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Professional Financial Planning is the process which aims to help you realise your ambitions - whatever they may be. As professional financial advisers we can help you make informed decisions about your financial future, short, medium and long term.Read More
Mortgages are loans which are intended to help buyers purchase residential and commercial property. When an individual takes out a loan, the lender charges interest: the same is true of a mortgage.Read More
Health Insurance is probably one of the most important types of insurance you can own. Without it, an illness or accident can have serious long-term financial implications for you and your family.Read More
When you retire you still need food and shelter as an absolute minimum, but of course you will want to maintain the lifestyle to which you have become accustomed, so unless you can guarantee a large inheritance or windfall, then you need to provide yourself with a secure income for the rest of your life.Read More
Often, people save for a specific reason and it's usually the safest way to build up a pot of money. It’s less risky than investing, but it offers limited growth. The most you'll earn on the money you save is the interest added. Saving is perfect for people who don’t want to take any risks with their money, and most savings accounts have easy access or are for a fixed term.Read More
All businesses are exposed to risks in their day-to-day operations. Without business insurance cover to provide protection against some of these risks, businesses would find it difficult to operate efficiently and profitably.Read More
Taxation can be very complicated and the rules, reliefs and allowances often change, so it is worth obtaining a clear grasp of how these taxes work by discussing with a professional adviser the most efficient way to arrange your finances.Read More
Equity release has to fit with your needs, circumstances and preferences, where the benefits need to outweigh the drawbacks and be more suitable than alternative methods of raising funds.Read More
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Introduction To Mortgages

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

Mortgages are loans which are intended to help buyers purchase residential property. When you take out a loan, the lender charges interest: the same is true of a mortgage.

A mortgage is a ‘secured’ loan, which means that the loan is secured against the property being purchased until the mortgage is paid off. Sources of residential mortgages include high street banks, building societies and other types of less well known financial institutions.

Basic conditions

Mortgage providers follow a set of rules and procedures when deciding whether or not they will agree to provide a mortgage to purchase a residential property. Although different lenders apply different lending criteria, the amount a potential buyer can expect to borrow of a property’s purchase price is determined solely by the mortgage provider’s requirements.

Here are some of the factors lenders take into account when making their decision:

Affordability

At the moment it is easy to lull yourself into believing you can afford the mortgage you need - mortgage rates are at all-time lows and feel easily affordable. However, you need to ask yourself if you can afford your mortgage payments if interest rates rise and whether you can repay the capital if house prices fall.

Let’s say you manage to find a mortgage with an interest rate of three percent, fixed for three years. That’s a great rate. After three years you find interest rates have gone up and the best deal you can now get is six percent. That’s an increase of three percentage points but, more frighteningly, your interest rate has increased by 100%. Will your net take home pay have increased at the same rate?

You should budget on the assumption that interest rates will rise during the term of your loan. So be sure you can afford your mortgage repayments when that happens, not just now.

Deposit

Lenders are no longer happy to take all the risk of buying your new home, and so do not lend 100% of the value of the property. If you are unable, in the future, to pay your mortgage, the lender needs reassurance that it can take your home and cover the loan by selling it. Less risk taking means lower loan-to-value (LTV) ratios, and personal deposits need to be larger than in the recent past.

You will typically need at least 5% as a first time buyer and commonly up to 20% to access the most competitive interest rates on the market.

The source of the deposit may come from your current property, savings, inheritance or a gift.

Be aware that deposit loans from family and friends can still not be accepted as a source of deposit by some lenders, or can influence how much they may lend you.

Valuation and Survey Fees

Before a lender will grant you a mortgage it will insist on a valuation to prove the property is worth what you’re paying for it. The size of the valuation fee will vary by lender and property value.

The basic mortgage valuation is for the lender’s benefit so that it feels comfortable lending against the property. You may feel you want to add a survey to the valuation that gives you a report on the general condition of the property.

If you are buying an older property, or one in a general state of disrepair, you may choose a full structural survey. This is a thorough survey that examines the structural condition of the property and gives you advice on repairs. Depending on the property expect to pay between £500 and £1,000.

Obtaining comparable examples in the same area and for similar property will help you obtain a benchmark.

Property type

Some properties such as flats over commercial properties, studio flats and ex-local authority premises can be viewed as having reduced future attractiveness and as such some lenders may not operate in that market. This may restrict your lending options.

Listed buildings (e.g. Grade 1, Grade 2) may have restrictions on how you can maintain or alter the property as well as buildings near to it (e.g. garage). Some unlisted properties can also be subject to similar restrictions (e.g. in an area of outstanding natural beauty).

Time frame

Mortgage providers generally have a maximum number of years over which they lend and will set a date when the mortgage must be repaid in full.

MORTGAGE ENQUIRY FORM

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