FAQs

Reliable mortgage advice

At MortgageFinders Ltd, we have years of experience in the business and offer expert mortgage advice for clients throughout Exeter and the neighbouring areas.

Get in touch with us today for more information about our range of services. For a better idea about our service, please browse through our legal details.
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General

What is a mortgage?

A mortgage is simply a term for a loan secured on a property.

How long are mortgages usually for?

The mortgage term is the length of time you have to pay back the loan plus interest that you borrowed. Many people choose 25 years but you do not have to stick to this and the term could be shorter or longer. We can help you decide on the best term for your needs but remember a shorter term will of course mean that you are debt free earlier whereas if you choose a longer term, although a repayment mortgage is cheaper each month, you will not become debt free for a very long time and you certainly need to carefully consider how you might pay for the mortgage when you want to retire.

How much can I borrow?

This mainly depends upon 4 factors - i.e how much you earn, how much the property is worth, your credit history, and how much you can actually afford. These days most lenders operate on an "affordability basis" as opposed to using mere multiples of your earnings for example they take into account your other commitments such as household bills, other loans, maintenance payments etc. Every lender has different criteria and takes a different view so talk to us to find out how much lenders are likely to lend you.

What is a guarantor mortgage?

If you are struggling to get a mortgage based upon your income it may be possible to utilise the income of a guarantor in order to increase the amount of loan they lender is willing to grant you. A mortgage guarantor is someone who promises to take responsibility for your mortgage. If you default on your mortgage they will be obliged to make the mortgage payments. This is a legal commitment and lasts until the end of the mortgage term or the lender is satisfied that you can cover the full loan yourself.

Who can be a guarantor?

It is most usual to ask a parent or guardian to act as guarantor, but any relative or even a long-standing friend can act. To be acceptable to a lender they must prove they have enough disposable income after paying their own mortgage and commitments to meet your monthly payments.

Can we apply in joint names?

If you’re taking out a mortgage with your spouse or partner, i.e. on a joint applicant basis, you should remember you’re both normally liable for the full amount of the mortgage loan until it has been repaid. This is commonly referred to as ‘Joint and Several liability’. MortgageFinders can explain in more detail how this works.

Can MortgageFinders help us actually apply for a mortgage?

Once we have agreed the best product with you we can usually use the information that you have provided to apply directly to the lender on your behalf and we do this for free. More and more lenders have online portals to which we have access and this allows us to quickly process the application for you although there are usually some forms and declarations for you to sign which we will send to you by post.

Will MortgageFinders keep track of the application once it has been submitted?

We follow your application right through from start to finish and tackle any problems which arise on the way. We will contact you by email or phone to let you know of progress and whether we need more information from you. Our commitment to you never stops even when the mortgage money has been paid out - see our Customer Charter.

Do MortgageFinders really not charge me anything?

MortgageFinders are able to provide a fees free advice service because we chiefly operate over the telephone. This not only means that you really do not have to pay us a penny, but it also means that we can make appointments to talk to you at any time of day to suit your busy life style and needs. In a way it is like being able to talk to a solicitor and receive expert advice without being charged.

If you do not charge a fee how do you get paid?

MortgageFinders receive a fee from the chosen product provider if and only if we arrange that product for you. Our advice, help and service to you does not cost you a penny. Providers are happy to pay the fee to us direct as we effectively do some of the processing for them - example when we apply online for a mortgage on your behalf.

First time buyers

How much deposit do I need?

These days you need to save at least 10% as lenders no longer issue 100% or even 95% loans. This means that typically most people need to save between £10,000 and £15,000 in order to get onto the property ladder. Remember that you will also need additional funds to cover the expenses of buying a house - see our costs page for more information on these costs.

Do I need to find a property first before we talk to you?

No - in many ways it is better to talk to us first f you are thinking of getting onto the property ladder. We can let you know how much you can borrow and give you an idea of the target property value you should be looking for. Of course if you have a property in mind we can help you get a decision in principle certificate to assist you with making an offer for the house or flat.

Will I need to pay stamp duty?

At the present time the stamp duty threshold for land tax is £125,000. If you buy a house costing less than this you will not have to pay any stamp duty. See our costs page for more information on this.

What type of property is acceptable?

Most property is acceptable but one of the key things to remember is that mortgages are easier to obtain if a house is "freehold" but for flats provided it is "leasehold" (with a long term lease). Also if the property is constructed with normal materials then that helps as well. If your property is outside of these criteria please talk to us as we will need to narrow our search to specific lenders who will accept such properties.

What proof do you need of my identity and income?

Each lender has different requirements and then again they vary depending upon the product and the applicant. However, typically, the documents you might need to provide include: last 3 months payslips; bank statements; proof of identity; proof of address; proof of deposit; existing mortgage statement (if applicable) and business accounts if you are self-employed.

We will ask you to send us the original documents (the lender requires that we verify that we have seen the originals), which we will copy and return to you by recorded delivery. We aim to get your documents back in the post to you the day after we receive them, so you shouldn't be without the originals for more than a few days.

Remortgages

When is the best time to start to consider remortgaging?

We usually recommend that you start to look at your remortgage options about 3 months before the end of the initial rate period of your existing deal. That gives you long enough to find the right deal if there is one and move the loan to the new lender so that the new mortgage starts before you revert to your lenders standard variable rate. It is usually not cost effective to move your mortgage whilst you are still in the early repayment charge period as you will incur a penalty in doing so which could wipe out any saving made. If you feel you need to, please talk to us so we can help you work out the maths.

Is it always the right thing to do?

This depends upon many things. You should only remortgage to another lender if you are going to be better off as a result. As we state above, it is not a good idea to move whilst you are still in the early repayment charge period and even after this any saving depends upon the rate of the new deal and the fees that are associated with the new mortgage including any legal fees you may have to pay. MortgageFinders will work this out for you so that you have a clear view of whether the remortgage is a good idea or not.

Is it better to stay with my current lender?

Many lenders now offer new terms to existing borrowers at the end of the initial deal. These are often attractive as you will not have all of the costs involved in remortgaging. MortgageFinders will conduct a personal comparison for you so that you can see if it is better to stay with your current lender. The other thing to consider is that in the current climate most lenders standard variable rate is quite low so for many people coming to the end of their initial deal will not be a big issue and indeed many people may choose to stay on that rate for a while.

Buy to Let

Are you a first time Buy to Let investor?

Over the past few years many people have decided that investing in property is a good way of building wealth. Whilst this can be true, many also come unstuck and the arrears rate and repossession rate on Buy to Let properties is much higher than the norm. What happens if you lose your tenant and you have to find the mortgage interest? For this reason a number of lenders either do not lend to first time investors or if they do they demand that you have a minimum amount of income to support the mortgage as well as the rental coverage you need.

How much deposit or equity do I need for Buy to Let?

Ideally you need at least 25%, although there are 1 or 2 lenders who might consider 20%. As with ordinary residential mortgages, the more deposit or equity you have the better the interest rate you will be able to obtain.

What is rental coverage?

Lenders are looking to ensure that the rent you are going to receive each month for the property exceeds the amount you must pay on the mortgage when calculated on an interest only basis. In some case this minimum rental amount can be as much as 150% of the mortgage payments. 

What must I legally do as a landlord?

The whole area of Buy To Let is a legal minefield. You must consider the tax implications of course but you must also bear in mind that you have legal responsibilities towards your tenant(s). These include recent Government backed initiative such as the Tenancy deposit scheme which is designed to ensure that the tenants deposit is protected. For a guide to your legal responsibilities talk to MortgageFinders.

Are Buy to Let mortgages regulated?

Most Buy to Let mortgages are not regulated. This means you may have less protection if things go wrong. However the Financial Services Authority do regulate those Buy to Let Mortgages where the property is to be rented out by members of the borrower's family. Because of this, some lenders do not accept applications on regulated Buy to Let cases. 

What is the maximum number of tenants lenders accept?

Most lenders are happy to allow up to 4 tenants on a buy to let application, provided that they have all jointly signed a single Assured Short-hold Tenancy agreement (AST) and do not form 2 or more households. The AST gives you and the lender protection in the event that you need to evict a tenant, hence the reason why lenders do not like too many tenants. If you wish to rent out your property to more than 4 tenants or the tenants form 2 or more households the property may be treated as a House in Multiple Occupation (HMO) and this requires more specialist underwriting and will restrict the number of lenders and schemes available to you. 

Types of mortgage

What is a fixed rate mortgage?

A mortgage where the interest rate is fixed (ie it doesn't move up or down) for a set period of time.

What is a variable rate mortgage?

Unlike a fixed rate mortgage a variable rate moves up and down with interest rate movements and is under the control of the lender. It is usually known as the lenders normal standard variable rate. See also Tracker mortgages and Discount mortgages.

What is a tracker mortgage?

A mortgage with an interest rate that is usually linked to the Bank of England base rate (however it might be a different rate measure) which is set independently from the lender and therefore moves up and down with it accordingly.

What is a capped mortgage?

A mortgage that has a maximum limit on the interest rate you'll have to pay during a special deal period

What is a cashback Mortgage?

A mortgage that comes with a cash sum - often a percentage of the amount you are borrowing. The feature is often used by borrowers to pay towards their legal costs.

What is a collared mortgage?

A mortgage with a minimum interest rate that you will pay. Some trackers are collared ie if the independent rate the mortgage is linked to falls too far then once it reaches the "collar" rate the rate will not fall further.

What is a discounted mortgage?

A variable rate mortgage with a discount for a set period after which the rate will of course increase

What is a droplock mortgage?

This is a variety of variable rate mortgage (ie either tracker or standard variable) where you have the ability to switch to a fixed rate during the initial period without any penalties. This is best used when base rates are low with the option to switch to a fixed rate when rates start to increase.

What is a Graduate or Professional mortgage?

These are mortgages aimed specifically at graduates and professionals such as teachers, lawyers, and doctors which offer better terms and conditions than standard loans.
Come to MortgageFinders Ltd for mortgage advice in Exeter, Dorchester and the surrounding areas.

Call us now on 0800 60 20 20

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