Your mortgage questions
A mortgage is simply a loan used to buy property. The loan is secured against the property(ies) or land that you are purchasing.
How does a Mortgage work?
ANSWERED
There is a huge amount of different types of mortgages, just as there is a wide array of different types of properties one can purchase and different types of buyers making the purchase. A mortgage itself is always the same in terms of concept – a secured loan - the difference is the property one is purchasing and how the mortgage is to be repaid, both of which impact on the terms of the mortgage.
What different types of mortgages are there?
For example: Residential, buy-to-let, let-to-buy, offset, bridging loans, expat, international purchaser, guarantor, interest only, development, self-build, commercial and semi commercial, second home, holiday let, high-value mortgages to name but a few.
Within this list there is also a great deal of variation in the terms and conditions of the loan itself.
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A repayment mortgage means you are repaying both the interest and the capital you have borrowed, and interest only is simply a repayment of the annual interest accrued on the debt.
What is the difference between a repayment mortgage and an interest only mortgage?
A mortgage broker is a qualified and regulated advisor on the mortgage market and able to both assist you in procuring a mortgage and advise on the best solution given your circumstances and requirements.
What is a mortgage broker?
SPEAK TO A MORTGAGE BROKER
Mortgage advice, from a fully regulated broker, should be fully independent.
Is mortgage advice independent?
Mortgage brokers have access to rates not necessarily available by going direct to the lender and they can advise on the best course of action for your particular situation, which is not always straightforward. Private Finance is a whole of market mortgage broker, meaning they have access to over 140 lenders, including Private Banks and those without a consumer facing presence.
What are the benefits of using a broker versus going straight to a lender?
“I'm not sure whether we will be having any further communication between now (we exchanged on Friday) and completion - so I just wanted to say a huge thank you for helping us sort out our mortgage. You have made the whole process straightforward and pretty seamless - and it's been refreshing working with someone so efficient. Thanks again.”
Aye & Steven Leadbeater
“I would like to express my satisfaction with Private Finance. We were a slightly unusual case as my husband and I are both resident in Italy and wanted a mortgage in the UK for a property in London. You were able to sort us out very satisfactorily for an ex-pat mortgage and were always available to patiently sort our numerous queries along the way.”
Susanna Tisone
“Just a quick note so say thank you for your help last week. I am amazed we managed to exchange on Friday considering the number of people on the phone who said it couldn't be done. I don't know how you did it - but thank you!”
Hannah Mathews
You should consider your finance options as early as possible. This will ensure you know exact how much you can afford to borrow and therefore what property you can purchase. It also means once you have found a property you wish to purchase you can proceed to making an offer, providing you have an agreement in principle in place.
At what stage in the moving process should I arrange a mortgage?
Simply leaving it too late and then facing feasibility issues at a late stage when a buyer might have a found their dream property, over-estimating how much they can borrow and not exploring other options that may be useful, such as offset mortgages and the like.
What are the common mistakes people make when looking for a mortgage?
You do not need to insure a mortgage; however, it may be prudent to do so, either by taking out income protection insurance or life cover.
What insurance do I need for a mortgage?
There are still mortgages available and lenders that specialise in adverse credit lending, however you will need to be prepared to pay higher interest rates.
I have bad credit; will this be a problem?
There are several ways, but most importantly is reducing your credit utilisation and ensuring you do not miss any monthly payments. You can visit Experian to find out more in this regard.
How can I improve my credit score?
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Carter Jonas has been helping people to buy and sell property for over 165 years and take pride in giving the best possible advice. Organising finances is a big part of moving home which is why we partner with Private Finance, expert independent mortgage advisors with a track record of delivering exceptional results, whatever the mortgage requirement.
If you’re looking for a new home or investment, keen to sell or let your property as soon as possible, or simply curious to know what it might be worth, get in touch with one of our local experts today to arrange viewings or a complimentary market appraisal. And for a free, no-obligation chat about your finance options, contact one of our experienced, professional mortgage partners.
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This means Loan-To-Value and is usually given as a percentage ratio. It is the amount of loan you require compared to the value of the property. For example, a £600k loan on an £800k property purchase price would be a 75% loan-to-value.
What is LTV?
It is a written estimate from a mortgage lender indicating how much you may be able to borrow ‘in principle’ – it is not subject to the same level of detail as undertaking a mortgage application.
What is an Agreement in Principle?
An Agreement in Principle typically lasts between 60 and 90 days and if it expires you will need to reapply. However, it is important to not make too many applications if the lender undertakes a ‘hard’ credit search when you apply as this could have an adverse effect on your credit score.
What do I do if my Agreement in Principle expires?
A mortgage broker will find the best rate for you on the market, but if you want to double check, providing your circumstances are straightforward, you can undertake research online.
How do I know I’m being offered the best mortgage available to me?
Mortgages are usually subject to an application or product fee which you pay to the lender and can be added to the loan itself. If you use a broker there will be fees involved, which will vary depending on the complexity of your particular case.
What fees are involved in getting a mortgage?
This is the legal transfer of a property or land from one owner to another. This is undertaken by a solicitor and involves the drafting of contracts, ensuring all is order and undertaking searches to ensure there are no adverse issues that affect the property. There are two phases to a property transaction, exchange of contract and completion.
What is conveyancing?
This is dependent on your personal circumstances, including yours and any other joint applicants’ income and underlying assets, as well as any current outgoings and other debts you may have. It is important that the mortgage you get is affordable, as failure to keep up with repayments on your mortgage could lead to your home being repossessed.
How much can I afford?
HOW MUCH CAN I BORROW?
This depends on the value of the property, but at the moment the minimum deposit you would need would be 10% of the purchase price for residential purchases and circa 20% for buy-to-let properties.
How much deposit will I need?
The main costs to consider are solicitors fees, mortgage fees and the big one – Stamp Duty.The main costs to consider are solicitors fees, mortgage fees, estate agency fees and the big one, stamp duty. However the recent introduction of a stamp duty holiday means that most people buying a main residence under £500,000 won't pay any stamp duty.
What costs are there when buying a property?
STAMP DUTY CALCULATOR
We recommend you use an independent whole of market mortgage broker like Private Finance.
What measures can I take to ensure the likelihood of getting the best mortgage possible?
You can do, but if you wish to repay within your fixed rate term this may be subject to Early Repayment Charges. This varies depending by both the lender and the mortgage you are on.
Can I pay off my mortgage early?
This depends on your circumstances, but if you require a mortgage to finance the purchase you will need a specific mortgage that allows you to rent the property, either a buy-to-let mortgage or holiday let mortgage, depending on how you wish to rent the property.
How do I invest in a rental property?
Lisle Close, London
Guide price £450,000
ESTIMATED RENTAL VALUE £350 p/w
BUY-TO-LET MORTGAGE CALCULATOR
Yes, you can switch products with your current lender, known as a Product Transfer, or you can move to a new lender entirely and remortgage.
Can I move my mortgage to another lender if they are offering a better interest rate?
This depends on your circumstances, but if you require a mortgage to finance the purchase you will need a specific mortgage that allows you to rent the property, either a buy-to-let mortgage or holiday let mortgage, depending on how you wish to rent the property.
How do I invest in a rental property?
You should remortgage at the end of any fixed-term you may be on to avoid moving to the Standard Variable Rate which is considerably more expensive. The mortgage market is currently offering historically low rates of return, so it may be worth speaking to a broker to find out if you could save money in the long run by remortgaging, even if you may incur fees.
When should I consider re-mortgaging?
Can I move my existing mortgage to a new, more expensive property?
In theory, yes, it is known as ‘porting’ but it depends on your specific mortgage and your lenders terms and conditions.
This is what is known as a ‘further advance’ if you want to borrow more money with the same lender and you will need to undergo an affordability application for increased loan.
How do I borrow more from my existing mortgage?
It is best to speak to your lender as soon as is possible and explain the situation and especially important not to let any debts or arrears mount up. If you have any concerns about debt you can seek free and impartial advice.
What is I lose my job or am having difficulty paying my mortgage?
THE MONEY ADVICE SERVICE
There have been a number of changes with regards to lending criteria in the wake of coronavirus – you can read more about these here:
A guide to the post-COVID-19 lending landscape and how it affects you
What affect might the COVID-19 crisis have on my ability to get the best mortgage possible?
In order to give you an accurate picture of what is possible in your specific circumstances, we recommend you speak to one of Private Finance’s expert consultants.
TALK ABOUT A BETTER MORTGAGE
FIND THE BEST MORTGAGE FOR YOU
SPEAK TO A MORTGAGE BROKER
VIEW YOUR CREDIT SCORE
HOW MUCH CAN I BORROW?
STAMP DUTY CALCULATOR
BUY-TO-LET MORTGAGE CALCULATOR
THE MONEY ADVICE SERVICE
TALK ABOUT A BETTER MORTGAGE
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post COVID-19 lending guide
The basics
Mortgage advice
Remortgaging
The current market
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post COVID-19 lending guide
Sparkford Road, Winchester
Guide price £245,000
ESTIMATED RENTAL VALUE £900 pcm
Newmarket Road, Cambridge
Guide price £1,375,000
ESTIMATED RENTAL VALUE £1,100 pcm
St Helen’s Wharf, Abingdon
Guide price £1,850,000
ESTIMATED RENTAL VALUE £9,000 pcm
UNDER OFFER