A mortgage is a bank or building society loan that provides you with the funds required to purchase your property of choice. This can be held by an individual or jointly between more than one person. Your loan will be repaid over a number of years with interested added. Your length of repayments will be assessed based on your personal financial situation.

If you do not keep up your repayments the property may become subject to repossession.

Each individual mortgage lender will have their own qualifying criteria, but as a general rule, the following areas are all common factors for consideration when assessing your mortgage application and deciding on the amount they will lend.

All mortgage lenders have their own criteria. The following factors all play a part in determining their mortgage offer and how much they are willing to lend to you:

• The amount you wish to loan
• How much you can put forward as a deposit
• Your income and employment status
• Your credit rating
• Any existing debts you may have
• Your regular outgoings
• Your age
• The length of the mortgage term you wish to take
• Whether you are a sole applicant or a joint application

You need to convince lenders you can maintain regular payments and complete the repayments of your mortgage. To analyse your capability, a credit report is used to check your repayment history. This will be based on reviewing previous and existing records such as other loans, mobile phone contracts, utilities, any credit cards you may have and any bank or building society accounts you have opened in within a six-year period. Should you have any CCJ’s, debt repayment plans, arrears or have declared bankruptcy, you still have mortgage options open to you and we can help you choose the best choice to suit your personal needs.

To be applicable for a mortgage you will require a deposit of at least 5% although a larger deposit will help secure you a better rate. If you already own a property and are looking to move, you can utilise the equity you have in your property for your deposit.

The next stage of the process is when you have found the property you want to buy. This is where our experts can help is assessing your personal circumstances and begin their search through hundreds of mortgage quotes. We also work closely with providers to secure exclusive deals to us, ensuring we are able to find exactly the right product and at the very best price.

Our advisor will present the product they believe is best for you and once you agree, you receive an AIP (agreement in principle). This gives you an estimated sum of how much the lender will let you borrow.

If your offer is successful you will need a solicitor that can process your searches, surveys and contracts through the remainder of the process. We can help you find a solicitor if you aren’t sure how to go about finding one. Our red-carpet service means that our team will handle the rest of the process between lenders, solicitors to make it as easy for you to prepare to move into your new home.

If your application is to remortgage, it is always worth starting the process early to make sure that we can tailor your new deal to fall in line with the end of your new one, again once we have found the right product for you, our red-carpet service means we handle the rest.

Usually you will be able to borrow up to five times your annual salary from mortgage lenders. Elements such as your age, dependants and financial commitments will affect your loan amount. A lenders loan amount will be based generally on you much can afford each month after you have settled any other financial obligations.

Our advisors will talk you through your financial situation and help you understand how much you will be able to afford before any credit searches or applications are carried out.

You will need to place a deposit of at least 5% however, the more you can place down as a deposit the better the rate will be for your mortgage. There are a few exceptions to this.

- If you already own a home, you can use the equity in your property for the deposit.

- If you are a council tenant and wish to buy under the right to buy scheme, the majority of mortgage lenders will accept your discount through the right to buy scheme as your deposit.

With property prices increasing, it’s becoming harder for first time buyers to save the amount required for their deposit. To help first time buyers get onto the property ladder the government has introduced the help to buy scheme.

As well as having enough for a 5% deposit, you will also need to ensure that have enough funds to cover mortgage and legal fees as well as costs associated with your move. These will of course fluxuate based on your mortgage lender, value of the property and your budgeting. But o help you understand in a little more depth, below are a list of common fees you should account for:

MORTGAGE BOOKING FEE – (£99-£250)

This is a fee some lenders charge to secure a fixed rate deal

MORTGAGE ARRANGEMENT FEE – (£1000-£2000)

A mortgage arrangement fee can be applied to some products and is separate from your mortgage booking fee. This will either be paid up front or in some cases can be added to your loan amount, however, if added to your mortgage, this will increase over the lifetime of your mortgage.

TELEGRAPHIC TRANSFER FEE – (£25-£50)

This needs to be paid to the lender to transfer the loan amount to the seller’s solicitor

MORTGAGE BROKER FEE – (£95-£495)

If you use a mortgage advisor to arrange your mortgage, you will need to pay a commission depending on the value of your mortgage.

VALUTATION & SURVEY FEES – Varying from £250 - £600

The cost of a survey can vary, the more basic survey often used on new builds can start at £250 up to a building survey, used for older and more unconventional buildings. These full building surveys are the more expensive starting around £600, but can save you money down the line should you find any structural issues.

HIGHER LENDING CHARGE – Approx. 1.5% of the amount borrowed

This is a fee that can be charged by lenders if you are borrowing most of the volume of the property

SEARCH: (£250-£300)

Your solicitor will contact your local authority to check for any issues that could affect a property’s value. When the local council can sometimes charge for these search’s and also request a drain search is carried out.

LEGAL COSTS – (£850 - £1500 + VAT)

This covers a range of work that your solicitor will need to carry out for you.

STAMP DUTY

Stamp duty land tax (SDLT) is charged on the purchases of all UK land and property over £125,000. The amount you will have to pay is based on the price of the house you are buying as well as if you have owned a property before. We have provided a quick breakdown below to help:

First home: In your first home, you are exempt on paying SDLT on the first £300,000 of a property up to £500,000. After £500,000 you will pay the tax below

£300,001 - £500,000 (5%)

Second home: For your second home or if you have owned a house previously you normally have to pay tax in larger increments
£0 – £125,000 (0)%
£125,001 – £250,000 (2%)
£250,001 – £925,000 (5%)
£925,001 – £1.5 million (10%)
£1.5 million+ (12%)
Further increases apply to additional properties you wish to own. These figures were accurate at the time of checks in 2017 but are subject to change and can be found at www.gov.uk/stamp-duty-land-tax/residential-property-rates

MOVING COSTS - £300-£600
Should you use a company to remove furniture and deliver to your new home, you can expect to pay anywhere between £300-£600, these figures will of course depend on the amount you need moving and the distant between properties.

REPAYMENT MORTGAGES:
Every month you make a payment which is calculated so that you pay off some of the capital you have borrowed, as well as the interest. By the end of your mortgage term, you would have repaid the entire loan.

INTEREST-ONLY MORTGAGES:
Each month you pay only the interest on your mortgage and repay the capital at the end of your mortgage term. This option will not suit everyone, as you will need to guarantee that you can find the money when the time comes. If you don’t, you risk having to sell your property to pay off the mortgage. Lenders can also insist that you provide evidence on how you intend to do this.

FIXED RATE MORTGAGES:
Popular with first time buyers, as you know exactly how much you’ll be paying each month for a particular length of time.
The disadvantages are that you may have to pay a higher rate if the interest rate falls, and a repayment charge if you either switch or pay off your mortgage before the end of the fixed term.
The lender will also automatically place you on a standard variable rate (SVR), which will probably have a higher interest rate, in which case you will need to apply for another fixed rate deal.

VARIABLE RATE MORTGAGES:
Also known as a Standard Variable Rate (SVR) and are every lender’s basic mortgage. The interest rate fluctuates, but never above the Bank of England’s base rate and is determined by your mortgage lender.

TRACKER MORTGAGES:
Vary according to a nominated base rate, normally the Bank of England’s, which you will pay a set interest rate above or below.

DISCOUNT RATE MORTGAGES:
Some of the cheapest mortgages around but, as they are linked to the SVR, the rate will change according to the SVR and are only available for a fixed period of time.
CAPPED RATE MORTGAGES:
A variable rate mortgage, but there is a limit on how much your interest rate can rise. However, as mortgage rates are generally low at present, many lenders are not offering them.

CASHBACK MORTGAGES:
Lenders typically give you a percentage of the loan back in cash. However, you need to look at the interest rate and any additional fees, as it is very likely that you will be able to find a better deal without cashback.

OFFSET MORTGAGES:
Combines your savings and mortgage together, by deducting the amount you have in your savings, meaning you only pay interest on the difference between the two. Using your savings to reduce your mortgage interest means you won’t earn any interest on them, but you will also not pay tax, helping higher rate taxpayers.

95% MORTGAGES:
Generally, for those with only a 5% deposit. However, as there is a risk that you may fall into negative equity if house prices go down, mortgage rates are usually high.

FLEXIBLE MORTGAGES:
Allow you to overpay when you can afford to. Other mortgages give you this option too, but you can also pay less at particular times or miss a few payments altogether if you have chosen to overpay. This does however come at a cost, as the mortgage rate will generally be higher than other mortgage deals.

An average mortgage is made up of the following costs but there are some others you need to remember should you wish to make a change to your agreement, the following should cost most of these points:

INTEREST
This is the amount this gathers across the lifetime of your mortgage and is an agreed percentage in your mortgage offer.

MORTGAGE FEE
This is the product fee which is charged when you take out your mortgage.

APPLICATION FEE
This is a fee that is charged with every application and is not refundable if you choose not to take the mortgage.

VALUATION FEE
This may be charged by your lender if they need to work out the value of your chosen property.

HIGHER LENDING CHARGE
This can be applied if you only have a small deposit.

TELEGRAPHIC CHARGE
This is a charge that a bank will apply when transferring money that is being loaned.

BROKER FEES
A charge for using a broker to arrange your mortgage.

EARLY REPAYMENT
This may be applicable to certain products if you wish to settle the total amount before the agreed term of you mortgage.

EXIT FEE
This may be charged is you wish to switch lenders.

MISSED PAYMENTS
If you miss any of your payments these can be charged and will increase the total of your mortgage.

Even with bad credit such as CCJ’s, arrears, debt repayment plans or if you have had to declare bankruptcy, you still have mortgage options available to you. Even though they are limited and will affect your rate of interest, our experts can help advise on the best path for you.

A mortgage application approval relies on you, the broker, lender and solicitor. But our red-carpet service means we handle the relationship between all parties and reduce as much stress and hassle as possible for you in the process. A key factor that you can influence is having the documentation we will need from you. Your advisor will make you aware of all the information we require from you at first contact.