The mortgage market can be exceedingly complex, offering a wide array of mortgage options. It is not merely a matter of seeking the lender with the lowest interest rate; while interest rates can serve as a critical starting point, it is essential to consider how these rates may fluctuate in the short, medium, and long term.
“YOU could lose your HOME or property IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE or any debt secured on it.”
We conduct a thorough review of key factors that could influence the actual cost to you. For instance, if a lender imposes an arrangement fee, a fee that is excessively high may render the overall cost of the mortgage less attractive compared to alternative options.
Exclusive mortgage options might help with:
- Mortgage valuations.
- Legal expenses.
- Provide cash-back to help pay for legal expenses and mortgage valuation fees.
- Possibly provide competitive mortgage options to help reduce your monthly payments.
“Exclusives offered by a specific mortgage network may not be AVAILABLE on all mortgage products from ALL mortgage lenders.”
First-time buyer mortgage
Embarking on the journey of homeownership as a first-time buyer can be a thrilling experience. Whether you are purchasing a property independently, alongside a partner, family members, or friends, it represents one of the most significant and financially impactful decisions you will ever make. In recent decades, a significant increase in property values has made it more challenging than ever to take the first step onto the property ladder.
There are various incentives available that may help reduce costs for first-time buyers. Many options can be accessed through mortgage brokers and may include support with mortgage valuation fees, legal expenses, mortgage application fees, and other competitive mortgage options.
See stamp duty costs by clicking here
Home mover mortgage
You will possibly consider a home mover mortgage if you need a bigger house, have to relocate or may be downsizing to a smaller property.
Home mover mortgages are the same as standard residential mortgages. It’s simply the process of applying for a new mortgage when moving into a new property. Your personal circumstances will be assessed by a mortgage adviser to ensure your new mortgage is suitable, remaining affordable whilst matching your current and future requirements.
“YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.”
Redemption fees to consider
Things you have to consider before redeeming your existing mortgage are redemption fees. If you decide to move to a new property whilst tied in with your existing lender on a specific rate for a certain period such as: two, three or five years. There may be redemption fees to pay. We can discuss these details during your application and see if these fees can be avoided.
Porting your mortgage
It might be possible to port your existing mortgage to a new property depending upon the terms of your existing mortgage. This can eliminate redemption penalties.
See stamp duty costs by clicking here
Remortgage
What is a remortgage?
A remortgage is when you change your mortgage deal by switching to a different lender on more competitive rates or suitable terms.
The reasons why people remortgage is simple.
- To reduce their monthly mortgage payments especially when their mortgage rate is due to increase when their 2 year, 3 year or 5 year tie in period comes to the end.
- Some people want to release the equity tied up in their property by borrowing more money secured against their property.
“You may have to pay an early repayment charge to your existing lender if you remortgage.”
“YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.”
Buy-to-let mortgage
You want to invest in property and become a landlord so require a buy-to-let mortgage.
Maybe you’re already a landlord and want to purchase another rental property. You might need to remortgage an existing rental property to raise money for your deposit on another property.
Possibly your a landlord and your mortgage deal has ended so you require a competitive mortgage deal to reduce your mortgage payments.
See stamp duty cost by clicking here
“Your property may be repossessed if you do not keep up repayments on your mortgage.”
“Not all Buy-to-Let Mortgages are regulated by the Financial Conduct AuthoritY.”
Let-to-buy mortgage
Allows you to borrow money to buy and move into a new home while your existing residence is let out to tenants (Which generates an income).
Second home
You need a mortgage to buy a home for holidays, a split job location or for other reasons like for your child to live in while in further education.
Guarantor
As a parent or close family member, you want to help someone else buy their own home by taking on some of the risk of the mortgage by acting as a guarantor. This usually requires offering your home or savings as security against the loan and agreeing to cover the mortgage payments if the homeowner misses a payment.
Buying property at auction
You want to buy a house at auction but you don’t have sufficient cash in the bank to purchase the property.
Commercial Property
Commercial loans related to purchasing, letting or refinancing commercial property .
Commercial loans are used to build property or refurbish properties.
Bridging loan
Bridging loans might be used to:
• Buy property at auction
• Refurbish property and sell
• Refurbish property and let
• Complete the urgent purchase of one property which would otherwise fall through.
“Commercial Mortgages AND Bridging Loans are referred to a Master Broker.”
“Commercial Mortgages And Bridging Loans are not regulated by the Financial Conduct Authority.”
Repaying your mortgage
Capital Repayment provides certainty that your mortgage will be repaid at the end of the mortgage term.
Interest Only means your monthly payment only covers your interest repayment. The amount borrowed at the start of the term will be outstanding at the end of the mortgage term.
Interest-only mortgages are most commonly used for buy-to-let property purchases but can be used for residential homeowner loans, subject to meeting lenders’ criteria.
Find more information on repaying your mortgage on the repayment vehicle page.
Mortgage deposit
The size of the deposit required is influenced by your credit history, affordability, age, purchase price, and other considerations.
When applying for a mortgage on owner-occupier properties, the deposit can be as low as 5% of the property valuation for first-time buyers with good credit history. In other cases, the mortgage deposit required can be 35% if applicants have adverse credit or when buying rental property. We need to understand your situation before determining the size of the deposit you will require.
Gifted deposit
A gifted deposit helps home buyers purchase property without using their own savings. Instead a small sum of money is gifted from the relative of the person or persons buying the property and the remaining balance is funded by a mortgage.
A gifted equity deposit can help purchase property by using a discount in the property’s value as your deposit. A percentage of the property value will be classified as your deposit.
A gifted cash deposit is a transfer of funds from the person gifting your deposit to your bank account. Typically and most commonly family gifted cash deposits are acceptable by lenders.
Family can gift a much larger deposit compared with gifted deposits paid by non-related persons, vendors and builders.
Vendor deposits and builder deposits of 5% are typically accepted by lenders when the person is not related.
Proof of deposit
The proof you are required to supply to evident the source of your mortgage deposit will depend on where the funds are coming from. For example, if personal savings are being used, most mortgage lenders ask you to submit 6 months of bank statements to confirm the build up of funds over time.
If the deposit is a gifted deposit either in equity or cash mortgage lenders would require a letter signed by the donor confirming:
– the funds are not repayable
– the amount being gifted
– the donor will not live in the property
– the donor will hold no interest in the property upon completion.
A vendors gifted deposit from a non family member or builder might be considered by various lenders.
Income
In order to obtain your mortgage approval, we have to verify all sources of income. As a broker, we understand that income can come from different sources. Some sources of income can be more difficult to understand than other sources of income. Additionally, some income types are may not be acceptable to some lenders but might be acceptable to other lenders.
- Employed with 3 months or more of wage slips
- Employed with 1 month’s wage slip
- Self-employed with 1 year’s accounts
- Self-employed with more than 2 years’ accounts
- Pension
- Rental income
- Fixed-term contract
- Zero-hour contract
- Benefits
- Maintenance income
- Dividends
- Working abroad
- All income types will be considered.
Maximum borrowing
How much can you borrow on residential mortgages?
Your borrowing limit is assessed using affordability criteria, which can vary between lenders.
Affordability and borrowing limits are calculated based on factors such as annual income and annual expenditure, combined with income multiples. Since income multiples differ among lenders, it is possible to obtain larger mortgages from one lender than another based on the same income and expenditure figures.
There is no single formula to determine the exact borrowing limits for all borrowers across all lenders.
Borrowing limits on residential homeowner mortgages are also subject to maximum loan-to-value (LTV) ratios. This means some individuals can borrow up to 95% of the property valuation, while others may only be able to borrow up to 70%. Consequently, borrowers will require a minimum deposit or equity amount ranging from 5% to 30%.
The maximum LTV and minimum deposit required can be influenced by the applicant’s credit profile. Typically, borrowers with a less-than-average credit history will need to provide a larger deposit.
How much can you borrow on buy-to-let mortgages?
Buy-to-let affordability and borrowing limits are calculated differently than those for homeowner mortgages. Assessing affordability for buy-to-let mortgages can involve a two-step process. Some lenders require borrowers to have a minimum combined annual income to be eligible for a buy-to-let mortgage, and this minimum income varies between lenders. Conversely, some lenders do not have a minimum income requirement.
Borrowing limits for buy-to-let mortgages are assessed based on the market rental valuation of the property. The property should be self-financing; if it is not, most lenders will not approve the requested amount. However, this does not mean that your application will be declined; it simply means that lenders may consider a smaller loan amount in line with market rental valuations.
During the affordability assessment for buy-to-let mortgages, lenders apply stress rates well above the interest rate being charged. This approach ensures that mortgages are approved with significant consideration for potential interest rate increases.
Borrowing limits on buy-to-let mortgages are also subject to maximum loan-to-value (LTV) ratios of around 80%. This means borrowers will require a minimum deposit or equity amount of 20% to be approved for a mortgage.
Age
Maximum and minimum age
Each lender sets its own criteria regarding the minimum age of applicants at the time of application and the maximum age of applicants at the end of the mortgage term. The minimum age is typically 18 years, while the maximum age at the end of the mortgage term can be 85 years.
Age limits for buy-to-let mortgages may differ from those for homeowner mortgages. If buy-to-let properties are self-financing, the maximum age of applicants at the end of the mortgage term may be higher.
Retirement
If applicants are considering extending their mortgage term into retirement age. Or if applicants are retired and want to apply for a mortgage based on retirement income. Providing applicants income is sufficient to support the mortgage payments. There won’t be any issues.
If applicants don’t have a pension plan or another income to show they can afford to pay the monthly mortgage payment. The maximum age of applicants at the end of the term is typically set between 66 years of age and 70 years of age. When employment comes to an end.
“Repaying your mortgage over a longer term increases the interest charged over the term of your mortgage.”
Credit history
The mortgage market is extremely diverse in lending criteria, as one size doesn’t fit all. Criteria from one lender cannot support the requirements of all clients. Our panel of lenders, representative of the whole of the market, has a variety of mortgage options available, creating more opportunities for approval on more competitive terms. We aim to support clients with:
– Perfect credit history
– Less-than-perfect credit history
– Missed payments on credit commitments
– Defaults
– CCJs
Other considerations
It’s important you’re aware of the different features applicable to the many different types of mortgages available on the market. Some of those key features you need to consider are:
Early repayment charges
If you wish to partially or fully repay your mortgage during its term.
Portability of the loan
If you move you may wish to keep your current mortgage.
Fixed rate
Would you benefit by fixing the interest rate with the lender for a set period?
Annual percentage rate (APR)
What is the real cost of borrowing, not just the interest rate charged?
Flexibility
The ability to overpay, take payment holidays, or switch repayment types
Frequency of interest additions
How often the lender calculates and adds interest to your loan, for example daily, monthly, or annually, can affect the cost of your borrowing.
Insurance is very similar
We will advise you so that if you ever need to make a claim you or your dependants will receive what you were expecting. This is why analysing and monitoring the enormous range of products is important. This ensures you get the best solution.
Other costs
Arranging any type of finance comes with fees and costs. Here are some examples that may apply, depending on whether you are buying a new property or remortgaging an existing one:
Stamp duty
This is a tax you pay when you buy a property based on the property’s value.
Legal fees
You will pay fees to your solicitor for doing the legal work associated with your purchase. This work is known as conveyancing.
Land registry
A fee for registering your ownership of a property.
Estate agent
Payable to your agent if you are selling through one. Typically this is a percentage of the final sale price.
Removal company
Fees vary depending on how far and how much you’re moving. You will typically pay 50% as a deposit and the rest on the day you move. It’s best to get several quotations before deciding which firm to use.
Mortgage valuation
This is for the lender’s benefit not yours. It satisfies them that the property is worth what you say it is.
Property valuation / survey
This is for your benefit and satisfies you that there are no issues with the property you’re buying. You may pay for a full structural survey or a less comprehensive homebuyer’s survey.
Mortgage lender’s arrangement fee
You pay this to the lender for arranging your mortgage, either up front or by adding it to your loan. Arrangement fees can vary significantly depending on the mortgage product you choose.
Early repayment charges
If you repay your mortgage in full, or in part but exceed the agreed partial repayment level, before the end of your mortgage term you can expect to pay a fee. This can range from a simple administration fee to significant early-redemption charges.
Higher lending charge
Where you are borrowing a high proportion of your property’s value your lender will insure itself against you defaulting and property values falling. The lender will usually pass this cost to you by adding it to the loan.