What is a mortgage?
In simple terms a mortgage is a long term loan to buy a property. Mortgage terms are usually over 25 years but the longest readily available option is over 40 years.
How much mortgage can I afford?
Lenders will consider a number of factors when considering your application namely your income, expenditure, and your credit score. This will determine how much you can borrow, the interest rate offered, and your monthly repayments. Each lender is different and a mortgage broker can support you in finding the best deal for you and your particular circumstances. Our mortgage calculator can offer a brief overview of what’s available and the monthly payments before you book a personalised appointment with our mortgage team.
What is the difference between a variable or fixed rate mortgage?
With a variable mortgage, your interest rate will go up and down throughout a fixed term which means your mortgage payments will vary. The variable rate is set by your lender and won’t necessarily always rise or fall in line with changes to the Bank of England base rate unless you’re on a tracker mortgage (see below).
A fixed rate deal gives you a set monthly mortgage payment to budget around for a period of time, typically 2,3 or 5 years.
What is a tracker mortgage?
A tracker mortgage is a type of variable rate mortgage that tracks the Bank of England Base Rate at a set rate above. Over a fixed period, usually 2 - 5 years, if the base rate falls so do your interest rate and your monthly payments and the opposite happens if the base rate increases. For a tracker mortgage to work for you, you need to have flexibility in your household budget to accommodate potential increases. The benefits are you might save money if the rates drop plus tracker mortgages generally offer more flexibility if you want to swap deals though you do need to check for early repayment charges.
Why should I use an independent mortgage adviser rather than approaching my bank?Independent advisers often have access to lenders or schemes which are not available if you were to apply directly. They can review the whole marketplace to offer mortgage advice on the most suitable products for your circumstances. Getting a mortgage deal is not just about the interest rates, they also consider fees, affordability and criteria checks.
Should I get a mortgage agreement in principle before I make an offer?An agreement in principle is the first step to getting a mortgage from your mortgage lender. Often called a mortgage promise it shows an estate agent and potential seller that you are serious about buying a property. Applying for an agreement in principle won’t affect your credit score and is often valid for 90 days until you complete your full mortgage application. In times of high demand on a property, some estate agents may only accept offers from buyers who have one in place.
When is stamp duty payable?
In England, no stamp duty is payable on the first £125,000 of any purchase price as long as this will be your main residence and is not a second home. If you’re buying a property worth:
between £125,001 and £250,000 stamp duty is owed at 2%, £250,001 to £925,000 stamp duty is owed at 5%and at 10% if the property is between £925,001 and £1.5 million.
The method of calculation is simply to apply the rates specified to the parts of the relevant purchase price falling within each band.
If you are buying your first home you won’t need to pay stamp duty unless the property you’re buying is over £300,000 and then you will only pay 5% on the amount from £300,001 to £500,000.
Your conveyancing solicitor will usually advise the rate of stamp duty due, collect from you and pay your on your behalf within 14 days of your property completion.