MORTGAGES

General mortgage info

We have highlighted a few of the most important mortgage information here. If you would like more information please contact us and we can arrange a call with an adviser or we would be happy to send you a copy of our mortgage brochure.

A mortgage is a loan made by a bank or building society to enable you to buy a house or other type of property. The length of the mortgage will usually be anything up to 25 years for a standard repayment mortgage. The shorter the term, the more you will repay each month, but you will obviously pay off the mortgage more quickly. Interest-only mortgages can usually be anything up to 40 years. When you sign the mortgage agreement, you are agreeing to give the property as security for the loan.

The amount you borrow is referred to as the capital sum. The lender then charges you interest on the amount you have borrowed.

You pay back part of the mortgage capital and the monthly interest. At the outset, most of your monthly payment will be interest; later on, more of your monthly payment will be repaying the capital. At the end of your mortgage term, you will have paid off the entire loan plus the interest.

You only pay the interest outstanding on the loan every month, meaning that the capital sum remains the same throughout the term of the mortgage. These mortgages are not as widely available as they once were. Lenders will now only lend money in this way if the borrower can clearly demonstrate how they propose to repay the capital sum at the end of the mortgage term.

As the name suggests, this type of mortgage is a combination of a repayment and an interest-only mortgage as outlined above. With this type of mortgage, as with an interest-only mortgage, at the end of the mortgage term, some of the mortgage capital will still be owed and you will need to have a plan in place to repay it.

Choosing the right sort of mortgage to meet your needs and circumstances can seem a bit overwhelming. There are many different types to choose from, all meeting the needs of different types of borrowers. Your adviser will be able to help you by explaining what’s on offer, what the key features are, and what type of mortgage best meets your individual circumstances.

Here’s a selection of what’s available in the marketplace:

Fixed Rate Mortgage

The interest you pay remains the same for a set period of time, so your mortgage repayments will remain the same, even if rates rise.

Variable Rate Mortgage

As the name suggests, the rate applied can mortgage change at any time, meaning that your monthly repayments could do so too.

Standard variable Mortgage

The interest rate used here is the lender’s default rate, their standard variable rate (SVR). This can change at any time, meaning that your monthly repayments could go up and down.

Tracker Mortgage

A type of variable rate mortgage. Here the interest rate usually tracks the Bank of England base rate at a set margin above or below it, for the period of the deal.

Discount Mortgage

A type of variable rate mortgage where the interest rate is set at a discount below the lender’s SVR for a fixed period of time.

Capped-rate Mortgage

The rate you will be charged moves in line with the lender’s SVR, but the cap means that the rate won’t move above a certain level.

To assess how much you can borrow, lenders are now required to scrutinise borrowers’ incomes, outgoings and credit history closely and apply strict affordability criteria, ensuring that borrowers can comfortably afford their repayments now, and in the foreseeable future.

All lenders are bound by the same general principles and criteria to assess borrower affordability, but there are slight variations in the way they apply them. So it really pays to work with a mortgage adviser. Their knowledge of the market and understanding of the approach adopted by individual lenders means they can help you present your application in a positive light, to the right lender, saving you time and stress.

Having a large deposit really matters in the current market.

The more you can put down, the lower the interest rate you are likely to be offered.

While many lenders are prepared to lend purchasers up to 95% of the property price, with the borrower putting in the remaining 5% as a deposit, better deals and rates are available to those who can put down, say, 20% or even more.

If you’re thinking of remortgaging, and the equity in your property (the difference between the value of your property and the amount of mortgage you have left to repay) has increased, then you can use it as a larger deposit and secure a lower mortgage rate.

Lenders secure your mortgage against your property through a legal charge, so if you fall behind with payments and no other solution can be found, then the lender can repossess your home.

If you get into arrears or find it a strain to keep up with your monthly payments, you should seek advice as soon as possible. Your adviser may be able to find you a mortgage deal that is more affordable, perhaps with a lower interest rate or one that can be repaid over a longer period of time.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Moving home

Deciding to move home is an exciting time but it is also challenging which is why you need an exceptional service at your disposal. Whether you are moving down the road or across the country, we aim to assist you in making the financing of your new home as straight forward as possible.

Initially, its important to review your current mortgage situation and consider your future affordability. We can run through affordability, budgeting and the costs of moving.

If you have a current mortgage which is tied into a fixed rate, the good news is that most mortgages are portable, meaning you can transfer them from the property you originally borrowed against to the home to which you want to move.

We can help you find the best option for your circumstances.

Buying your first home

For your first experience on the property ladder we aim to make everything clear and concise. We will advise you on the options you have available depending on your deposit, salary and the type of property you are looking to purchase.

If you are not sure what your options are or have already offered on a property, feel free to give us a call to get some advice.

We have a usuful mortgage guide which we will be able to share with you and we will go through budgeting, costs of moving and other important factors you need to consider.

We will research 100’s of mortgages to find the right deal for you.

Re-mortgaging

Mortgages are long-term commitments but you don’t have to stick with the same product for the whole term of the loan. Normally, you would have initially selected a 2,3,5 or 10 year fixed rate. When this rate is within 3-6 months of expiry, we can review the market and give you advice on the most suitable options.

Some clients look to increase their mortgage balance when they remortgage, this is normally to assist with home improvements.

If you require an additional amount or a better rate mortgage on a property you already own, we can help by switching the mortgage on your home to another lender or negotiate a better deal with your existing one.

You may have to pay an early repayment charge to your existing lender if you remortgage before the end of your initial deal.

Buy To Let

Over the past few years, more and more people have taken to investing in buy to let property.

Whether you are looking to purchase your first investment property or whether you are looking to remortgage your existing property/portfolio we can help.

Rising property values and a booming lettings market has meant that many lenders have developed mortgage deals tailored to the needs of would-be landlords. For investors seeking rental yield or capital growth, property has proved a good investment at a time when returns on other types of asset have been comparatively low.

Currently lenders require deposits of around 25% for buy to let mortgages.

In today’s market where buy to let lenders have reduced significantly and the processes of finding a mortgage has become more difficult, it is more important than ever that you get expert advice from us.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET THE ORIGINAL AMOUNT INVESTED.

MOST FORMS OF BUY TO LET ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

Second/holiday home

We have a lot of experience in helping clients secure finance on holiday or second homes. The criteria around second homes and holiday homes is quite complex and does vary depending on your specific circumstances.  Contact us to talk through your specific needs.