07717 676368
WORKING WITH YOU
GETTING TO KNOW YOU
We will want to learn more about you, your circumstances, and your overall financial position. We will also want to hear your thoughts on which type of mortgage you believe is right for you before we talk you through the pros and cons of each option.
RESEARCHING THE OPTIONS
Using our expert knowledge and database of several thousand mortgages, we will find the ones that are most suitable for your needs.
RECOMMENDING THE RIGHT SOLUTION
Once we have identified the options available, we will meet with you again or discuss our recommendations over the phone. We will also write to you so you can review what we have suggested, and why. Assuming you are happy with our recommendation, we will work with you to complete the application forms and liaise on your behalf with solicitors, valuers, and surveyors. We can also talk you through the vital areas of financially protecting your new property and we will stay in touch throughout the process – and into the future.
TYPES OF MORTGAGES
Before you choose a specific deal, you need to decide what type of mortgage is the most appropriate for your needs.
Variable rate Your monthly payment fluctuates in line with a Standard Variable Rate (SVR) of interest, set by the lender. You probably will not get penalised if you decide to change lenders and you may be able to repay additional amounts without penalty too. Many lenders will not offer their standard variable rate to new borrowers.
FIXED RATE
With a fixed rate mortgage, the rate stays the same, so your payments are set at a certain level for an agreed period. At the end of that period, the lender will usually switch you onto its SVR (see ‘Variable rate’). You may have to pay a penalty to leave your lender, especially during the fixed rate period. You may also have to pay an early repayment charge if you pay back extra amounts during the fixed rate period. A fixed rate mortgage makes budgeting much easier because your payments will stay the same - even if interest rates go up. However, it also means you will not benefit if rates go down.
TRACKER RATE
Your monthly payment fluctuates in line with a rate that is lower, or more likely higher than a chosen Base Rate (usually the Bank of England Base Rate). The rate charged on the mortgage ‘tracks’ that rate, usually for a set period of two to three years. You may have to pay a penalty to leave your lender, especially during the tracker period. You may also have to pay an early repayment charge if you overpay extra amounts during the tracker period. A tracker may suit you if you can afford to pay more when interest rates go up – and you will benefit when they go down. It is not a good choice if your budget will not stretch to higher monthly payments.
FLEXIBLE MORTGAGES
These schemes allow you to overpay, underpay or even take a payment ‘holiday’. Any unpaid interest will be added to the outstanding mortgage; any overpayment will reduce it. Some have the facility to draw down additional funds to a pre-agreed limit.
GOVERNMENT-BACKED SCHEMES
Over recent years the government has backed several schemes – such as ‘Shared Ownership’ – to support homebuyers. We can explain the details of these schemes and whether you can benefit from them.
DISCOUNTED RATE
Like a variable rate mortgage, your monthly payments can go up or down. However, you will get a discount on the lender’s SVR for a set period, after which you will usually switch to the full SVR. You may have to pay a penalty for overpayments and early repayment, and the lender may choose not to reduce (or delay reducing) its variable rate – even if the Base Rate goes down. Discounted rate mortgages can give you a gentler start to your mortgage, at a time when money may be tight. However, you must be confident you can afford the payments when the discount ends and the rate increases.
OFFSET MORTGAGES
Taking out an offset mortgage enables you to use your savings to reduce your mortgage balance and the interest you pay on it. For example, if you borrowed £200,000, but had £50,000 in savings, you would only be paying interest on £150,000. Offset mortgages are generally more expensive than standard deals, but can reduce your monthly payments, whilst still giving you access to your savings.
REPAYMENT METHODS
The two most common ways of repaying your mortgage are capital repayment and interest only.
CAPITAL REPAYMENT
On a repayment mortgage your monthly payments will comprise a portion to pay the interest on the money you have borrowed, as well as a portion to repay the capital sum (the amount you borrowed). The benefit of capital repayment is that you can see the mortgage reducing each year (albeit very slowly in the early years) and you are guaranteed to repay the debt at the end of the mortgage term if payments are maintained. On a capital repayment mortgage, the shorter the term you pay your mortgage over the bigger the monthly payment will be. By having a longer term, you may benefit from a lower monthly payment, but you will pay more interest to the lender over the term. You will need to think about how soon you want to be ‘mortgage free’ and balance this up with the mortgage term that makes the monthly payments affordable.
INTEREST ONLY
If you opt for an interest only loan, your monthly payments will only cover the interest on the mortgage balance. The capital (the amount you borrowed) will remain the same and will need to be repaid at the end of your mortgage term. This means you will need a separate investment or combination of investments to generate the capital required, and you will need to prove that you can afford to do this. The value of investments can go down as well as up and you may not get back the original amount invested. For an interest only mortgage, the lender will need to see your plan for repaying the loan when the interest only period ends. If you fail to generate enough to repay your mortgage by the end of the mortgage term, you may be forced to sell your property.
WHAT ELSE DO YOU NEED TO KNOW?
SURVEYING
Before giving you a mortgage, your lender will instruct a survey to confirm the price you are paying for the property is appropriate. The most common types of survey are:
Basic mortgage valuation ​
This is for the lender’s own purposes to confirm the property provides security for the loan.
​Homebuyer’s report
This provides brief information on the property’s condition. The report will include comments on the property’s defects and the valuer’s opinion as to its marketability.​
Full structural survey
This report is the most comprehensive survey it is based on a detailed examination of the property.
SOLICITORS
Before going ahead with a property purchase you may need to appoint a solicitor or conveyancer to act on your behalf. They will undertake the legal work required to ensure the ownership (title) of the property and land transfers successfully. If you do not already have a solicitor who undertakes conveyancing work, we can recommend one using a specialist company that provides access to a nationwide network of solicitors. Some lenders will offer to pay for the basic mortgage valuation as an incentive. You may also want to consider one of the more detailed surveys, depending on the age and condition of the property. In most cases you can use the same surveyor to carry out both surveys, but there is nothing to stop you appointing an independent surveyor should you choose to do so. We can help you do this.
Solicitors, valuers and surveyors are not regulated by the Financial Conduct Authority
SPECIALIST LENDING
If you are looking for buy to let, second charge loans, or bridging finance, you will have specialist requirements that set you apart from a standard residential purchaser.
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We can access second charge loans and bridging finance through our Bridging Providers. We do not advise on second charge mortgages. If you need a second charge mortgage, we will refer you to one of our Specialist Providers, who are master brokers for second charges.