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MORTGAGE AND REMORTGAGE FAQS
Hopefully, these mortgage and remortgage frequently asked questions will help, but please note that the information on this page does not represent financial advice. You must consult an FCA registered mortgage adviser for complete information.
Which type of mortgage should I choose?You need to ensure you have the right type of product to suit your circumstances whether it be fixed rate mortgage or standard variable rate mortgage. Would you like the stability of knowing what your repayments will be by choosing a fixed rate mortgage or would you be happier taking the risk that interest rates will remain stable or come down by choosing something like a base-rate tracker mortgage? Your broker will help you decide which is the best for you.
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How Much Can I Borrow?Lenders will usually offer to lend you an amount based on your income and, if applicable, your partner's income. They'll take into consideration things like large outgoings (such as loan repayments) and the loan to value (LTV) percentage (see "What is LTV?" below). Mortgages up to the value of 95% of the property value may be available depending on circumstances. That said, very few people would qualify for 95% LTV.
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What if I have a poor credit history?Getting a mortgage with a poor credit history - often known as a sub-prime or adverse mortgage - in the current climate is very difficult. We will only be able to help you, if your credit history is reasonably good. You should always make sure you can afford the payments though - we will advise you on affordability.
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What do I have to consider before I change from an existing mortgage?There are things to consider before you change your mortgage: Do you have an early repayment charge? Your mortgage may have one, especially in the early years and if you're still in the period of a special deal mortgage, such as a fixed, discounted or cash back mortgage.
Remember, what looks like a cheap mortgage today may not prove to be so in the longer term. Ask your adviser what happens after any special deal ends.
Are there other charges and are the rates competitive? Your mortgage adviser will need to take everything into consideration if they are to advise you to change to a new mortgage.
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What happens after your mortgage comparison enquiry is received?Your qualified mortgage adviser receives your enquiry, checks the mortgage products that are currently available from a choice of providers and then contacts you with a range of quotes to suit your particular circumstances.
They use specialist, industry mortgage search software that will provide you with the information drawn from the whole of the UK mortgage market. This will help you make your decision which is the best mortgage for you and your situation.
Depending on the type of mortgage your require and your circumstances, they may be able to show you exclusive mortgage deals and financial products that aren't available to the general public.
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Is it right that there are only a handful of lenders?Many people believe that there are only a handful of mortgage lenders. Our mortgage advisers have easy access to a wide range of mortgages not only from the UK's best-known lenders, but many more of the lesser known lenders that offer competitive, and sometimes better, deals.
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Which mortgage lenders do you use?We draw mortgage comparisons from over 200 lenders including Lloyds, RBS, Barclays, CoOp, HSBC, NatWest, HBOS, Citi, Santander, all the major UK building societies as well as many specialist lenders.
If you have a preferred lender that you'd like specific comparisons for, please ask, it won't be a problem.
Other possible lenders:
Alliance And Leicester
Bank Of Scotland
Bath Building Society
Cambridge Building Society
Cheltenham And Gloucester Building Society
Cheshire Building Society
Coventry Building Society
Cumberland Building Society
Ecology Building Society
Heritage Building Society
Lambeth Building Society
Leeds Building Society
Marsden Building Society
Newcastle Building Society
Nottingham Building Society
Skipton Building Society
Teachers Building Society
Tipton Building Society
Yorkshire Building Society
and many more...
Why should I use an FCA registered professional mortgage adviser?You could save a lot of money, time and hassle. An FCA (Financial Conduct Authority) registered mortgage adviser can handle the paperwork, phone calls and bring reassurance.
It isn't always possible that the average person seeking a mortgage will have access to all the possibilities. Mortgage Advisers may know of many "hidden" deals. A Mortgage Adviser may also be in a better position to negotiate a more favourable deal than you may be able to. The keyfacts documents that your adviser will give you will help you compare products and services. This could save you lots of money over the period of your mortgage.
Advisers have access to a vast range of products and will already have varying types of relationships with the lenders, which could mean that if you hit barriers with your application, they may well be better placed than you to talk to the lender to help you overcome them. You will also have a point of contact should anything go wrong.
Your professional adviser will help you decide which is the best mortgage for you and also help reassure you that you have made the right decision.
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Why is FCA regulation a good thing?Reputable Financial Conduct Authority (FCA) Registered Mortgage Advisers will want to find out exactly what your circumstances are. You should expect your adviser to only recommend a suitable mortgage based on the information that you have given them.
They have got an interest in recommending the right mortgage for your circumstances as they'll not wish to fall foul of stringent FCA rules.
They work to a set of national guidelines laid down by the FCA who regulate brokers' policies and working methods. If you choose not to get FCA qualified adviser advice you may not be able to get compensation if, at a later date, the mortgage proves unsuitable.
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Do mortgage rates and products vary that much?We're sure that you compare prices when buying holidays, cars, TVs or whatever you're shopping for. We know that you look for the best deal by comparing many products and prices from different companies. But, did you know that many people don't bother to compare mortgage products and rates. This is a huge mistake!
Don't be happy with the first rate you find. You must compare rates, they vary a lot! If you're looking to save yourself money it's only sensible to shop around and compare information.
You mortgage adviser can help you make sure you have the right type of mortgage to suit your circumstances whether it be a discounted mortgage, flexible, interest only, self cert, offset, fixed rate, capped rate, standard variable rate, tracker or poor credit mortgage.
What is APR?The Annual Percentage Rate (APR) takes into account the interest on the mortgage and other charges. Lenders have to tell you what their APR is and you can use it to compare mortgage offers. They vary a lot, but your adviser will be able to explain how to spot a high APR.
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What is LTV?LTV (Loan to Value) is the size of the mortgage as a percentage of the value of the property (or its purchase price). Lenders take LTV percentages into consideration when considering your application for a mortgage.
With a £70,000 mortgage required against a property value of £100,000, it would be 70% LTV.
With a £75,000 mortgage required against a property value of £100,000, it would be 75% LTV .
With an £80,000 mortgage required against a property value of £100,000, it would be 80% LTV .
With an £85,000 mortgage required against a property value of £100,000, it would be 85% LTV.
With a £90,000 mortgage required against a property value of £100,000, it would be 90% LTV.
70% LTV Mortgage Comparisons | 75% LTV | 80% LTV | 85% LTV | 90% LTV | Back To Top
Bridging MortgagesA bridging mortgage is a loan that's sometimes taken out to solve a temporary cash shortfall that may happen when buying a property or business.
One might also be needed if you are buying property at an auction, paying for a property renovation or if you wanted to buy a 2nd property before your first one is sold. Bridging mortgages are not regulated by The Financial Conduct Authority (FCA).
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Buy To Let MortgagesA buy to let mortgage is a loan taken out to purchase a property with the intention to let to tenants. The loan is secured against the property to be let.
There are a wide range of standard buy to let mortgages or maybe you need to remortgage to raise a deposit to purchase a buy to let, or you wish to remortgage an existing buy to let property. Whether this is your first investment or you're buying multiple properties, our specialist buy to let mortgage advisers can help.
Buy to let mortgage or remortgages are not usually regulated by The Financial Conduct Authority (FCA).
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Capped Rate MortgagesA capped rate mortgage (sometimes known as a cap and collar mortgage) puts a ceiling on the interest rate that you have to pay. You therefore have the reassurance of knowing the highest amount that the lender can increase the interest on your mortgage within a set period of time, typically between one and five years.
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Cash Back MortgagesOften aimed at first time buyers, cash back mortgages offer a cash lump sum at the start or at a certain point during the mortgage term.
Normally, all or some of the cash back is repayable to the lender if you repay your mortgage in the early years.
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Debt Consolidation MortgagesA debt consolidation mortgage combines existing debts you may have if you're having difficulty paying your bills. For instance, your current mortgage, bank loans, credit cards and hp agreements could be combined by means of a remortgage.
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Discount MortgagesA discount mortgage offers a percentage discount from the lender's standard variable rate for a set period. With a discount mortgage, your payments are variable, but are fixed at less than the lender's standard variable rate for a set time. At the end of this set time, you're usually charged the lender's standard variable rate.
A discount mortgage is useful for people who prefer lower mortgage payments to start with, but are happy to take on the higher rates later in the mortgage term. Discount mortgage rates usually last between 6 months to 5 years.
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Fixed Rate MortgagesMany people like the reassurance and security of a fixed rate mortgage over a fixed number of years. The interest rate that you are charged stays the same for a fixed length of time. This helps when planning your budget and can offer peace of mind.
A fixed rate mortgage is charged at a fixed rate within that set period and typically covers periods of 1 year, 2 years, 3 years, 4 years, 5 years or 10 years. So basically, the mortgage interest rate remains fixed for a set period as opposed to the type of mortgage where the interest rate may change over time.
So, if you like the stability of knowing what your repayments will be, you might choose a fixed rate mortgage or you may be happier taking the risk that interest rates will remain stable or come down by choosing a base rate tracker mortgage. There are a wide range of fixed rate mortgages to choose from.
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Flexible MortgagesA flexible mortgage (sometimes known as an offset mortgage, Open Plan Mortgage or Current Account Mortgage) gives the borrower more control to vary their monthly payments. They can be used with either an interest only mortgage or repayment mortgage.
There are many different types of flexible mortgages. Flexible mortgages allows borrowers to do one or more of the following:
- Overpay, and sometimes borrow back your overpayments
- Skip payments (payment holidays mortgage)
- Pay off your mortgage early
- Have their interest calculated daily
- Pay no redemption penalties
High Income Multiple MortgagesMost lenders set limits on how much they'll lend based on the multiples of your income. Lenders usually offer to give you a mortgage amount based on your income and, if a joint mortgage, your partner's income. It can sometimes be difficult obtain more than the standard limits. There are a however range of high income multiple mortgages to choose from.
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Interest Only MortgagesWith an interest only mortgage, the initial loan amount remains constant through the whole term of the mortgage. The monthly repayments only pay off the interest being charged on this amount.
Interest only mortgages are usually tied to savings or investments plans such as endowments, personal pensions and ISAs, that you will have to pay into - this is designed to cover the initial loan amount at the end of the term. They're not guaranteed to cover the full mortgage amount.
You will have to ensure you have enough money to repay the mortgage by the end of the term, otherwise you may lose your home.
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Let To Buy MortgagesA let to buy mortgage, not to be confused with a buy to let mortgage, is useful if you need to move but can't sell your home. Basically, you rent out your existing home and whilst taking out a let to buy mortgage on it. The money goes towards paying for your new home.
They are also useful if you want to keep your original home for investment purposes.
Let to buy mortgages or remortgages are not usually regulated by The Financial Conduct Authority (FCA)
Let To Buy Mortgage Comparisons | Back To Top
What are Offset MortgagesAn offset mortgage is a flexible mortgage that's combined with a current account and is used for the purchase of residential property.
Sometimes called current account mortgages or open plan mortgages, offset mortgage varies between the lenders, some have a single account for all transactions whilst others have multiple accounts.
The current account balance is set against the mortgage balance and interest is charged only on outstanding amounts. This is designed to reduce interest payments.
Offset Mortgage Comparisons | Back To Top
Pension MortgagesWith a pension mortgage, an interest only mortgage is taken out and, at retirement, the tax free lump sum that can be taken from your pension plan is used to pay off the mortgage. You can then draw your pension from the balance of the fund. If the proceeds of the pension don't achieve the amount expected, there could be a shortfall. Although tax-efficient, a pension mortgage is not suitable for everybody.
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Repayment MortgagesWith a repayment mortgage you pay back the interest and capital as opposed to an interest only mortgage where the monthly repayments pay off only the interest being charged on the mortgage amount.
So basically, you make monthly mortgage repayments for an agreed period (the term) until you have paid back both the interest and the loan.
Repayment Mortgage Comparisons | Back To Top
RemortgagesWith a remortgage, the terms of the original mortgage are re-negotiated. There are many reasons why someone might want to remortgage. They may be coming out of a fixed rate deal or tracker mortgage and are looking for a better interest rate and/or alternative mortgage.
You may have a lot of unrealised value in your home. Remortgaging could release a lot of this money and it's possible to remortgage to raise money by extending the term of the loan.
Depending on how much equity you have in your home, you may be able to remortgage to raise more funds to pay for home improvements such as an extension, conservatory or a loft conversion.
Some borrowers use debt consolidation remortgages to repay debts.
Remortgage Comparisons | Back To Top
Self Cert MortgagesIf you have a problem proving your income (maybe because you are self employed and don't have accounts going back far enough), a self cert mortgage (self certification mortgage) allows some borrowers to state their own income instead of offering accounts or payslips.
Others with a problem may include commission-based employees, seasonal wage earners or contract workers with irregular earnings.
Self Cert Mortgage Comparisons | Back To Top
Standard Variable MortgagesWith a standard variable mortgage your payments go down or go up with your lender's standard interest rate. The rate will often change following Bank of England base rate changes.
You could benefit from a reduction in rates meaning your monthly payments go down. You also usually have flexibility to over-pay without penalty. This assumes that your lender has no restrictions on making overpayments and early repayment charges don't apply. On the other hand, when interest rates rise, your monthly payments could go up as well.
Standard Variable Mortgage Comparisons | Back To Top
Tracker MortgagesA tracker mortgage is a variable mortgage that has an interest rate that follows the base rate of the Bank of England. Monthly mortgage interest payments go down when the base rate declines and go up when the base rate increases.
A tracker mortgage's interest rate is a set amount below or above the Bank of England's base rate or some other base rate. It tracks the changes in that particular rate.
Tracker Mortgage Comparisons
Is this you?You search and search again, you find one mortgage then another. You can't decide what you want to do, you put it off until another day. In the meantime you worry about not doing what, in your heart of hearts, you know you should do.
Then welcome to the human race!
At one time or another we've all put off until tomorrow what we should be getting on with today. Right, tomorrow is cancelled for the time being. Let's deal with today! Follow me, we're nearly there...
Just complete the really easy free enquiry below and a UK regulated professional broker will search the mortgage market for you. He will make recommendations to you and can help you decide your course of action. Are you saying it can't be that simple? Well, yes it can...
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WHY USE US TO FIND YOUR MORTGAGE OR REMORTGAGE
We are registered and regulated by the Financial Conduct Authority (FCA) and covered by the Financial Ombudsman and Financial Services Compensation Scheme.
We don't charge a fee for our mortgage or non-investment insurance business. Our fee will come from the provider that we recommend to you.
Our highly experienced team of expert financial advisers will help you avoid making all the classic mistakes when comparing mortgages.
Specialist & exclusive deals. We can access some of the most competitive rates in the industry. You can save £100's each month with a lower rate mortgage.
Many of our competitors will only quote on a limited range. We are proud to be able to advise on the whole of the UK mortgage market - over 200 lenders.
Our buying power enables us to provide competitive rates on many "hidden" mortgage products that you can't get yourself by going directly to the lender.
We provide a mortgage comparisons service for both homeowners and first time buyers.
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