Things to know about mortgages…
Deals that tie you in to the variable rate after your initial deal finishes
High repayment penalties if your future is uncertain
High rates to get cash back
High booking fees and potential hidden fees.
Lenders Arrangement Fee
To get the premium rates the lenders will include a booking fee. For larger loans this will make sense but not so much for smaller loans. You can add the fee to the loan but will then pay interest on it for the life of your mortgage. We can crunch the numbers to see what makes sense for you.
This fee is now covered by most lenders for both purchases and re-mortgages and it so that the lender has the peace of mind that the property you have is worth the risk of having mortgage attached to it. This will include the structural integrity, and if you buying a house it should be just as important to you. There are various types of valuation which we are happy to go through with you from basic, homebuyers to full structural. The one you get for free is only the basic one though.
Higher Lending Charge
This is uncommon in this day and age but the lenders have the right to charge a higher lending fee or mortgage indemnity fee for higher loan to values to reassure themselves in case of a market down turn
Early Repayment Charge
As you decide on what deal you want you will want to understand the cost of repaying the loan within the deal time. These tend to be higher for longer fixed rates. The penalties can be quite high with 3% of the total loan being a good yard stick.
But, you normally have a portability option, which means if you want to more house you can port your mortgage with you subject to the lenders criteria and not pay any penalty. Tis is know as porting a mortgage.
You will need a solicitor to act for you and your mortgage lender. In simple terms the solicitor makes sure the person selling has the legal right to sell you the property and that you will be the new legal owner. They will also do searches in the local area to check the property your buying is good security for the lender and for you. You wouldn’t want to buy in Cornwall and find your new house is built on top of an old mine shaft, would you? The solicitor will also ensure the stamp duty is paid and pass it on to HMRC for you.
We have solicitors that work closely with us, if you would like a quote, please ask.
HOW IS YOUR MORTGAGE REPAID?
The longer term you take your mortgage over the more slowly you will pay it back, the more interest you will pay but your monthly costs will be lower too.
Depending on the term you set and your age the rate at which you repay your mortgage will change.
Each month you will have to pay the interest part of your mortgage, everything you pay above that will reduce your mortgage balance.
Traditionally mortgages reduce slowly in the early years and more quickly in the later years. This is only because the debt balance is lower, so for the same given monthly payment less, is on interest, therefore more goes towards paying the mortgage debt.
If you set regular over payments, your debt will reduce more quickly.
With our support, you can take your time, compare and discuss different mortgage combinations, generating a shortlist from literally hundreds of mortgage products on the market.