FAQs
Frequently Asked Questions or FAQs are questions which many home buyers ask during the mortgage application process. If your question is not on this list contact us and we will be happy to provide you with the mortgage details you need.
Q. How much can I borrow?
Most lenders now use a credit score system to calculate how much they will lend an individual. However to give you an indication of your borrowing potential deduct payments to credit commitments from your salary and then, as an approximation, multiply by 3 for a single income or 2 for a joint income. Your credit status may increase or reduce the multiple.
Q. Who has the cheapest mortgage?
This will depend on your individual requirements, from which we can determine the lender you could use, the type of scheme you prefer (fixed, variable, cashback..), how long any special rate lasts for (e.g. fixed for 5 years), whether you go for a low rate with fees or a higher rate with no fees, early repayment charges, tie in period or not, plus many other factors. Remember, we are Independent Mortgage Brokers with access to the whole of market and will always endeavour to find the best deal that suits your specific circumstances.
Q. Which is best, an interest only or a repayment mortgage?
A repayment mortgage guarantees to repay your mortgage, interest only does not. Most lenders insist on a repayment vehicle for an interest only mortgage - the interest plus the cost of the repayment vehicle will be no cheaper than a repayment mortgage. You might be able to pay off your mortgage early using a repayment vehicle but then again it might take longer - there is no guarantee. How much risk are you prepared to take? Do you understand the risks? The answer depends on your own individual circumstances.
Q. I have experienced difficulties with making credit payments. Can I get a mortgage?
Due to the credit crunch lenders have tightened criteria and you mayl find that many lenders will no longer lend if you have have any form of arrears.
Q. I have changed jobs and have a probationary period, can I get a mortgage?
Most lenders will insist that you have passed a probationary period but we know some that are very competitive and mayl not concern themselves with a probationary period.
Q. What is the maximum period a mortgage can run for?
Most lenders will stop at 35 years or your retirement age. You can extend a mortgage term beyond retirement age if you can demonstrate that you can afford the payments. Most lenders are not willing to lend beyond age 75 unless you want an equity release mortgage.
Q. Do I need a deposit?
Yes! Due to the effects of the credit crunch all 100% mortgages have been withdrawn from the market. You will now need a minimum deposit of 10% to obtain a mortgage however to get the best mortgage rates you will have to put down in excess of a 40% deposit.
Q. I pay rent of £800pm and can easily afford a mortgage, why can't I borrow more?
You may be able to afford a mortgage at today's rates but what about in the future? If rates go up you may not be able to afford the mortgage and you risk losing your home and potentially some or all of the equity in it. Lenders therefore use an affordability matrix which may be a multiple of your salary or a combination of this and your credit profile to determine a level of lending that is not too risky for you or them.
Q. I want to buy a house with 3 friends, can we all get a mortgage on one property?
Yes you can but not all of your incomes will be taken into account. Most lenders will only take two incomes but there are some that take 3. Each person on the mortgage will be responsible for each others payments (i.e. if one person decided not to pay any more the others would have to meet that person's payments or risk affecting their own credit rating)