us if you are tied-in to your mortgage deal or if there are any early redemption charges applicable. You can then decide if it is worth switching to a different rate or stay put until the penalties have expired.

We will then talk you through the four types of deal on offer to ascertain which option will suit you best. These are:

• Fixed Rate Schemes – ideal for people who want certainty and who want to control how much they will be spending each month.
• Discounted Rates – offer a reduction off the standard variable rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
• Tracker rate schemes – normally these offers track the Bank of England Base Rate for a set period. If rates fall, the rate you will pay will go down but if rates rise, so do your repayments.
• Offset mortgage schemes - a type of mortgage that involves combining a mortgage with one or more linked savings accounts. For example, a £250,000 mortgage with a linked £50,000 savings account effectively reduces the remaining mortgage to £200,000 and the appropriate interest accordingly. An alternative might be for the lender to still charge you the same amount of payment each month. In this situation the extra you are paying can only be used to reduce the capital balance of your mortgage. This effectively means that your mortgage will be repaid more quickly as you are paying off capital over a shorter period of time.

We will of course guide you through the whole remortgaging process, but for your information this is what will happen:

• An application form from your new lender will need to be completed, along with details of your income and proof of your identity.  Income verification will be required, such as payslips and P60 if you are employed or if you are self-employed, either Inland Revenue produced tax assessments or an accountant’s reference or accounts. Some lenders may also require bank statements and a mortgage statement from your current lender.
• Your new lender values your home.
• Subject to all the paperwork being satisfactory, the lender will issue a mortgage offer, which will contain the amount of the mortgage and the terms that they will offer you.
• Solicitors will need to be instructed at this point to arrange the legal documentation, leading through to the completion of the loan.

The whole process should take about a month to complete.

Once you have received a completion statement from your solicitor or new lender, the process has finished and your new mortgage is in place.

The time scales can vary considerably when applying for a mortgage and are dependent upon many factors, such as whether you are purchasing a new property or remortgaging.

If you are remortgaging this can take around a month but this does depend on how quickly your solicitor acts, which can delay the process.

There are specialist lenders who deal with borrowers that have had Mortgage Arrears; CCJ’s; Defaults; been Bankrupt; have Individual Voluntary Agreements (IVA’s) or have had homes repossessed.

So do contact us today and we will fully assess your financial circumstances and run through the mortgage options available to you.

Buy to Let has in recent years, become an increasingly popular mortgage option for those wishing to invest in residential rental property.

Like a standard mortgage, landlords have a choice between interest only and repayment mortgages. However a Buy to Let Mortgage differs in several important ways from standard mortgages.

A major difference is the criteria lenders apply when considering approving a loan. Buy to Let mortgage lenders base their decisions generally on whether or not to approve a loan on the likely rental income from the property.  Whilst the level of the applicants’ income is taken into consideration it is not as critical as with residential mortgages.

In order to secure finance, rental income is typically needed to be 125% of the notional mortgage interest rate. This notional mortgage interest rate can typically be set at between 5.00% and 6.00%. The level it is set at is individual to each lender and subject to what basis they wish to operate on.

To find out more about Buy to Let and the mortgages available to you, contact us today and we will work through the options available to you.

Not all Buy to Let mortgages are regulated by the Financial Conduct Authority.

There are many schemes offered by mortgage lenders from which you, as a prospective borrower can choose.

These can be divided into two broad methods of repayment:

Capital and Interest method:-
This commonly means that each month’s mortgage repayment comprises paying back a portion of the capital together with paying interest on the outstanding mortgage. As you repay more capital and provided interest rates do not increase, your mortgage repayment will remain the same but the ratio of capital and interest will change as the term progresses. Therefore by the end of the mortgage term, assuming all mortgage repayments are made, you have paid off the balance in full and you therefore own your property outright.

Interest only method:-
With an interest only mortgage the balance of your mortgage stays the same throughout the mortgage term. It is normal practice to put in place an investment programme with the objective of building up sufficient funds to pay off the mortgage at the end of the term. The investment return cannot be guaranteed so you take a risk that there may be an insufficient funds built up.

If you do choose an interest only mortgage you are responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.

Broadly speaking, there are four types of mortgage products available:

Fixed Rate:
This is a mortgage rate where the interest rate is agreed at the start of the mortgage and will not change during the term of the fixed rate. Therefore you know exactly how much your monthly repayment will be during the fixed rate period.

Discounted Rate:
A discounted rate mortgage offers you reduced repayments for a given term. This interest rate is discounted from the lender’s standard variable rate, for an agreed period from the start of the mortgage. What this means for you the borrower is that you are guaranteed to pay a set amount below the standard variable rate for the period of the discount. The standard rate can go up and down, but the discount amount remains fixed during the agreed period.

Tracker Rate:
This is a variable rate mortgage where the interest rate is linked directly to the Bank of England Base Rate. Any upward or downward movement in the Base Rate will result in your tracker mortgage repayments increasing or decreasing accordingly.

Capped Rate:
This is a type of loan where a maximum rate of interest is set at the start of the mortgage term. During the capped rate period the interest rate can fall below the capped rate but will never rise above it. What this means for you as the borrower, is that you know how high the mortgage repayments could rise but are guaranteed the rate will not go any higher, therefore making home loan budgeting easier.

This will depend on what type of mortgage product you have chosen:

Please refer to the ‘Mortgages’ section for more details.

A wide range of lenders provide right to buy mortgages so your first step should be to contact us today, and we will run through the mortgage options available to you.

In the meantime we thought you may find the following information on right to buy useful.

You may be eligible to buy your council home if you are a secure tenant of either: a London Borough Council; a district council; a non-charitable housing association; or a housing action trust.

Discounted rates are usually offered to council tenants for their homes. So if you are a council tenant wanting to buy your home, the rate you will pay will depend upon how long you have lived there. The amount of discount you will receive is roughly in proportion to the number of years you have been paying rent.

In a nutshell a mortgage is a type of loan used to buy a property. This loan is usually taken out with a lender, such as a bank or building society.