Mortgage FAQs

A type of loan where you borrow money from a lender specifically to pay for a property. The loan is secured against your property, and you will need to make monthly payments to pay back the loan over the agreed term. 

The lender charges "interest" in return for lending you the money. 

If you can’t keep up with the scheduled repayments, the lender has the right to start repossession proceedings. 

Remortgaging involves replacing your current mortgage with a new one from a different lender. This option might be appealing if your existing mortgage deal has ended and you're looking for a more competitive rate. Additionally, if your financial situation has changed and you need to borrow more, remortgaging could be a solution. There are various reasons to remortgage, but it does not require moving to a new home.

This type of loan allows you to borrow money to buy a property to rent out as a landlord rather than to buy a property to live in yourself. 

The amount you can borrow generally depends on the expected rental income from the property.  Typically, a higher deposit is required for a buy to let mortgage."

Mortgage valuation

Your lender will require a mortgage valuation to be carried out. They’ll do this to check whether the property is worth what you’ve agreed to pay for it. Mortgage valuations are for the benefit of the lender - not you. If it’s a free valuation then you won’t get a copy of the report.

Property valuation survey

By comparison, a house survey is an inspection of a property’s condition conducted by a surveyor usually instructed by the property buyer. If you do want to pay for a more comprehensive survey then we’d suggest you wait until your lender has offered the mortgage before paying for a separate valuation. In other words, once you know your mortgage is offered BEFORE spending out on an extra valuation.

If you want a more comprehensive  survey

We’ve used Cosey Homes Chartered Surveyors and found them competitive on price and thorough in their approach to building surveys.

 For a free quote click the button below:

Fixed rate mortgage

The interest rate the lender agrees to give you remains the same throughout the mortgage deal. It doesn't matter what happens to interest rates duing that specified period your payments remain the same.

Pros

• Predictable monthly payments making budgeting easier
• Protection from interest rate increases.

Cons

• No benefit if interest rates fall
• Early repayment charges  (ERC) if you exit the deal early.

Considerations

Think carefully about the length of the fixed period to avoid early repayment charges.

Variable rate tracker mortgages

The interest on variable rate mortgages can fluctuate up and down in cost. The reason for this is often due to changes in the UK economy.  Tracker mortgages follow a specific economic indicator, usually the Bank of England's base rate.

Pros

• Potential to benefit from falling interest rates

Cons

• Uncertainty because if rates rise so will yours and your costs
• You are tied in for the initial period of the deal and if the base rate rises considerably, you could potentially be facing higher costs in the future.

Considerations

Be aware of the potential for rate changes and how they might impact your payments.

When your fixed rate mortgage is approaching its end, it's crucial to start searching for a new mortgage deal several months in advance. This proactive approach helps you avoid being automatically switched to your lender's standard variable rate (SVR), which is typically higher and can lead to increased monthly payments. 

Start looking early

Ideally begin exploring new mortgage options with your mortgage broker around 3-6 months before your current fixed rate mortgage ends. 

If you have 6 months remaining on your fixed rate mortgage and want to avoid paying an Early Repayment Charge (ERC) to switch rates now, you can secure a new deal 6 months in advance with most lenders. Most mortgage offers are valid for six months, allowing you to lock in a rate ahead of time. If rates decrease during this period, you can switch to a lower rate. Conversely, if rates increase, you'll have secured your rate and won't be affected by the rise. It works to your advantage either way.

Speak to a fee free mortgage broker

To find the best deal for your situation, consider consulting a mortgage broker who can compare options for you.

If you switch to a different mortgage or pay off some or all of your mortgage while you are still in the ERC period, you may have to pay a sum to your lender. In other words ERCs are fees that some lenders charge when a borrower pays off their loan before the agreed upon date date. 

ERCs may be charged when a borrower overpays their loan or switches to a new lender. Some mortgage products have no ERC period, or an allowance for over-payments. 

Speak to an adviser or broker for guidance on whether this will affect you.

A lender’s standard variable rate (SVR) is the rate you will go on to once any initial product rate ends. Lenders' SVRs are often expensive and they're almost ceratinly not the best rates available.

 Your mortgage broker can advise you on the best options as your product comes to an end.

A portable mortgage is a mortgage that can be transferred from one property to another. This is also known as porting a mortage. 

If you're getting help with the deposit  the lender will ask for proof the person gifting you money won't part own the home. 

A gifted deposit is a cash gift from a family memeber that's used to pay for a mortgage deposit. It's a non repayable gift, not a loan. 

Lenders might want to see any or all of the following:

• Last three months payslips
• Last three months bank statements
• Latest P60 tax form
• Proof of bonuses
• Last two years tax returns or accounts
• Proof of deposit (savings accounts statements)
• ID documents such as driving licence or passport
• Proof of address (utility bills / credit card statements) 

Conveyancing is the legal transfer of property from one owner to another. The conveyancing process starts when a buyer's offer on a property gets accepted by the seller. The legal process continues until the buyer get the property keys.

You'll need a solicitor or conveyancer to handle the legal side if you're taking out a mortgage.