Remortgage

Knowledge

Frequently asked questions

• How much is a mortgage?

  A mortgage will normally be agreed upon by the lender based on what they call ‘affordability’.

  In essence, this means that a mortgage will be granted based on how much you’re looking to borrow, your current financial position, and how much you earn.

  Most people will generally use roughly 25% of their net income to cover their mortgage payments, but there is a huge number of variables that makes this impossible answer as every mortgage is different and therefore it solely depends on what you can afford, what amount you borrow, how long you agree to pay the mortgage over, and the rate applicable to the mortgage.

  To discuss what it may cost you, based on your mortgage requirements, then feel free to contact us.

• What is a lifetime mortgage?

  A lifetime mortgage is a mortgage generally available to people aged over 55 years old.

  The mortgage is taken out with no requirement to have to repay the original mortgage amount until they die.

  They are generally taken out on an interest-only basis where the interest payments are made monthly. There are options to repay the mortgage amount should the person move/sell the property or decide that they wish to repay the mortgage on a normal repayment basis.

  They work like any normal mortgage in that they are based on the income and financial position of the applicant and a normal mortgage application process is undertaken.

• What is a mortgage?

  A mortgage is effectively a loan secured against your home. It is generally taken out over a longer period than an unsecured loan and it is also likely to have a lower rate.

  It is the mechanism to raise the funds required to buy your home or to purchase additional properties if you are in the financial position to be able to borrow the funds.

  Call us today and we will happily discuss all you need to know about what a mortgage is, how we can help you, and to help you understand what position you are in to be able to borrow what you need to purchase a property.

• What is a mortgage in principle?

  A mortgage in principle is an initial assessment completed by the lender where they look at the income position, debt position, lending amount, family position, and all other necessary income, including a hard or soft credit search, to be able to confirm ‘in principle’ that they would be happy to lend the applicant the money to purchase a home/property.

  It is not a mortgage offer but gives a good indication of the ability to be able to apply for a mortgage and to be agreed to the mortgage assuming that all the information presented to the lender can be evidenced when a full mortgage application is submitted.

• What types of mortgages are available?

  There are literally thousands of mortgage products available on the mortgage market and a huge variety of lenders that will look at a whole range of variables associated with your financial position.

  If you are in a sound financial position with no adverse credit impairments then it will generally come down to who the best lender is for your circumstances, who will give the best rate, and who will be able to lend you the most or provide the most efficient service if your mortgage is urgent.

  But, there are also a huge range of lenders that will look at various other financial circumstances differently from being able to use the most current up to date accounts if you are self-employed, to using benefit income, to look at any adverse credit that you may have on your credit file. The best way to find out if you are eligible for a mortgage and what your options are is to speak to a qualified mortgage broker who will be able to review your situation and then research the market for the best mortgage for your unique financial position and mortgage requirements.

• How long does a mortgage offer last?

  Most mortgage offers last for 6 months for house purchases, and some lenders differ when it comes to remortgage offers but these tend to typically be valid for 6 months.

  There are scenarios where these can be extended, but these are dependant on the specific circumstances around why it would need to be extended.

• How can I get a mortgage?

  Getting a mortgage may seem easy on the face of it, but with so many options available, a wide range of lenders to choose from, varying criteria and lending requirements based on the different lenders then the best way to obtain the right mortgage for your circumstances would be to employ a qualified mortgage broker.

  The broker will have in-depth knowledge of the lender rates, criteria, and affordability calculations and will be able to advise you on the right mortgage for your needs.

• How does the Buying Process work?

  Step 1 – Finding a property and agreeing on a purchase price

  So, you have reviewed your circumstances and know what you can afford, and you have found the perfect property. Once you have negotiated and agreed on the purchase price the estate agent/developer will issue all parties with a memorandum of sale which will include all the necessary information for you and the vendor. This is not a binding contract but confirms the agreed purchase price at this point.

  Step 2 – Mortgage application and instructing solicitors

  The next stage is to confirm that you have found a house and had your offer agreed to your mortgage broker/advisor. They will then provide the necessary recommendations as well as gather all the necessary information and evidence required to submit your mortgage application.

  At this point, you will also need to instruct a solicitor to open a file and start the preliminary checks to be able to act for you in your purchase.

  Step 3 – Gaining agreement for the mortgage.

  The mortgage application has been submitted and underwritten, all obstacles have been cleared and all additional queries have been satisfied for the lender to produce a mortgage offer.

  Step 4 – Solicitor searches and making enquiries

  Once the mortgage has been agreed and offered, your solicitor will start in earnest the rest of the work that they will have to do to ensure that the property you are buying is exactly what you are expecting. They may have completed some work, but without a mortgage offer, some solicitors will not want to do too much work as this will come at a cost if the mortgage isn’t offered and the purchase can’t complete.

  The solicitors will carry out all appropriate searches (ensuring the property is registered property, boundaries are accurate, no disputes currently in place etc…) and also liaise with the acting solicitor on the vendor’s side to have any ‘enquiries’ (queries) satisfied prior to confirm they are happy for you to proceed with the purchase.

  Step 5 – Managing the chain

  If the property purchase is part of a ‘chain’ i.e. other purchases and sales that run from the bottom of the ladder to the top of the ladder then your solicitor will need to liaise with the other solicitors within the chain to arrange an appropriate exchange date – when all contracts are signed and deposits are sent up the chain.

  Step 6 – Exchanging contracts

  Once the chain has been agreed and everyone is ready, the solicitors will agree on an ‘exchange’ date. This is the moment that you sign the formal paperwork to say that you will, in law, buy the property. It is also the time that you will provide the deposit funds to be sent to the vendors, this will usually be an agreed percentage of the purchase price. At the point that contracts are signed and the deposit money is sent you are legally obliged to complete on the purchase. If you decide to not go ahead with the purchase at this point then you effectively forfeit the deposit money that you have put down.

  Step 7 – Completion

  Once the contracts have been signed at the exchange the solicitors will agree to a completion date. At this point, they send the Certificate of Title to the lender providing your mortgage as proof that everything is now in place to complete. The lender sends the mortgage funds to your solicitor and your solicitor will send these funds to the vendor’s solicitor to complete the purchase!