Mortgage Brokers Answer Your Questions

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A mortgage is a charge placed onto a property by a Bank/Lender. 

The client traditionally puts some of their own money down as a deposit, and the lender adds the rest, to buy the property. The lender does not own any part of the property, but can repossess the property should the client not keep up repayments. The client is assessed based on the lenders requirements to see if they are eligible for a mortgage.   

Are you eligable for a mortgage?

Mortgages are a first charge, or second charge, against a property. Lenders don't own part of the property, but if for any reason you have to sell it, the charge(s) is paid off and you get what is left. 

You borrow  money at an agreed rate of interest and pay it back in monthly installments. You can pay the loan back on a repayment or interest only basis, the latter not common on residential purchases. 

On a repayment mortgage, the monthly amount you pay to the bank/lender will include interest and capital. If your mortgage is £500pcm, it may be £200 capital and £300 interest. So £200 is effectively coming back to you as equity in the property (as long as house prices are stable). 

Compared to renting, where you pay your landlord rent each month and see nothing back, a mortgage can be financially beneficial in the long run.  

Speak to a mortgage broker. 

They will assess your situation and go through what you need to provide, what a lender will ask, and give you an indication of how much you can borrow and what your monthly payments may be. 

A short phonecall could save you hours of trawling each lender individually. Brokers can also give advice, lenders usually can't. 

Stratton Regent brokers have the entire mortgage market to choose from and could save you money by finding you the best lender/rate for your circumstances.  

Speak to a mortgage broker

Apart from some recent exceptions, 5% has been the minimum deposit required by most lenders. 

There are some schemes where it is possible to get a mortgage without a deposit. If you have family with property, or they have spare money to lock in a savings account, you may have options; but traditionally 5% is the minimum requirement as things stand. 

However, the more deposit you have, the better your mortgage rate is likely to be. 

Lenders base their rates on risk. 

If you buy a property with 5% deposit you are a high risk. If the housing market drops 10% and the lender has to repossess your property, they are not getting their money back. 

As lenders/banks like money...a lot...they will only offer a higher rate of interest on a 5% deposit. If you have 50% deposit, you are a very low risk of them not getting their money back, so they will offer you a better rate.   

Speak to a broker about rates

It depends on your situation.

We will discuss with you your options in a clear and understandable way and help you feel confident of what is achievable. 

Before you know what you can borrow, and want to borrow, you will need to consider the costs of buying and owning a home, such as: - 

• household bills (utilities etc)
• council tax
• insurances 
• flat costs like service charge and ground rent (if applicable)
• stamp duty
• solicitor costs etc

All mortgage lenders will need to see proof of your income, expenditure and any debts you may have. 

Lenders will look at your credit history, so make sure there are no nasty surprises by checking your credit rating. 

Checking your credit history with all credit bureaus is the best place to start and we recommend checkmyfile as it has all credit bureaus and all the information we need to assess your situation. Click the link or banner at the bottom of the page to get your report.  

A Mortgage Broker. 

If you are in any doubt, call one bank to book an appointment, and compare that to speaking to a broker at Stratton Regent. 

BANK

The bank may have an appointment a week next Tuesday, block out 2-3 hours of your day (plus travel). Then spend the first hour going through their compliance and terms of business, maybe watching a little video about it. Finally discuss your situation, only to find out you are speaking to a mortgage representative, not a qualified CeMap broker, and they can't give you any advice. They will show you their products and tell you which fits your situation the best, even if there may be a different way of looking at it. Now repeat for every lender on the high street. 

BROKER

Stratton Regent brokers will go through the compliance and terms in 5-10 minutes. They will then discuss your situation and offer you advice. As whole of market brokers, we will then compare every lender, every rate on the market to get you the best deal. Usually all over the phone in 30mins. Next steps are easier too, and you have one point of contact all the way to you getting your keys. 

You will get the same rates as going direct to a bank, sometimes better.

At Stratton Regent, we do have access to exclusive rates with lenders, which are cheaper than if you went direct. 

Lenders will assess your situation, go through what you need to provide, and usually give you an indication of how much you can borrow and what your monthly payments may be. 

A short phonecall could save you hours of trawling each lender individually, and brokers can give advice, lenders usually can't. 

Our mortgage brokers have the entire mortgage market to choose from and could save you money by finding you the best lender and/or rate for your circumstances.    

Speak to a broker

According to HMRC, a First time buyer (FTB) is someone who has never owned a property anywhere in the world. 

Some lenders will will treat you as a FTB if you haven't owned a property in the UK for several years, meaning you can access their FTB rates/products, but for tax reasons, you can't have owned any property before.  

Mortgage Brokers.

Whole of Market: Being independent and whole of market means we have access to every rate and deal on the market in the UK. This includes all high-street lenders such as Barclays, HSBC, Halifax, NatWest, Nationwide and Santander. 

Whatever your situation, we will help you achieve your best available mortgage rate and deal.

Stratton Regent brokers give the best advice and guidance suited to your situation, and the best available rates and deals. We complete everything for you whilst supporting you every step of the process.

We are your online and local mortgage broker offering a customer-focused service.

What are my options?

Yes. 

There are several types of contractor and all have quirks that lenders may or may not take into account. The most common are: -

• Employed or self employed
• Fixed Term
• Short Term
• Construction Industry Scheme (CIS)
• Pay own tax or taxed at source
• Umbrella Company

There should be a lender for you. 

The typical requirements are 12 months, or more, contracting experience as a minimum, but even without this a mortgage may be possible. 

Speak to a broker and they'll advise on the best option for you

Yes, Construction Industry Scheme (CIS) contractors can get a mortgage. 

In some ways, it can be easier than a more traditional contractor to secure the borrowing.  

Some lenders specialise in CIS, but there are still several variables such as 

• Do you pay your own tax? 
• Are you paid through an Umbrella company? 
• How long have you been doing it? etc. 

The best way to get a mortgage as a CIS contractor, is to speak to an experienced mortgage broker to guide you through the potential pitfalls.  

Possibly.

It depends on the level of bad credit you have and each lender has their own criteria. 

The best thing to do is to download your credit report and send it to us. Our brokers will assess it and let you know your options...there may be more than you think.  

Checking your credit history with all credit bureaus is the best place to start and we recommend checkmyfile as it has all credit bureaus and all the information we need to assess your situation. Click the link or banner at the bottom of the page to get your report.   

As above, possibly. 

If you can't remortgage, you may be able to do a Product Transfer, changing your rate with your current lender to still have something competitive. 

Again, the best thing to do is to download your credit report and send it to your broker to assess.   

Speak to a mortgage broker.

They are all basically the same thing, although some lenders classify them differently. 

• Agreement in Principle (AIP)
• Decision in Principle (DIP) 
• Mortgage in Principle (MIP) 

They are often referred to by estate agents when asking about your finance, arranging viewings or putting offers forward. They are all a basic document based on initial lender criteria being acceptable and a credit search or check being carried out. 

Some credit searches are a 'soft footprint' which usually only stay on your credit file for 30 days and can only be seen by you and the lender. Others do a 'hard footprint' credit check which goes deeper and remains on your report. A number of these can affect your credit score so better to do it correctly first time. 

Stratton Regent brokers go through your situation and can provide an AIP/DIP/MIP for your viewing needs. They will assess the case based on your information and documents and input the correct figures to the lender. This should be a pretty good guide as to whether or not you can actually get a mortgage. There are no guarantees as things can change in your situation or the lender criteria between DIP and application. 

Get an AIP/DIP/MIP

You will need at least: - 

• ID – Passport ideally
• Proof of address – Ideally driving license, or utility bill dated within last 3 months
• Credit report (possibly)
• 4 months payslips if employed
• Last 12 months worth of contracts if a contractor
• New starter contract if newly employed
• Last 3yrs SA302's and Tax Year Overviews if self employed (2yrs may be acceptable)
• Possibly 2yrs company accounts if self employed
• 4 months bank statements
• 4 months business bank statements if self employed
• Accountant Certificate (possibly for self employed)
• Details of all credit commitments (credit cards even if don’t use them)
• Proof of Deposit/mortgage statement for current property
• Signed consent form giving your broker authority to act for you
• Other ad hoc documents based on your position and circumstances

There may be others required depending on specific lender criteria, and more can be required during the process. However, the above gives a rough outline of what you will need to get together. ID documents need to show clear edges all the way around, no fingers and be clear. 

Next steps

Typically you will need two years accounts submitted to HMRC to show earnings.

Some lenders will work from one years accounts if you've only been trading a year. Lenders vary on the income they will use for affordability. Some lenders consider salary, net profit (or share of) and dividends, so it depends on your type of self employment. 

Best thing is to speak to a mortgage broker and run through yor situation in depth to see what your options are. 

You have a few options. 

You do nothing and slip onto the lenders Standard Variable Rate (SVR) which is typically between 3% and 5%, so not a good idea. 

You can sell without penalty. 

You can do a Product Transfer, staying with the same lender and picking a new rate, usually without any further documents or assessment. 

Or, you can remortgage, which basically means starting again, being assessed by a new lender and being able to change everything about the mortgage. 

What are my options?

Yes, it's like starting the whole process again. 

Having already gone through the first buying process, you realise that your mortgage is probably your biggest outgoing. To save money, you might consider remortgaging your home rather than slipping onto the Standard Variable Rate (SVR) at the end of a fixed/discount period. 

How does remortgaging work? 

This is the process of moving your current mortgage to a new lender or entering into a new deal with your current lender. It makes sense to do so, as you can change almost everything about the mortgage at this point, including the rate, which could save you a lot of money. You have likely built up equity if the market has been kind, and could even remortgage onto a better Loan to Value (LTV)

You could use a re-mortgage to release extra cash for home improvements. Let’s say you wanted to build an extension, convert an existing part of your property, or carry out other projects. If it improved the value of your property, it could mean you can borrow more money when remortgaging.

You may consider remortgaging to consolidate debt, as you would then be able to raise the money to pay off your credit cards and existing short-term loans. These would be replaced by the monthly payments you would make on your new mortgage.

And if you want to start a business or buy a second property, you could also re-mortgage to release the equity tied up in your current property. 

Speak to a whole of market broker to examine your options and advise you on the best way forward.

Read the reviews, ask friends/relatives for referrals, do your own research. 

Another good tip would be to shop around. Speak to a few brokers and find someone you like, who explains things clearly and transparently and you would trust to look after one of the most important areas of your life on your behalf. 

At Stratton Regent, we pride ourselves on sharing our knowledge with our clients and always tell them the rate, lender and product we recommend, and why we feel it is best for the situation they are in. You have one contact from start to finish and we make sure you feel comfortable about everything we do.  

Yes, heavily.  

All brokers registered in England are authorised and regulated by the Financial Conduct Authority (FCA).

This is for your protection and to guarantee that the service and advice level is sound.

“Your home may be repossessed if you do not keep up repayments on your mortgage.”

Read our Legal Disclaimer for more info. 

You will usually need 25%+ deposit and the mortgage is based on the rental income.

If you are planning to buy a property to rent out, you are going to need a buy-to-let mortgage. They often cost more than residential mortgages, but as you stand to make a profit on your buy to let property, you may see a sizeable return.  

If you plan to rent out your residential property long-term, you will need to switch your current mortgage to a buy-to-let (let-to-buy) mortgage. 

You may not need a buy-to-let mortgage if you’re renting out your property on a temporary basis, but you will need the consent of your lender. Without permission, you will be in breach of your mortgage contract, and your lender might demand instant repayment of your mortgage. 

Buy-To-Let Mortgages cost more than residential mortgages. They are more expensive because:

• The interest rate is higher
• The lender may have a minimum income requirement
• Lender fees are higher
• You normally need to pay a deposit of at least 25% (some lenders will accept 20% but rates are much higher)

Lenders charge more for buy-to-let mortgages because they view tenants as a higher risk than owner-occupiers.

There are also several speciality buy to let mortgages. If you're a higher rate tax payer, you may be best looking into Limited Company mortgages. Maybe you want a property which has multiple bedrooms and you plan to rent by the room, then you'll need to look at House in Multiple Occupation (HMO) mortgages.  

There are many things to consider and Stratton Regent mortgage brokers can guide you through the options and work out what's the best route for you and your investment. 

Contact us about BTL mortgages

Potentially yes, depending on your situation. 

Keeping your property to rent out is called Let to Buy, but in most cases you will need an onward purchase to satisfy the lender requirements. 

If you're planning to rent out your property you will likely need to leave 25% equity in it (see Buy to Let) and the prospective rental amount will need to be enough to get the mortgage. With buy to let or let to buy mortgages, the mortgage is based on the rent and is stressed depending on your personal situation. 

Speak to a Stratton Regent mortgage broker today to go through your options. 

Potentially, yes. 

It will depend on your situation and moving your current mortgage to a new property is called Porting.

Most mortgages are portable so that part is ok. However, each porting application is usually assessed as a new applciation, but you keep your existing rate. You can add a partner, top up the mortgage with additioanl borrowing and change the term, but it will all be assessed as any new loan would be with most lenders. 

Yes, you absolutely need it. Life Insurances protect you and your family should you die or be unable to work. 

That seems a very heavy and dark thing to think about, but imagine if it happened to you, or to someone in your family. 

Just imagine it for a moment...what would you do? How would you cope? You have this terrible news and then you need to think about money...

You would potentially have a a lot of costs and financial concern to try and deal with along with your grief. Life insurnace simply takes away some or all of the financial concern and allows you to do what you need without worrying about money.  

Is Life Insurance really worth it? 

To answer whether life insurance is worth it or not you have to ask yourself another question; Could you afford to maintain your current lifestyle if you or your partner were suddenly gone? In most cases, the answer will be no. So is Life Insurance worth it? Yes!

• Life Insurance - Pays a lump sum when you die
• Critical Illness Cover - Pays a lump sum on diagnosis of a covered condition (cancer, stroke etc)
• Income Protection - Replaces part of your salary if you cannot work due to illness or injury
• Family Income Benefit - Pays a monthly income to your family in the event of death
• Illness & Injury Insurance - Can pay an amount for each day in hospital, fracture cover or accidental death

Losing a person’s income can have devastating effects on a household both mentally and financially. If you couple that with the emotional strain of losing someone, life can quickly take a downward spiral.

The younger you are, the less Life Insurance, Income Protection and Critical Illness cover costs. Premiums will also be lower if you are a non-smoker and if you are in reasonable health. It can be cheaper than you think and you really need to ask yourself the question is it better to have it and not need it than need it and not have it? 

Get a Life Insurance Quote

Yes you can.

Also, it may be cheaper and more comprehensive cover than a price comparison site. 

Click here to read more about home insurance

OR

Get a Home Insurance Quote

Yes, absolutely.

We provide mortgage and financial advice and support to anyone with an internet connection in England and the UK. 

We use a wide range of online communication, so if you are thinking, I could really do with some financial advice from a mortgage broker near me, wherever you are in the UK we can help. 

Contact us for an independent, no obligation discussion