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mortgage guide
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Please note that the information contained within these pages in no way constitutes advice and as such is provided for information purposes only. Please speak to a qualified mortgage adviser to obtain a detailed analysis of your individual circumstances.
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Whether you’re looking to purchase your first home, remortgage your existing one or move to a new property, professional advice really can make all the difference. If you’re receiving advice the entire process should be as straightforward as possible and it’s helpful to know you’re being guided through every step of the way.
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There are several ways to obtain a mortgage. These range from searching the internet and applying online yourself, going to a high street bank or building society or using a mortgage broker, either tied or independent. Generally speaking your bank or building society can only provide you with ‘informed choice’ on their own products and not provide genuine advice.
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If you’re using a mortgage broker, he or she should be able to provide you with details on the most suitable deal for your individual circumstances. However, it’s worth noting that not all mortgage brokers have access to every lender on the market, so it's worth asking at your initial meeting whether or not they are independent. An independent broker can offer advice from the whole of market.
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Under the regulations of the Financial Services Authority (the independent watchdog which regulates financial services) independent mortgage advisers must explain to you how they are paid. They must inform you that an option to pay a fee exists and if so, when this fee would become payable. Alternatively, that they may be paid a procuration fee (commission) from any mortgage lender they place your mortgage with or that they can receive a combination of the two. They must also provide you with a Key Facts Document which explains how they are paid and details which services their company provides.
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To provide mortgage advice in the UK an adviser must posses either the CeMAP (Certificate in Mortgage Advice and Practice) qualification or MAQ (Mortgage Advice Qualification). Other qualifications your adviser may have are the Financial Planning Certificates 1, 2 and 3 or possibly CeRGI (Certificate in General Insurance).
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purchasing a property
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If you’re a first time buyer, getting the key to your first home can be a daunting process. Whilst getting on the first rung of the housing ladder is an exciting time, it can also be expensive and confusing, especially if you don’t have anyone to guide you through the process. Find a qualified adviser you can trust, who’ll talk to you without the jargon, possibly be able to help you find the right solicitor to handle the legal side of things and look at exclusive deals which may only be available to first time buyers. Your adviser may also help reduce your costs when setting up home for the first time by providing you with special incentives in areas such as home or mortgage payment protection insurance.
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Whether you’re a first time buyer or moving home, as a prospective purchaser you should seek professional mortgage advice to find out how much you can realistically afford to borrow before you begin the process of looking for an actual property. All too often people will find their dream home, only to be disappointed to discover that they can't loan as much as they first thought. A mortgage broker can also provide expert advice on the entire home buying process, including a guide to any fees and additional charges that you may incur.
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The fees that you may be liable for are a mortgage product fee, legal fees, stamp duty, mortgage broker fee, valuation fee and possibly any fee which is required for an additional property survey.
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When you have an idea of the amount you can borrow and are satisfied with the set up cost and repayment amounts, you can start looking for a suitable property. When you have found a property and had your offer accepted you should go back to your mortgage adviser to discuss your requirements further, at this point you should also brief your solicitors to commence their work on your behalf.
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The next step will be to make an application to your chosen lender. if you are using a mortgage broker, they should be available to help you with the forms and be able to talk you through the application process in greater detail.
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Once the lender has received your application, carried out a property valuation and then approved your application, a mortgage offer will be sent out to you. The mortgage offer is designed to cover the full terms that the lender is prepared to lend you the money on. It will include monthly repayment amounts, confirmation of any set up fees and provide details of any penalties for redeeming your mortgage early. This document is very important and you should be sure you fully understand all the aspects of it. If you have any questions regarding the mortgage offer you should contact your mortgage adviser or solicitor as they will have also received copies of this document.
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After you have made the decision to accept the mortgage offer, the next step will be to exchange contracts. Exchanging contracts is the point of no return - the vendor is obliged to sell and the purchaser is obliged to buy. It is at this point that your mortgage lender would normally insist that you take out a buildings insurance policy.
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Once you have exchanged contracts, all that is left to do is to set a date for your mortgage to complete. It is your solicitor's task to set this date after negotiating with all the interested parties.
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remortgaging
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It’s often easy to overlook your current mortgage, but there are many reasons for talking to a mortgage adviser about the options which are available to you. It could be that you’re looking at improving your home, for example planning an extension or loft conversion. Perhaps it’s worth considering consolidating your debts or changing from an interest only to a repayment mortgage. Maybe you’re simply paying a standard variable interest rate or your fixed or discounted deal is about to end. Are you concerned about possible rises in interest rates? Many people aren’t aware how easy it can be to arrange a remortgage and you may be entitled to free legal services, valuation or even cashback.
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Whatever your reasons for a mortgage or remortgage, seeking professional advice can help you get the deal that’s right for you. You can search for a mortgage adviser in your area with propertyspot.co.uk. Alternatively you may wish to ask family, friends or colleagues for a recommendation. The Financial Services Authority produces a useful register and you can check if your broker is authorised to provide advice by clicking here
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The Financial Services Authority also produces an excellent general guide to financial services with their ‘Money Made Clear’ website; you can visit this site by clicking here
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for our glossary of mortgage terms click here >>>
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