FAQ's
Having been offering advice on Mortgages for the past 33 years, I have had numerous questions thrown at me! Here are some of the more frequently asked questions.
How much can I borrow?
This will depend greatly from lender to lender. Whilst some still work to a multiplier of income between 4.5 to 5 times your gross income, others will work to their own affordability models that are heavily structured around regular income and specific outgoings including travel, childcare and of course credit cards and loans. We will search the entire market to find the best deal for you both on rate and affordability.
Do I need a Decision in Principle?
Many Estate Agents will incorrectly tell you that you need a Decision in Principle (DIP) BEFORE you can put an offer in on a property. This is factually incorrect! You do not need a DIP until such time as your Offer has been accepted, as is stated in the Property Ombudsman Estate Agency Code of Practice 2019. Once you have had an Offer accepted then you can sit down with a Mortgage Broker to arrange a DIP. I do advocate that it makes a lot of sense to have a reasonable idea of what you can borrow, but prefer to wait until such time as the client has had their Offer accepted, then we can get the DIP and Application all flowing to the correct amount of loan required.
Which is better, Fixed or Variable rate?
This depends on what you are looking for! Fixed rates will offer stability of outgoings over whatever term you have fixed for which is usually 2 or 5 years but can be up to 10 years. Variable rates will fluctuate usually in line with the Bank of England base rate and can be advantageous if rates are predicted to fall for a number of years. Variable rates will expose you financially to the vagaries of the money markets and do need to be viewed with a degree of caution.
I am 53 years old, what is the longest term I can have my mortgage over?
Once again, this will vary from lender to lender! A lot of the ‘High Street’ lenders will restrict borrowing to age 70, but equally there are many of the regional Building Societies who have age limits of up to 80 and some with no maximum age at all! We can find the best deal that is going to work for you over the term that you want.
I have just cleared a CCJ will this prevent me from getting a mortgage?
It won’t prevent you from getting a mortgage, but it will mean that you will likely have to use a subprime lender which will usually mean a lower maximum loan to value, usually no higher than 80% and higher interest rates assuming you have only recently paid the CCJ off. If it has been repaid two or three years ago, terms will generally improve and after 5 years, most lenders consider you to be back in prime territory.
How long does the mortgage process take?
Every mortgage journey is different. Timelines will depend on your lender, the property, the length of any chain involved and your personal financial situation. I’ll keep you informed throughout and aim to make the process as smooth and stress-free as possible.
When should I start the remortgage process?
Ideally, start looking 6 months before your current deal ends. Many lenders will allow you to secure a rate up to 6 months in advance, protecting you against potential rate rises while still allowing you to switch if rates drop before your new deal begins. We check all deals for clients whose mortgages have been offered on a regular basis to ensure you will always have the best available rate from your chosen lender.
Can I borrow more for home improvements?
Yes, many people use remortgaging to release equity for renovations or debt consolidation. Lenders will reassess your Loan-to-Value (LTV) ratio, which could affect the interest rates available to you. We will of course advise you on your best options.
We lead very busy lifestyles and don’t have the time to do all the paperwork. Can you help?
Whether you are buying or remortgaging, we always handle ALL the application paperwork and deal with the lenders for you. We will also stay in regular contact with the solicitors and will keep you updated throughout the process right through to completion.
You may have to pay an early repayment charge to your existing lender if you remortgage.