Need Independent Mortgage Advice? Just fill in the enquiry form.

or should we call them millstones!!

Quite frankly, none of us really want them, but they do allow us to buy property instead of having to save up the entire purchase price (Imagine having to do that, could take a while!).

Did you know, the word mortgage is derived from the French word ‘mortir' which means to die, or the literal translation is ‘debt until you die' which is what it can often feel like! As a mortgage is likely to be the biggest financial commitment you will ever undertake, it's certainly worthwhile doing a little research to find yourself the right one.

With hundreds of mortgage products to choose from, how do you Figure out which Mortgage is the most Suitable for You?

Navigating your way through the mortgage maze can sometimes seem an overwhelming and intimidating process. Whether you are looking to move home, or simply looking for a better mortgage deal, let us figure out which is the right deal for you.

Just leave it all to us...

The first thing our experienced mortgage advisers will do is carry out a full appraisal to understand your needs and then research the market using a comprehensive sourcing system to find the most appropriate mortgage for you. We can help and advise you on mortgages for all the following ~

• First Time Buyer - special offers and deals to help you get on the property ladder
• Home-Movers- Upgrading? Downsizing? Move with confidence
• Re-mortgages - simply save money by switching to a better deal
• Buy to Let - expand your property portfolio and invest for the future.
  "The Financial Services Authority does not regulate most Buy to Let mortgages"
• Capital Raising - use a mortgage to raise capital for other investments or purchases
• Debt Consolidation - help alleviate financial pressures by consolidating your debts.
  Divorce- deals to help you refinance after a divorce or separation
• Adverse/Impaired Credit - no matter what your financial history, you can usually find a mortgage deal to suit you.
  “ The overall cost for comparison is 5.7% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 17/6/2009”
• Self Certification - A different way to arrange a mortgage if you are unable to prove income in the traditional way.
  “ The overall cost for comparison is 6.3% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 17/6/2009”
• Right to Buy - An initiative that allows you to buy your council home at a discount price.
  “ The overall cost for comparison is 4.8% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 17/6/2009”

We won't just look at the rate either... getting a good rate is important but the lowest rate doesn't necessarily mean it's the best deal for you, there are lots of other very important factors that we'll need to consider such as your lifestyle, age, spending habits and future plans so you get a mortgage that works for your maximum benefit.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Free Initial Consultation
If you would like a Free initial consultation with a qualified mortgage adviser to help you find the right mortgage or to review your existing arrangements, simply fill in the enquiry form and we'll arrange this for you.

Learn more about mortgages

1. The Repayment Methods
2. The Different types of Mortgage Deals
3. The Different types of Property Surveys
4. Associated Mortgage Costs/Fees
5. Mortgage Related Products

Repayment Methods

There are basically two major types of mortgage repayment methods available in today's market:

1. Repayment (aka: Capital & Interest)
2. Interest only

Repayment

A Repayment Mortgage is structured so that the monthly mortgage payments, comprising partly of capital and partly of interest, pay off the original amount borrowed as well as the interest that would be accrued over the mortgage term, by the end of the term.

Features

• A Repayment Mortgage is clear-cut and uncomplicated.
• It is a surefire way of repaying the loan provided that all payments are made and kept up with.
• Total amount owed decreases as time goes on.
• As interest rates go up in later years, it will not have as much of an influence on the amount owed due to the fact that the capital has decreased.
• It is not compulsory to arrange life cover to repay the mortgage.
• Even though life cover is not always required, it is worthwhile to arrange at least term assurance to ensure the loan can be repaid in the event of your death and to avoid the house having to be sold in order to repay the mortgage.

Interest Only

So called due to the fact that you only pay interest to the lender each month. The original loan amount remains the same for the term of the loan. Therefore a suitable investment is required to run in conjunction with the mortgage in order to repay the loan balance at the end of the term. The most common investments used for this purpose include Pension, Endowment and ISA.

Although there appear to be many types of Interest Only mortgages, this is only due to the fact that the name is associated to the relevant investment, e.g. you may of heard the expression Endowment mortgage, this simply describes an interest only mortgage that has an endowment policy set up to repay the loan at the end of the term. Even though the investments vary, the general nature of the Interest Only mortgages remains the same.

Features

• Investments are not guaranteed to appreciate so there is a certain amount of risk involved with the Interest Only.
• If the investment does not provide as good a return as was expected, it may not cover the loan. The onus is then on you to ensure that you can repay the loan at the end of the term.
• Investments associated with Interest Only mortgages are portable meaning that you can keep the investment, add to them and link them to a new mortgage if you move house.
• As a result of the original amount borrowed never going down, if you sell your house that amount will need to be repaid.

Back to top

Different Types of Mortgage deals

Variable

Usually referred to as the standard variable rate (SVR). This rate is set by the individual lenders and generally fluctuates in line with the Bank of England interest rate.

Discounted

This is a variable rate but set at a fixed percentage below the lender's standard variable rate. If you wish to pay back your loan before the end of the discounted rate, you may have to pay a charge known as a redemption penalty. In some cases these charges apply for a short time after the discount rate has ended (known as overhang).

Fixed

The rate is static for a set period of time, usually a number of years. Once this period has ended, the rate goes back to the lender's variable rate. Even though you can usually choose the length of the fixed period, the selection will be limited to current offers. There are often redemption penalties on these rates if you wish to repay the loan before the fixed rate is up and occasionally a short time after (known as overhang).

Capped

These rates are based on the lenders standard variable rate with your payments limited to variations between a minimum and maximum rate for a set period of time. The main advantage is you know the maximum your payments will be but if the lenders variable rate is lower than the maximum rate you pay the lower variable rate, in other words, if you are happy with payments on the maximum rate they can only go down but can't go up.

Tracker

These are similar to discounted deals except they track the Bank OF England base rate by a fixed percentage margin instead of the lenders standard variable rate. When the Bank of England changes the base rate, a tracker rate will change accordingly from the 1^st of the following month.

Flexible Mortgages

It is structured so that you can overpay, underpay and even take payment holidays without incurring any penalties. Most flexible mortgages have their interest calculated daily, bringing about the full benefits of overpaying. Regularly overpaying the Flexible Mortgage without later underpaying it could lead to the mortgage being paid off sooner and could save you thousands of pounds in interest. Flexible mortgages can be either Repayment or Interest Only.

Features ~

• Permits overpayments and underpayments on mortgages and allows all overpayments to be drawn back.
• Gives you the option to repay your loan before the end of the term by overpaying.
• Usually interest is calculated daily giving the benefit of saving you money when overpayments are made, even if the money is drawn back at a later date.
• Allows you to vary the amount you pay, either overpaying it, under paying it or taking payment holidays as long as you do not exceed your original mortgage threshold.
• Vary your payments to adjust to your current financial situation and lifestyle.
• Has the potential to supply you with substantial interest payment savings.
• Permits you to repay the loan before the end of the term using regular overpayments, if you would like to.
• Provides an excellent place to house spare money, e.g. annual bonus. This is due to the fact that interest saved on your loan will normally outweigh the amount you would normally receive from a savings account, even prior to income tax, which usually affects savings account.

Offset/Current Account Mortgage

These types of mortgages offer all of the above flexible mortgage features plus the option to offset your current and savings against them to save interest. Any money you have in your current & savings account offsets an equivalent portion of your mortgage balance on which you don't pay interest. In effect you are getting the mortgage rate of return on your current and savings account, e.g. if your mortgage rate is 5.75% you will effectively be getting 5.75% return (tax free) on your current and savings account.

Back to top

Different Types of Valuation Survey

Lenders require a survey to be undertaken on a property before even considering a mortgage application. This is to ascertain the valuation and suitability of the property for security purposes.

There are three types of Valuation Survey

Standard Mortgage Valuation: This type of valuation, although the cheapest, is for the lenders benefit only to provide a general observation of the property. It might not be able to determine any major structural faults with the property.

Homebuyers Valuation: You have the option to take a homebuyers report as this provides you with information about the general condition of the property. It is more expensive than the standard valuation as the surveyor is also working for your benefit as well as the lender. Although more in depth, it still does not offer or imply any warranty.

Full Structural Survey: This is the most thorough survey and also the most expensive. This type of survey will determine any structural problems with the property both now and in the near future, and does hold a certain amount of redress.

Due to the fact that property prices vary according to market conditions, the value of your property may depreciate as well as appreciate. In future, this could mean that your mortgage loan exceeds the property's current market value. This is known as a "negative equity" situation.

Back to top

Associated Mortgage Costs/Fees

There can be several fees associated with mortgages, the following provides a list of the most common fees and there general explanations.

Valuation/Application Fee

This fee covers the required valuation survey and administrative expenses incurred whilst processing an application. Some of this fee is usually deemed non-refundable from the outset and once the valuation survey has been done, it is usually considered entirely spent.

Arrangement Fees

These are fees charged by the lender for most products and maybe payable in advance, added to the loan or deducted from the advance on completion.

Higher Percentage Lending Charge

The lender may impose a charge if the amount required is higher than a certain percentage of the property value. The charge may be deducted from the advance or added to the loan. It was previously referred to as a mortgage indemnity guarantee (MIG)

Lenders use this money to indemnify themselves against any financial loss they experience, should they have to repossess a property due to a payment default(s). Although you pay this fee, it will only benefit the lender or any insurer involved from trying to recover all or part of any loss involved.

Such cover will not protect you if your property is subsequently taken into possession and sold for less than the amount you owe. You will also remain liable to pay all sums owing, including arrears, interest and your lender's legal fees and interest will continue to mount up as long as the mortgage is outstanding.

Broker Fee

This is a professional fee sometimes charged by the broker to cover the advice and service provided.

Redemption Penalties (also known as Early Redemption Charge)

If a lender offers you some sort of incentive deal (e.g. a discounted/fixed deal or a cashback) they may stipulate the mortgage has to be held for a certain period of time otherwise you will be required to pay a penalty for redeeming early.

Charges can be significant e.g. 6 months interest or repayment of the amount of benefit received, be it cashback or reduced interest. The period that an Early Redemption Charge applies can vary, sometimes it will match the period of the discount/fixed period but it can also go beyond the benefit period e.g. a 2 year fixed deal could have a 5 year Early redemption charge. This is referred to as an ‘overhang'.

Legal Fees

Any property purchase or remortgage will require a solicitor to handle the legal work, this is known as conveyancing. The legal fees consist of the solicitors professional fee and disbursements. Disbursements are the search fees payable so the solicitor can carry the necessary work and searches on your behalf. You can obtain a quote by providing the solicitors with the basic details of the property transaction.

Exit Fee

This is an administration fee (in addition to any redemption penalty) charged by the lender on redeeming the mortgage, this fee will always be disclosed upfront on mortgages taken after 1^st November 2004.

Back to top

Mortgage Related Products

In addition to mortgage repayments, you need to consider other related products such as life protection insurance, mortgage payment protection insurance  and buildings and contents insurance 

Free Initial Consultation
If you would like a Free initial consultation with a qualified mortgage adviser to help you find the right mortgage or to review your existing arrangements, simply fill in the enquiry form and we'll arrange this for you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE