Whether you’re ready to start looking for your first mortgage, a re-mortgage, or simply want to find out more about how everything works, we're here to make the whole process as simple as possible for you. Rather than visit each of your local high street banks, a consumer can now visit a 'whole of market' mortgage broker such as ourselves who can take care of the hard work for you. And we offer this service at no charge to the customer, we are paid directly by the lender who pays us commission.
When you choose a mortgage, you need to take into account lots of different areas, such as the repayment method, interest rate, associated fee's, tie-in period and many more. The best mortgage for you will depend on your circumstances, and after carrying out a fact find which takes into account your financial situation and future plans, we'll match you with the best mortgage products which suit your needs. Below is some brief information about mortgages to help get you started.
There are the two main ways you can pay off your mortgage. These are called 'repayment' or 'interest only'. With a repayment mortgage you make monthly repayments for an agreed period (the term) until you've paid back the loan and the interest. With an interest only mortgage you make monthly repayments for an agreed period, but this will only cover the interest on your loan. You'll normally also have to pay into another savings or investment plan that'll hopefully pay off the loan at the end of the term.
Interest rate deals
As well as deciding on your repayment method, you'll need to look at the interest rate deals on offer, for example:
Tracker - Tracker rates are generally linked to the Bank of England rate or another 'base rate'. This means they'll always go up or down in line with changes to the base rate.
Fixed rate - You pay a fixed rate of interest for a set period, so you know exactly what you'll be paying each month during that time. When the fixed period ends, you'll usually move to the lender's standard variable rate. There are usually penalties if you pull out early.
Standard variable rate - With a variable rate mortgage your payments go up or down with the lender's standard interest rate. This often changes following Bank of England base rate changes.
Standard variable rate with cashback - With these deals you get a cash lump sum as well as the loan when you take out the mortgage. You're usually tied into the variable rate for a set period.
Discounted rate - You pay a lower interest rate to begin with then move to another rate (usually the lender's standard variable rate) after a set period.
Capped or cap and collar - With a capped rate you pay a variable interest rate, but there's a ceiling so your payments won't go above a certain amount for a set period. Some deals include a collar too - this is the lowest rate you'll get.
The arrangement fee is essentially an admin charge made payable by the lender. The size of an arrangement fee can vary from a couple of hundred pounds up to a few thousand pounds, and in most circumstances the lender will allow this fee to be added to the loan.
Valuation and survey fees-
Mortgage lenders need to have the property being lent against valued. This is in order to protect them from negative equity, and to make sure their mortgage is secure. The borrower is usually expected to pay the valuation fee up front, when they put the application form in. Most lenders charge valuation fees at the same sort of level, and will not refund if the mortgage fails to complete. Some lenders will pay valuation fees.
Lender conveyancing fee-
This is to cover the legal costs of arranging the mortgage, and is typically between £100 and £300. This should not be confused with the conveyancing work carried out by your own solicitor when buying or selling a property. (These figures are for illustration only, to obtain more detailed figures please contact us for a personalised illustration)