FAQs

To apply for a mortgage, you will need to:

• Check your credit report.  You don't want to discover something late in the process that might hinder you.  You can use Check My File which will check your reports with all the major Credit Reference Agencies Equifax, Experian and TransUnion in one go.  You can get your report with a free trial* here.
• Make sure you are on the Electoral Roll where you live.  It is not just for voting purposes; lenders check it for proof of someone’s address and identity.
• Gather all the necessary documents together, e.g. proof of income such as payslips or self-employed income and tax calculations, bank statements and ID.
• Have details of your regular expenditure, such as monthly bills, loan or car payments and mobile phone contracts to hand.  Most of these will probably be on your bank statements but be prepared to have more details ready for your adviser like interest rates, monthly payments, start and end dates.
• Check your address is up to date on your bank statements and ID documents.  It might be tricky for you to get verified if addresses are mismatched on documents.

An Agreement in Principle (AIP) is a statement from a lender indicating how much you could potentially borrow based on an initial assessment of your financial situation.  It’s not a formal mortgage offer but it can be useful when house hunting as it shows estate agents and their sellers that you’re a serious buyer and are ready to go because your finances have been verified.  Estate agents will always ask you for this so get it in place ready for when you want to start looking at properties; you don’t want to find your dream home and then discover it is not affordable or find out that because you didn’t get your AIP ready, the vendor has gone with a buyer who did.

The amount you can borrow depends on several factors, including your income, outgoings, credit history, and the lender’s criteria.  Typically, lenders can offer between 4 to 5 times your annual income, but this is only one of many factors that lenders use to assess your borrowing capacity; lenders will analyse a borrower’s outgoings and overall indebtedness such as what loans or credit cards do they have?  Are they up to date with payments?  Plus other aspects of their situation.  It's advisable to talk to a mortgage broker who will be able to guide you on what you can potentially borrow by using tools available to them such as lenders’ mortgage affordability calculators; you can then get an estimate based on your own, specific financial situation.

A mortgage is a loan specifically designed for purchasing property.  When you take out a mortgage, the lender provides you with the money to buy a home, and in return, you agree to repay that loan with interest over a set period, typically 25-30 years but it can be longer or shorter depending on your individual budget and circumstances.  The property you’re buying acts as security for the loan, which means if you fail to make repayments, the lender can ultimately repossess the property to get its money back.

Yes, you can. It’s possible to get a mortgage with bad credit, but it can be more challenging and more expensive but it's not impossible.

You may need to:

• Provide a larger deposit
• Accept you will have to pay higher interest rates or fees
• Use a specialist lender that caters for those with adverse credit.

Obtain your credit report* first so you know what you're dealing with. It will be easier to make a positive start if you have all the facts.

The main two types of mortgages are Capital and Interest (a repayment mortgage) and Interest-Only. 

With a Capital and Interest loan, each monthly payment gradually reduces the amount you owe (the capital) and pays the interest on the loan at the same time. By the end of the mortgage term, the entire loan is paid off provided you have made all of your payments.  In contrast, an Interest-Only mortgage means your monthly payments cover only the interest on the loan.  The capital element (the amount you borrowed) remains unchanged, so at the end of the mortgage term, you will still owe the full amount you initially borrowed and need to repay it, either by selling the property and using the sale proceeds to pay it off, remortgaging and borrowing the money from a different lender or if you have funds from elsewhere, such as savings or an inheritance for example, that you can use to clear the debt.

There are several types of mortgage rates available, including: 

• Fixed-Rate Mortgages: The interest rate remains the same for a set period, for example 2, 3, 5, or 10 years. 

• Tracker Mortgages: These generally track the Bank of England Base Rate plus a set percentage.  Your monthly payments can change with interest rate fluctuations. 

• Variable Rate Mortgages: The interest rate can change, typically based on the Bank of England's base rate but also sometimes the lender’s own Standard Variable Rate which can move independently of the Bank of England Base Rate.  Like a tracker rate, your monthly payments can change if interest rates change. 

• Offset Mortgages: These link your savings to your mortgage, allowing you to reduce the amount of interest you pay and either shorten the term of your mortgage or reduce your monthly repayments.  Those savings are accessible so you can make a withdrawal, but it will have the opposite effect and increase the interest charged on your mortgage. 

Remortgaging involves switching your current mortgage to a new lender.  You might consider remortgaging to: 

• Get a better interest rate. 

• Switch from a variable to a fixed rate. 

• Release equity from your home (borrow more money) to make some home improvements or consolidate some debts.

The costs can include: 

• Deposit: typically, at least 5-10% of the property’s value. 

• Stamp Duty: a tax on property purchases over a certain threshold. 

• Valuation Fee: for the lender’s property valuation. 

• Legal Fees: For solicitors or conveyancers handling the purchase. 

• Lender's Arrangement or Product Fee: for setting up the mortgage or securing a particular mortgage product. 

• Broker Fee: for my expertise in finding the right mortgage for you from all the hundreds of available options.

If you’re struggling to meet your mortgage payments, contact your lender immediately.  They might offer solutions such as a temporary payment holiday, extending the mortgage term to reduce monthly payments, or switching to an interest-only mortgage for a short period.  Ignoring the issue can lead to problems such as payment arrears or ultimately repossession of the property by the lender.

Most lenders allow mortgage holders to pay off lump sums during the term of generally up to 10% per annum without triggering a penalty charge.  Some lenders allow more than this but check your Mortgage Offer or with your own lender to find out what you are allowed to do without incurring any additional costs.

Absolutely!  To pay off your mortgage early, you can: 

• If you have all the money you can pay it off entirely (check that your lender allows this without penalties).
• Make overpayments (again, check the penalty situation with your lender)
• Increase your monthly payments. 
• Opt for a shorter mortgage term when you remortgage.