Mortgages FAQs

The level of mortgage you are able to borrow ultimately comes down to your affordability in terms of income vs expenditure. Each lender uses their own affordability assessment to calculate your borrowing limits, which can vary depending on your circumstances and lender criteria.

Interest rates have a direct correlation to the level of monthly payment. In simple terms; the higher the interest rate, the higher the monthly payment. The lower the interest rate, the lower the monthly payments.

It is possible to purchase a property with as little as a 5% deposit and up to any level that is affordable to you. It is important to note that the size of the deposit does impact on the loan to value you qualify for and in turn the interest bracket e.g. 95% mortgage will have the higher interest rates and sub 50% mortgages will have the lowest interest rates. The brackets tend to reduce in 5 or 10% increments.

Yes. Lenders use your credit history to determine if you are a reliable borrower and able to meet the repayments. It can be possible to obtain a mortgage with bad or adverse credit history, but each lender will set their own parameters on what can be accepted, it is not a blanket rule across the market.

A remortgage is effectively moving your mortgage from one lender to another lender, in order to secure a better interest rate, release equity from home, add/remove borrower etc. These changes can also be made with your current lender, therefore it is important to review all options available to you before making that switch.

An offset mortgage allows you to link your savings to your mortgage and ‘offset’ this against your mortgage, to reduce the mortgage balance incurring interest, and thus reduce the monthly payment due. The mortgage is flexible, with it possible to access the funds as and when required.

At the end of your fixed deal with the lender, you will automatically move to the lenders’ Standard Variable interest rate, which is typically higher than your fixed rate and can be avoided with good planning in advance.

When purchasing a property, there are several upfront costs to be aware of, including:
o Stamp Duty
o Solicitor/Conveyancing costs
o Fees incurred when selling (estate agent fees)
o Broker fees (if using a broker)
o Lender fees e.g. product fee, administration fee
o Survey/valuation fees
o Moving costs
o Furnishings

The monthly payment will be dependent on a combination of factors: size of mortgage, term, interest rate and repayment type.

Yes, parental gifts are accepted as a source of deposit. Parents will need to provide a gifted deposit letter confirming the gift details to meet the lender & solicitor requirements.

There are typically two types of interest rates available: Fixed or variable. With a fixed interest rate, the rate stays the same for a set period of time, usually between 2-10 years. A variable rate differs in that the interest rate can change depending on market conditions, these can come in various forms e.g. tracker, discounted standard variable etc. The best one to suit you will come down to individual circumstances.

Payable within 14 days of a property purchase, although this is usually paid as part of the completion process.

An early repayment charge is penalty paid to your lender if repaying the mortgage whilst tied to a mortgage product and existing the deal early. It can also be incurred if you are overpaying more than the allowable overpayment limits.

The mortgage term will be catered to your individual circumstances and will be guided by your age and monthly budget. The maximum term allowed is generally 35-40 years.

Yes, a solicitor is required for a property purchase/sale and remortgage.

Capital repayment, interest only or part and part:
o Capital repayment: You are repaying the capital borrowed and interest together, the mortgage will be cleared at the end of the term.
o Interest only: You are only paying the interest, the capital borrowed will be owed at the end of the mortgage term.
o Part and part: a combination of the two types.

The application process typically takes 4-6 weeks from point of application to having a mortgage offer in place.

This providers confirmation from the lender on how much you are able to borrow, based on you income, expenditure and credit profile. This is not a guarantee and is subject to full underwriting assessment.

Yes. You will typically need 2 years self-employed history to qualify.

Employed:
o 1-3 months payslips
o 1-3 months bank statements
Self-employed: (link to self-employed page)
o 2 years full accounts and/or
o 2 years HMRC Tax Calculation & Tax Year Overviews
o 1-3 months bank statements
*in some instances, lenders may request further evidence to prove more complex income sources.

Each lender set their own lending criteria, therefore you may not qualify with one lender but do with another. It is important to review the whole of the market to ensure you are applying to the most appropriate lender.

The minimum age to qualify for a mortgage is 18, the oldest is typically 70 – although this can vary depending on the lender.

Although not a legal requirement, it is encouraged you have an up to date Will in place, to settle your affairs upon death.

Yes, you will need buildings insurance at point of exchange. It is also encouraged you have contents insurance and a life insurance.