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FAQs

FAQs2022-08-31T14:39:01+00:00

Frequently Asked Questions

Frequently Asked Questions

First Time Buyer

What is protection insurance?2022-08-03T15:29:59+00:00

Protection insurance is a generic term typically used to describe insurance policies which provide cover for you and your loved ones in the event of your death or illness. Typical policies include life insurance, income protection and critical illness insurance.

What is a tracker mortgage?2022-08-02T09:29:23+00:00

A tracker mortgage is a type of variable rate mortgage which means the amount you pay could change each month.

A tracker mortgage “tracks” a base rate and in most cases this is usually the Bank of England’s base rate.

If decide to select a tracker mortgage as your preferred product, your mortgage repayments (including the interest you pay on your mortgage) could change every month.

Depending on the rate that is tracked, the change could mean the amount you pay could not only go up but go down also.

What is a fixed rate mortgage?2022-08-02T09:23:22+00:00

A “fixed-rate” mortgage is the term used to describe a loan that has a fixed interest rate for the entire term of the loan.

The mortgage therefore carries a constant interest rate from beginning to end. Fixed-rate mortgages are very popular products for those who want to know how much they will have to pay each month.

Do first time buyers have to pay stamp duty?2022-10-14T13:32:45+00:00

Stamp Duty Land Tax (SDLT) is a government tax that is charged when you buy a property in England or Northern Ireland.

The amount of stamp duty you pay depends on the price of the property and whether it is residential, non-residential or mixed use.

First Time Buyers are exempt from paying stamp duty for property purchases up to £300,000. If over £300,000 you will pay 5% up to £500,000 and then 10% up to 1.5m. If the property is over £1.5m then the rate increases to 12%.

Note these figures are subject to change, so please check the latest rules from: https://www.gov.uk/stamp-duty-land-tax

Is it harder to get a mortgage if self employed?2022-08-02T07:43:09+00:00

If you are self employed, the earnings from your business will be used to work out how much you can borrow. You’ll need to be able to provide a good track record of trading for 3 years or more to qualify with most lenders.

For sole traders and partnerships, mortgage lenders typically look at the net profit drawn down from the business to assess how much you can borrow.

For company directors, both salary and dividends are considered so it doesn’t matter if you pay yourself a low salary and received the rest of your income via dividends.

What is debt to income ratio?2022-08-02T07:45:31+00:00

In simple terms, money in vs money out. Take a look at what you earn, and what you spend. Reducing what you spend and increasing what you earn will improve your debt to income ratio.

This ratio is looked at by lenders and each will have their own percentage that they are comfortable lending on. If you think you are struggling here, you could improve this by reducing your outgoings or even taking on extra work.

This is often simpler than you might think. A few changes like eating out less or cancelling that gym membership you never use can make a difference. It all adds up.

How can I check if I have a bad credit rating?2022-08-02T08:01:13+00:00

There are many free online apps you can use to check your credit report. You can check and see where you stand and look to correct blemishes, by establishing a pattern of consistent payments.

Simply Google ‘check my credit rating’ to see many options.

Does my credit score affect my mortgage rate?2022-08-03T15:25:30+00:00

If you have a higher credit score, lenders will see you as a responsible, reliable borrower and be more likely to repay the debt. Usually, a higher score means you’re seen as lower risk the more chance you have of being accepted for a mortgage, and at better rates.

Can I get a mortgage with bad credit?2022-08-22T09:15:20+00:00

If you have a bad credit rating and existing debts, this wont rule you out of getting a mortgage, it may just mean you are higher risk, which may result in less options.

How much deposit do I need?2022-08-22T09:11:02+00:00

First time buyers can benefit from special deals where the minimum required deposit is lower. As a rough guide you should try to get at least 5% of the value of the home you intend to buy.

For example, if the property you seek to purchase is £200,000 then you should look to save at least £10,000 to go towards the deposit.

The higher your deposit, the better mortgage deals will become available so it may pay to save more and access these deals.

Buy To Let

Are mortgage interest rates set to increase further?2022-08-03T15:47:29+00:00

The Bank of England base rate is currently 1.25%. The base rate was increased from 1% to 1.25% on 16 June 2022 to try and control inflation. With further rises expected, mortgage borrowing could become increasingly expensive over the next year.

Is income Protection expensive?2022-08-03T15:41:11+00:00

Putting protection in a real-world context is the key to judging its true value. Upfront and accessible discussions can help you to understand the role protection can play in your personal and professional life.

For example, income protection can start from as little as £10 a month, about the same as a streaming subscription. Or, at less than £2.50 a week, this can be cheaper than one takeaway coffee.

Will house prices drop in 2022?2022-08-03T15:37:46+00:00

There is increased speculation that the housing market could crash in 2022 due to higher interest rates and increased cost of living as households try to afford rising energy and fuel costs.

The Bank of England has predicted that inflation in the UK will hit 10% by the end of 2022. Rightmove has projected house price growth to drop from its current level of 9.7% to 5% by the end of 2022. However, house prices have risen consistently, making it the longest steady price increase for six years.

How much could I borrow on a Buy-To-Let Mortgage?2022-03-31T11:48:56+00:00

Unlike a residential mortgage, where the amount you can borrow is based on your salary and your outgoings, a buy to let mortgage is assessed on the rental income that the property is likely to generate. Lenders will typically need the rental income to be at least 125% or 145% of the monthly mortgage payments, depending on your tax bracket (on an interest only basis).

What is the minimum deposit for Buy To Let (BTL) Mortgages?2022-08-22T09:19:23+00:00

The minimum deposit is typically 25% of the property’s value, although this can change between lender.

Buy to Let as a First Time buyer?2022-08-04T09:25:42+00:00

The simple answer is yes, but you may be limited when it comes to getting a mortgage. The first question to ask is, are you a first time landlord or a first time buyer? This is key as a large percentage of lenders need you to own your own residential property (possibly for at least six months) before they will offer you a buy to let mortgage. Some lenders just need you to own a property, so you could have another buy to let property but live in rented accommodation.

If however you are a complete first time buyer (or don’t currently own a property) then your mortgage options will be limited. An adviser will know the best lenders to speak to.

What is a house in multiple occupation (HMO)?2022-03-31T11:24:34+00:00

A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.

If you want to rent out your property as a house in multiple occupation in England or Wales you must contact your council to check if you need a licence.

You must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if all of the following apply:

  • It is rented to 5 or more people who form more than 1 household.
  • Some or all tenants share toilet, bathroom or kitchen facilities.
  • At least 1 tenant pays rent (or their employer pays it for them).

Moving Home

What is an affordability check?2022-10-14T10:39:06+00:00

An affordability assessment is the process which lenders complete to establish if you can afford to repay the loan repayments over the term of the loan.

Affordability assessments take your incomings and outgoings into consideration to help lenders assess whether you can afford to make repayments over the full length of a loan and if the loan is sustainable for you.

Any responsible lender will look at your financial situation to help determine if you can afford to pay back the money you’ve applied to borrow plus any interest and charges.

What is a mortgage Exit Fee?2022-03-31T11:43:23+00:00

When you pay off a mortgage (including when you re-mortgage to a new lender – as the new provider pays off the debt on the old deal) you normally pay an exit fee, depending on the lender, which is usually a few hundred pounds.

It might be called a deeds release fee or a final fee, but you may have already paid it upfront when you took out the mortgage, so do check.

Will I need to pay an early repayment charge on my mortgage?2022-03-31T11:35:20+00:00

If you’re still within your introductory offer period (for example, part way through a two-year fix) you will almost certainly have early repayment charges to pay.

These are usually 1-5% of the outstanding debt, depending on how long you have left of your intro deal. On a £200,000 outstanding debt for example, the early repayment charge will likely between £2,000 and £10,000.

What does porting a mortgage mean?2022-03-31T11:33:53+00:00

Many mortgages are ‘portable’, which means you may be able to transfer your current mortgage product to a new property.

Even if your mortgage is portable in theory though, you may still be blocked.

Porting is a great flexible feature but there are no guarantees your lender will actually permit you to do it – and you could end up borrowing at an uncompetitive rate to boot.

What happens to my existing mortgage when I move home?2022-08-04T11:48:02+00:00

Your existing mortgage is tied to your current home and therefore secured on your current property. When you move you typically pay off your current mortgage and start a new mortgage. There may be options to ‘port’ your mortgage however, more details here.

Porting is a great flexible feature but there are no guarantees your lender will actually permit you to do it – and you could end up borrowing at an uncompetitive rate to boot.

Remortgaging

How long does it take to remortgage?2022-03-31T15:44:17+00:00

The remortgage process typically takes 6 to 8 weeks depending on how complex the situation is.

The following gives you a simplified version of what happens.

  • Find the perfect mortgage.
  • Submit application to the mortgage lender.
  • All applicants credit history will be checked.
  • All required documents sent to the mortgage lender.
  • The mortgage lender will check the documents.
  • The mortgage lender checks the property.
  • Once the mortgage lender is happy, they will issue a mortgage offer.
  • It is time for the solicitor to complete the legal part of checking the property.
  • The solicitor will then pay off the current mortgage lender and everything is transferred to the new mortgage lender.
Can I borrow extra money on my mortgage to consolidate my credit cards and for home improvements?2022-03-08T12:04:13+00:00

Yes, you can borrow more money when you remortgage subject to a couple of things.

    1. The new loan does not exceed the maximum that your income will allow.
    2. There is enough equity left in the property to meet the lenders criteria. Equity is the term used to describe the amount of money left if the property was sold and the loan paid off, or your share of the property.

People borrow extra money for lots of different reasons, here are a few:

  • For home improvements, to add more space or an extra bedroom.
  • Pay off unsecured loans or credit cards. This can reduce your monthly outgoings.
  • Remortgage to raise extra money to pay off a partner or spouse as part of separation or divorce.
  • To raise money to buy another property.
  • Remortgage to borrow extra money to help your children with university or set up a new home.

For debt consolidation, your adviser may suggest a third party being present and will make you aware that adding unsecured debt to your mortgage will result in additional interest being paid over a longer period of time.

Will I be able to borrow more when I Remortgage?2022-03-08T12:00:31+00:00

If you are re-mortgaging your adviser will assess if you have any further needs. i.e.: capital raising, debt consolidation etc
If you require further borrowing, your adviser will assess your affordability and maximum lending

Can I make a lump sum payment off my mortgage?2022-03-08T11:58:08+00:00

Lenders will allow you to make a 10% overpayment per year of your outstanding balance, without incurring and early repayment charges. If you are already on the lenders SVR you can make a lump sum payment of your choice without any penalties.

Do I have to pay an Early Repayment Charge (ERC)?2022-08-02T07:39:47+00:00

Possibly, yes, if you are not careful. If you are re-mortgaging, check that your new deal does not kick in until the end of your current deal to avoid paying an ERC. If you are on your lender’s SVR, though, you will not pay an ERC to Remortgage.

Is a remortgage a full application?2022-08-04T11:49:58+00:00

Yes, if you are looking to change lenders due to better interest rates being available, this is a full affordability and criteria check. Your adviser will need full documentation from you and will need to assess affordability with lenders.

Large Mortgages

What are the benefits high net worth mortgages?2022-03-31T12:03:03+00:00

If you quality for a high net worth mortgage you become more attractive to lenders. This can mean you’ll typically get better interest rates, more products to chose from and better terms.

In addition, you may experience faster turnaround times and better attention from lenders throughout the process.

Do combined salaries count towards high net worth mortgages?2022-08-04T10:18:52+00:00

Combined salaries don’t count towards high net worth mortgages. So if you are applying with your partner, one of you individually needs to earn at least £300k per year.

What is high net worth mortgage?2022-03-22T14:45:36+00:00

A high net worth mortgage is a type of mortgage for individuals who have an annual net income of £300,000 or assets worth £3 million or more. People who meet this criteria aren’t always bound by the same lending regulations as other customers as mortgage lenders who specialise in high net worth agreements are often willing to offer much high loan amounts, income multiples and bespoke terms and conditions.

Equity Release

Is it a good idea to release equity from my property?2022-04-01T13:30:04+00:00

Equity release may be a viable option if you are looking to gain some extra cash in retirement. Common reasons you may be looking to release equity are to help with home improvements, pay for costs of care or pay off debts.

However, the release of equity from your property is not suitable for everyone and you should seek advise from an IFO in the first instance to make sure this is the best option for you.

Does my mortgage need to be paid off first?2022-03-31T12:15:04+00:00

A client doesn’t need to have fully paid off their mortgage and the money released can be taken in one lump sum, in several smaller amounts on which you’ll pay interest, or as a combination of both.

What is a Home Reversion Plan?2022-08-04T09:46:40+00:00

A home reversion plan sees you selling a stake in your property in return for a cash lump sum.

By selling a share of your property, you become a co-owner but continue to enjoy the right to live in it for the rest of your life.

You surrender a percentage of your property in exchange for a sum based on its current value, but the ultimate cost is based on its price at the end of the deal.

You can usually sell between 25% and 100% of your property to the provider, but the amount you get in return will be significantly less than that share you surrender.

Home reversion plans are far less common than lifetime mortgages these days.

What is a lifetime mortgage?2022-08-04T09:42:54+00:00

Unlike conventional mortgages, where interest is charged on an amount that decreases with time, interest on lifetime mortgages is charged on an increasing sum, so your debt can grow quickly.

This is because you don’t usually make any repayments, so the interest on the loan is therefore added to your debt on a continual basis.

Most lifetime mortgages have a fixed rate of interest. Some providers offer variable-rate lifetime mortgages, but these offer less certainty.

You’ll never have to repay more than the value of the property, however, as members of the Equity Release Council, a trade body for providers of the schemes, have guaranteed that people who take out the product won’t ever find themselves in this scenario with the ‘no negative equity guarantee’.

Customer Testimonials

What People Are Saying

Julie was our mortgage advisor when we purchased our first home two years ago and again when we re-mortgaged this year. Julie explained the process and helped us every step of the way always keeping us up to date. Julie is an extremely reliable, professional and friendly mortgage advisor. I would highly recommend her.

D Harper & E Gregory

Very professional and approachable. Organised my mortgage and set out all the options and information I needed to make an informed decision. Always at the end of the phone to answer my questions and nothing was too much trouble. I’d recommend Julie and will definitely be using her again. A sterling service provided.

J Traviss

Julie arranged and completed a mortgage for my partner and I. Being first time buyers we were quite clueless about the whole process, Julie made sure we fully understood every step which had to be taken. Julie was highly professional but also had a personal touch which made us feel very much at ease.

J Murphy & B Stansfield
You could lose your home if you don’t keep up your mortgage repayments
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