A mortgage is a type of loan specifically used to purchase property or land. It’s a long-term commitment, usually lasting 25 years or more, where the property you buy is used as security for the loan. This means if you can’t pay back the mortgage, the lender could take your home to cover the debt.
If you have had a mortgage application declined it is well worth getting in touch. There are many lenders that have a lower credit score requirement or can use higher income multiples.
The amount you can borrow is based on your income, credit history, current debts, and the value of the property you want to buy. Lenders use this information to calculate what they think you can afford to repay each month without financial strain.
If your savings are limited, you’ll need a larger mortgage, which might be harder to get. You’ll also need a deposit, typically around 5% of the property’s value as a minimum. There are sometimes lenders that will consider 100% mortgages but as you would imagine, the criteria for these is a lot more stringent, but always worth contacting us to discuss.
Having a poor credit history can make it more challenging to get a mortgage, but it’s not impossible. There are many lenders specialise in ‘bad credit’ mortgages, though these often come with slightly higher interest rates to offset the increased risk to the lender.
Missing a mortgage payment is serious and can lead to penalties or affect your credit score. If you’re struggling, contact your lender immediately. They may offer solutions like a payment holiday or adjusting your repayment plan. There is a lot of support out there for mortgage holders struggling to meet their mortgage commitments.
This process is called ‘porting’ your mortgage. Many mortgages are portable, allowing you to transfer your current mortgage to a new property. However, you’ll still need to meet the lender’s criteria at the time of moving, and there may be fees involved.
Yes, there are additional costs such as arrangement fees, valuation fees, legal fees, and possibly Stamp Duty Land Tax. These can add up, so it’s important to budget for them when planning your purchase.
Older borrowers can get a mortgage, but the options may be limited. Lenders will consider your age, retirement income, and how you’ll continue to make payments. Lifetime mortgages, a type of equity release schemes might be suitable alternatives.
You can usually overpay or settle your mortgage early. However, lenders may charge an ‘early repayment charge’ if you repay too much too quickly, especially during an initial deal period.
