Frequently Asked Questions
Where to start with your mortgage
Mortgage rates are not expected to drop due to the current economic climate. It is more than likely that interest rates will increase over time, but with the current uncertainty it is very difficult to say what will happen. Speak to your mortgage adviser so that you can make sure you are getting the best and right advice for your needs.
Depending on the type of mortgage product you take out, the mortgage insurance can increase along side this.
It is possible to extend a Mortgage Offer. This is done by speaking to your mortgage broker, who can then liaise with the lender to request an extension for you. A valid reason may be required to extend the Mortgage Offer. If this is not possible, it would require a new affordability assessment and accepting a new Mortgage Offer.
Interest rates on mortgage repayments are calculated daily. They are then deducted from the monthly repayments to determine the payment you will make.
require a new affordability assessment and accepting a new Mortgage Offer.
- Mortgage payments can increase. If you’re on a variable rate or a tracker rate, or the Bank of England base rate goes up, then potentially your monthly repayments would increase as a result.
No, unfortunately when it comes to Mortgage Rates, they are non-negotiable and dependent on the lender.
No, you cannot make your mortgage payments by credit card.
Understanding How Mortgages work
Mortgage rates are based on the type of product that you’ve taken out, these are set by the lender and your mortgage broker will explain this to you. If it’s a fixed rate mortgage, the interest rate will be fixed for a certain length of time, meaning your monthly repayments will never change. If it’s a tracker rate Mortgage you’ve taken out, your rate will follow the Bank of England base rates. If the base rate goes up, your tracker rate repayment amounts will go up. If the base rate were to go down, your tracker rate repayment amounts will go down.
When you take out your original mortgage product with the lender. After a certain length of time it will come off that mortgage product, and go on to the lender’s variable rate. This is often quite a lot higher than the initial mortgage you’ve taken out. The idea of a remortgage is for the broker to search the whole market and get you a new deal. This could either be with a new lender, or with the existing lender, depending on what product is best for your needs.
By sitting down with a mortgage broker. You’ll be able to go through an affordability assessment to find out how much you could borrow. They will explain the process to you, what documentation you will need, and give you the best advice on your mortgage requirements.
- That will be recommended to you by your mortgage adviser based on their assessment. Protection will vary in each individual circumstance and it’s important to make sure you are getting the best advice on this.
When it comes to considering getting a mortgage or renting, there are pros and cons to both. Buying and Renting comes down to the individual client’s circumstances.
If your mortgage payments are too high, the best thing to do is seek out advice from an Independent Mortgage Broker and get independent mortgage advice. They can guide you through the best and available options that you have.
Depending on the circumstances, it would be down to the lender’s discretion as to how a late payment is handled. If a payment is missed, this can then cause future problems with gaining a mortgage if it has affected your credit score.
If you’re buying a house, you’re going to need building insurance. This needs to be put in place before you exchange contracts. With regards to other forms of protection; such as life insurance or critical illness cover, we advise putting these in place before you receive the keys to your new property. By speaking with a mortgage advisor they can guide you on what will be best for your individual needs.
The Role of a Mortgage Adviser
A Mortgage Adviser is someone who is qualified to give you advice on Mortgages.
Yes, Mortgage Advisers are regulated by the FCA (Financial Conduct Authority). The FCA is a financial regulatory body in the United Kingdom.
The purpose of using a Mortgage Adviser is to make sure you’re getting the best advice possible with regards to taking out a mortgage. Their goal is to advise you throughout the mortgage process to give you the best suitable advice for your needs. They also take the pressure out of you having to do it, as they will be able to research the market and make the process as smooth as possible for you.
The duties of a Mortgage Adviser are to make sure they understand their client’s needs. This is to make sure they can make an appropriate recommendation when it comes to their Mortgage to give the client the best and most suitable advice.
The best thing to do is sit down with an independent mortgage broker. They can explain how affordability works, the process and what documentation will be expected of you. They can also go through an affordability assessment with you and give you the documentation and information you need to start.
APR stands for Annual Percentage Rate, which is the amount charged per year for the amount borrowed, including any fees.
If you are in arrears with your mortgage, it means you have missed at least one payment. Continually falling into arrears can put you at risk of losing your home. You can also get arrears on personal loans and credit cards, as missing payments on this can also affect your credit report.
An arrangement fee is the cost of setting up your mortgage and it may include things such as booking application fees. This Is payable to the lender and will vary depending on the product that is offered. Most lenders have multiple products with and without arrangement fees, and depending on your individual circumstances will determine which product is best for you
Sometimes a mortgage deal sets an early repayment charge if you pay some or all of your mortgage off ahead of the end of your mortgage term, or if you transfer to another rate before the end of the product period. Speak to an adviser or broker for guidance on whether or not this will affect you.
An overpayment is any payment toward your mortgage that you make over the agreed amount. Generally, lenders allow up to 10% overpayments per year on your mortgage without resulting in Early Repayment Charges, even if you are tied into a deal. Overpaying can result in paying less interest overall and shortening the time it takes to clear the full mortgage sum. Speak to your mortgage adviser to make sure you understand this before taking action.
An interest-only mortgage allows the borrower to only pay the interest portion of the sum total borrowed. However, this means both that your mortgage balance doesn’t reduce and that you will not be building equity in the property
This type of mortgage allows borrowers to use their savings to ‘offset’ their mortgage debt. For example, if you have borrowed £100,000 through an offset mortgage and you have £30,000 in a dedicated savings account, you will only have to pay interest on £70,000 of the mortgage.
The mortgage term is the length of time in which you agree to pay off the mortgage. Generally, this is 25 years, but it can be longer or shorter than this.
A guarantor is a person – such as a parent – who legally agrees to make the mortgage payments if the borrower finds themselves unable or unwilling to meet repayments.
This is a fee that is occasionally charged by lenders if you borrow a particularly high percentage of the value of the house (usually 90% or higher). These fees are less common than they once were.
The LTV, usually expressed as a percentage, is the proportion of the property price that you borrow when you get a mortgage. If, for example, the property is valued at £100,000 and you borrow £80,000, this is an LTV of 80%.