Your home may be re-possessed if you do not keep up repayments on your mortgage.
- How much can I borrow?
- How much will my monthly payments be?
- Do all mortgage lenders lend the same?
- I’m self employed can I still have a mortgage?
- I’ve only been self employed for a short time can I still have a mortgage?
- Can I have more than 1 mortgage?
- What fees are associated with a mortgage?
- What type of mortgages are best suited to me?
- Does the government offer any help?
- Why is it best to use a mortgage professional?
- Can I buy a house to rent out?
- What is an offset mortgage?
- What are the tax advantages?
- What is a fixed rate mortgage?
- What is a discounted rate mortgage?
- What is a tracker rate mortgage?
- What are early repayment charges?
- Are there such things as self certified mortgages?
- I would like to know the options for purchasing my council residence?
- What is the difference between a repayment and an interest only mortgage?
- Can I have an interest only mortgage?
How much can I borrow?
How much you can borrow will depend on your income and whether or not you have any other financial commitments, i.e. loans, credit cards, maintenance payments. It will also depend on how much deposit you have to put down as an initial down-payment on your property.
The maximum available in the market is around 5 times, income although sometimes slightly more can be achieved if other criteria is met. To find out exactly how much you can borrow, contact us today and we will advise you on your mortgage options.
How much will my monthly payments be?
Your mortgage payments 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
As an indication of cost you can use our mortgage calculator on the website, however for a precise figure please contact is and we will provide you with a full Key Facts Illustration detailing all the costs of the mortgage.
Do all mortgage lenders lend the same?
No, different lenders have different criteria’s for how much they are prepared to lend, some will take certain deductions into account whereas others won’t, this is one of the many reasons why it is important to source a mortgage professional so that we can source and locate the correct lender for you who will be prepared to lend you the monies required.
I’m self employed can I still have a mortgage?
Yes, all residential mortgages are available to the self employed, as a general rule lenders require sight of 2 years trading figures or SA302’s(Tax Returns) to confirm income and some lenders do restrict affordability. Self employed income for limited company directors is often worked out on a combination of Salary plus dividends, however there are lenders who use net profit to ascertain how much an individual can borrow.
I’ve only been self employed for a short time can I still have a mortgage?
The answer is yes, however this is dependent on certain things, can you provide 1 years accounts and is the self employed work in the same employment category as your previous employment, this is a tricky one because it does depend on the strength of other factors, if you have been self employed for a short period of time, speak to one of our advisors and they will highlight the lenders criteria and if a mortgage is a possibility at this stage.
Can I have more than 1 mortgage?
Yes, there are a number of options for 2nd mortgages, if the 2nd property is to be let out then a Buy to let mortgage can be sourced, you can also purchase for a holiday home, a dependent relative to live in or as a convenience stop for work. Apart from Buy to let mortgages, 2nd home mortgages are dependent on affordability and the ability to be able to run 2 homes within your income.
What fees are associated with a mortgage?
It depends on the lenders, and whether you are purchasing or remortgaging. With purchase applications the following fees are often associated:
- Valuation fee
- Legal fees
- Stamp duty
- Application fee
- Arrangement or Product fee
For more details of these fees please contact our advisors on 01625 573124 or visit our first time buyers section for a more detailed breakdown.
With remortgages, the valuation and legal fees are often covered by the lenders, and no stamp duty is payable. The only fees that usually apply are an application fee if applicable and an arrangement fee that can be added to the loan. Products can also be sourced without arrangement fees however they usually incur a higher rate of interest.
What type of mortgages are best suited to me?
With so many different mortgage products available it is difficult to select the correct one that applies to your individual circumstance, it is advisable to speak to one of our mortgage professionals where they can discuss your needs and preferences and make recommendations on mortgages that are individually suited to you.
Does the government offer any help?
Yes, the government are continually offering new incentives and schemes to help stimulate the property market, and help first time buyers and home movers get on or progress up the property ladder.
For full details of these schemes and for updates on the availability of government help, please contact our mortgage advisors on 01625 573124.
Why is it best to use a mortgage professional?
With so many different options available some suitable and some not, it is best to seek professional advice when searching for the correct mortgage, our mortgage advisors have experience in dealing with all lenders and can help save time by applying lenders criteria and using your own needs and preferences to select the correct mortgage for you.
Can I buy a house to rent out?
Yes, this is commonly known as a Buy to let mortgage, Buy to let mortgages are offered by a number of lenders, and in contrast to residential mortgages they are assessed as much on the property being purchased as they are on the person purchasing. Buy to let mortgages, often come with higher fees than residential mortgages, and therefore the need for professional advice when selecting a lender is paramount.
What is an offset mortgage?
An offset mortgage is a mortgage that has the ability to reduce the interest charged by offsetting a credit balance against the mortgage debt. For example, if the mortgage balance is £200,000 and the credit balance is £50,000, interest is only charged on the net balance of £150,000, Some lenders have a single account for all transactions, this is often referred to as a Current account mortgage, Other lenders have multiple accounts. As a minimum there is a mortgage account and a deposit account.
Often the lender allows multiple accounts for credit balances and sometimes for debit balances. These different accounts allow the borrowers to notionally split their money according to purpose whilst all accounts are offset each day against the mortgage debt.
What are the tax advantages?
Offset mortgages may have tax advantages for the borrower, since instead of earning interest on the credit balance (which may incur tax), the credit earns a reduction in the mortgage interest paid (which does not). For example, in the UK offset mortgages are often marketed as offering "tax efficient" savings.
Interest generated within deposit accounts for UK residents is deemed income and is taxed at source; the rate is at least 20%. This is of course on top of the fact that banks usually charge a higher rate of interest on loans than they pay on savings, adding a further benefit.
What is a fixed rate mortgage?
As its name suggests, a fixed rate may involve “fixing” the interest rate that you have to pay on your mortgage for a certain length of time. You may have to pay an Arrangement Fee to “reserve” this rate. However, once the mortgage has been set up, you have the certainty of knowing how much your monthly payments will be for the fixed rate term.
What is a discounted rate mortgage?
Sometimes to entice you through their doors, a Lender may offer you a discount off their Standard Variable Rate. However, this discount may only last for a certain term, after which the mortgage may revert back to their Standard Variable Rate. These mortgages can often be a risky selection, because if a lender decides to increase its own standard variable rate then the mortgage will increase in line with this increase.
What is a tracker rate mortgage?
As their name suggests tracker rates “track” the Bank of England’s base rate. Accordingly, your interest rate may rise or fall depending on what the Bank of England’s rate does. Unlike a fixed rate, tracker mortgages do not offer certainty. There is a risk that your payments may go up, but on the other hand they could go down too.
What are early repayment charges?
An early repayment charge (ERC’S) is a charge incurred if you repay a mortgage early (whether by selling the property or by remortgaging). If such charges apply, they are set out in the mortgage documents at the start of the product and may be expressed as a percentage of the loan outstanding at the time of the repayment.
Are there such things as self certified mortgages?
Not any more, some lenders use to allow clients to self certify there income and progress a mortgage through without confirmation of this income, however lenders deemed this approach risky and have since removed the option to self certify income.
I would like to know the options for purchasing my council residence?
You may be eligible to buy your council home if you are a secure tenant of either; a council, a non-charitable housing association, or a housing action trust.
Discounted purchase prices are usually offered to council tenants for their homes. So if you are a council tenant wanting to buy your home, the discount will depend upon how long you have lived there and is roughly in proportion to the number of years you have been paying rent.
To find out of you are eligible you will need to contact your council or housing trust and complete an application, should you be successful the council will issue you with your Right to buy papers or RTB forms, that a lender will require for such a purchase. Once you have received the right to buy your council property, you need to think about how much you would like to borrow and how much you can afford to borrow. Some borrowers like extra monies for home improvements. Most lenders will allow the client to borrow enough for the discounted purchase price and a set amount for home improvements subject to affordability.
What is the difference between a repayment and an interest only mortgage?
A repayment mortgage, is a form of repayment where each month the amount owing on your mortgage decreases. This form of repayment will ensure that your mortgage is fully repaid at the end of a set term assuming all payments are met. This type of mortgage incurs less interest that an interest only mortgage and is favoured by the lenders, but is more expensive on a monthly basis than an interest only mortgage.
An interest only mortgage, is where your mortgage balance remains the same throughout the term of the mortgage, and only the interest is paid on a month to month basis. Because the balance of the mortgage does not reduce your payments on an interest only mortgage are less however more interest is charged over all and at the end of the term the borrower will be required to either sell the property or repay the debt.
Can I have an interest only mortgage?
Interest only criteria is changing all the time and has got tougher in recent years, but it is still possible to have an interest only mortgage. Most lenders require you to have a repayment vehicle already in place and have at least 25% equity in the property, some lenders will allow you to use the sale of the mortgaged property for a repayment vehicle but may require you to have as much as 50% equity in the property.