Frequently Asked Questions

WHAT IS A MORTGAGE?

A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer. The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.

WHAT CAN WE HELP YOU WITH?

Purchase - Buying your first home, or purchasing another property if you already own one or want to move to another property.
Remortgage - Swapping the mortgage you have on your current property for another mortgage with a different lender. You may consider this option if your existing mortgage deal is due up soon and you wanted to see if a more competitive deal was available. You could also consider this if your circumstances have changed and you want to borrow more.
Rate Switch - Effectively switching to a (better or new) rate with your existing lender.
Help To Buy - A government scheme which can help first time buyers get a property with just a 5% deposit. The Help To Buy scheme offers an equity loan where the government lends first time buyers or existing homeowners money to buy a newly-built home (up to 20% of the sale price) and you can borrow the rest (up to 75%) from a mortgage lender, on a repayment basis. You can’t use the scheme to buy a second home or a property to rent out. - See 'REPAYMENT' below for more info on a repayment basis.
Buy To Let - Buying property to rent out. You can get a buy-to-let mortgage if you want to invest in houses/flats and can afford to take the risk. The maximum you can borrow is linked to the amount of rental income you expect to receive. Lenders typically need the rental income to be 25–30% higher than your mortgage payment. Most buy-to-let's are interest only. - See 'INTEREST ONLY' below for more info on an interest only basis.
Right To Buy - If you are a council house or housing association tenant, you might be able to buy your home for less than its market rate. You can apply if:
You’ve been a council or public sector tenant for three years
The home you want to buy will be used as your main home
You don’t share rooms with other people – i.e. the property is self-contained
Your landlord is the council, a housing association, NHS trust or other public sector landlord
You can apply for Right to Buy with someone else who shares the tenancy with you; or with as many as three members of your family if you’ve lived together for at least the past 12 months
If the council sold your home to another public sector landlord while you were living there, you may still buy it under ‘Preserved Right to Buy'
You don't have the right to buy if:
If you’re under threat of eviction, are bankrupt or have large debts
If your home is reserved for the elderly or disabled
When there’s a shortage of housing
Let To Buy - Letting out your existing property & purchasing a new property to live in.
Further Advance - A further advance is taking on more borrowing from your current mortgage lender, which could be for example to fund home improvements or to raise a deposit for a second property, perhaps as a buy-to-let investment.

Repayment Mortgage?

A mortgage has two parts 1. Capital - the money you borrow 2. Interest - the charge made by the lender on the amount you owe. If you choose a repayment mortgage, you pay back the capital and the interest together. You’ll make monthly repayments for an agreed period of time (known as the term) until you’ve paid back both the capital and the interest.

Interest Only Mortgage?

With an interest-only mortgage, you initially only pay back the interest on a monthly basis and repay the capital at the end of the mortgage term.

Lenders will make sure you have a repayment strategy in place, so that you’ll have money to pay off the capital at the end of the mortgage. Lenders have different criteria, but a suitable repayment plan is likely to mean paying regularly into savings or investments and could include pensions and other properties. If you use an investment plan, it’s your responsibility to be sure it is on track to pay off the capital at the end of the mortgage, but your lender will also review the amount at least once during the mortgage term. If it’s not on track you will find it difficult to remortgage or switch to another lender.

Some lenders might ask for a larger deposit if you have an interest-only mortgage.

FIXED RATE MORTGAGES?

The interest rate you pay will stay the same throughout the length of the deal no matter what happens to interest rates. You’ll see them advertised as ‘two-year fix’ or ‘five-year fix’, for example, along with the interest rate charged for that period. Generally, after the term is up, you will revert to paying the lender’s standard variable rate.

VARIABLE RATE MORTGAGE?

When you take out a variable rate mortgage, you pay interest at what is known as the specific lender’s standard variable rate, or SVR. The SVR will fluctuate regularly, very broadly in line with inflation and with changes in the Bank of England’s base rate, but exactly how it does change is ultimately up to the lender.

WHAT IS AN EARLY REPAYMENT CHARGE?

When you take out a mortgage with an initial deal on a fixed or tracker basis, should you repay the mortgage in full or part before the deal ends, you usually will have to pay an Early Repayment Charge which, in most cases, is charged as a percentage of the loan. Some mortgages will offer a ‘portability’ option which means that if you move house when you are still tied into your deal, you can ‘port’ the mortgage to the new property and avoid the Early Repayment Charge.

WHAT IS AN AGREEMENT IN PRINCIPLE (AIP) OR DECISION IN PRINCIPLE (DIP)?

An AIP or DIP is a certificate or statement from a lender, to state that they will lend a certain amount based on your financial information.

WHAT PERSONAL INFORMATION MIGHT I NEED TO BRING TO MY APPOINTMENT?

Proof of identity - Valid photo ID e.g passport or driving licence
Last 3 months payslips OR If you’re self-employed - latest 2 years' tax assessment forms (SA302) or your HMRC self-assessment tax calculations and latest 2 years' HMRC tax overviews
Proof of any bonuses or commissions you might have received
Other benefits you receive e.g. child benefits
Details of existing outgoings and any credit commitments or debts you have or have had in the past e.g car finance, store cards, credit cards, hp etc... and the balance outstanding if any
If you're re-mortgaging - balance of your existing mortgage

WHAT IS YOUR PRIVACY POLICY?

Please see our PRIVACY POLICY located in our 'more' section.