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The 10 most common mortgage questions answered on how to get mortgage advice on the right mortgage for you.
The following are the most common questions you may wish to ask when looking for a mortgage. We are pleased to provide you with the answers and any further help.

 How do I apply for a mortgage?

Applying for a mortgage is not as difficult as many people will have you believe. However, before applying for a mortgage there are a few things you will need to consider. These include:

• What type of mortgage best suits your financial situation?
• What method of repayment is best for you?
• How much can you afford?

Our mortgage guide, along with our mortgage calculators, will help you answer these questions. Having decided what options are best suited to you, you can ask one of our financial advisor to discuss your requirements in greater details ~ Simply give us a call on 08704 10 11 12. The financial advisor will then research various mortgage lenders who meet your requirements and get the best and most suitable mortgage for you.

When applying for a mortgage the lender will require various documents in order to identify who you are and examine your credit capabilities. It is therefore a good idea to have these ready when you go to see about getting your mortgage as it will speed up the process of application and give you a solid understanding of what the lenders are willing to offer you. The most common items that your lender may request are as follows.

• Your passport and National Insurance number.
• Your employer's name and phone number.
• Proof of your monthly income including salary wage slip, pensions, alimony, investments, rental income, etc.
• Your monthly expenses including bills, bank account statements, mortgage payments, etc.
• Your assets including, bank account balances, deposits, property.
• Your liabilities including credit cards, car loans, other loans.
• Where applicable, the above details for your co-applicant as well.

There are numerous types of mortgages available and there may appear to be a huge number of options available to you however they are all constructed around the same key areas. In order to understand exactly what you're getting from the lender you should identify with 3 key headings. These include:

• Mortgage types
• Mortgage Repayment methods
• Mortgage Interest Rates

By understanding these and how they make up a mortgage you will have a better awareness of what is being offered to you and what is the best choice for you. These and all other aspects about a mortgage can be explained further by one of our mortgage advisers so simply give us a call on 08704 1011 12 and see what we can do for you.

In addition to the initial costs such as legal and valuation fees and mortgage administration fees you need to prepare to pay for monthly outgoings you probably never had before or proving more expensive than the last property you owned. These will include:

• the mortgage payment
• property taxes
• TV licence
• electricity
• gas
• oil
• phone bills
• utilities

If you don't budget for them correctly you may get a financial surprise later. Estimate realistically what your expected outlay will be each month. Overestimate rather than underestimate everything and you will have a good idea of what you can afford. Putting the time into calculating your monthly financial outgoings at an early stage can make life a lot easier in the long run.

The repayment period is the term over which you have to repay the property. The most common mortgage periods are 25 years, however it is possible to get longer terms, or indeed shorter terms, depending on your financial stability and the cost of your property.

Due to the increase in house prices it is now becoming more common for people to take mortgages over periods as much as 35 years. Bear in mind that this is a huge commitment and that you will pay much more interest than a shorter-term mortgage. You may also find yourself in negative-equity for a longer period of time especially on mortgages that exceed the true current value of the property. Negative-equity is the period of time that you owe more money on the mortgage than the property is actually worth.

There is no maximum for how many times you can remortgage your mortgage to apply for more funds or benefit from lower interest rate. You must re-qualify each time you apply with respect to your ability to repay and the value of the property may have to be re assessed depending upon the time you have been in the house and the loan sum secured on it.

There may also be clauses written into your mortgage contract that require you to pay an early repayment charge. Always seek professional financial advice before committing to anything you are unsure of. Simply give one of our mortgage advisers a call on 08704 10 11 12 and talk it over it could give you peace of mind.

ERC (Early Repayment Charge)

Early Repayment Charge is a charge made by your mortgage lender which is payable on certain types of loan. The charge is only applied if the loan is paid off or part-paid off within the specified early repayment charge period agreed with you at the outset of the mortgage being set up. This is possibly the downside of benefiting from the certainty conferred by fixed rate or the cheaper mortgage offered by a discounted rate Some lenders can lock you into a repayment charge so beware and get advice. If you see an incredibly good interest rate below the rate prevailing on variable rate the chances are they want something in return - your commitment, therefore it could mean it'll cost you a lot more if you decide to move lender in future.

Raising Funds for Home Improvement

DIY is becoming more and more popular whether it be making improvements to your own home, planning the next big project or watching many of the numerous TV programmes dedicated to helping us make the most of our properties. There are a number of ways by which to employ a cost-effective way of raising funds for home improvements.

Due to the buy now, pay later nature of our society, many people borrow what is needed for home improvements as opposed to saving in advance. There are many ways of borrowing the money you need for home improvements depending on the size or scale of your project.

For smaller projects, you may decide to use credit cards or perhaps an overdraft, however, for much larger projects e.g. a conservatory, a loan will be more suitable. Although personal loans can be easy to arrange and the term of repayment determined by you, the interest rates applicable will generally be higher than that of mortgage interest rates

This leads to the option of considering remortgaging. By switching your mortgage rate, you may be able to stay with your existing lender and see what they can offer you or move to another, more competitive lender. Not only may remortgaging help you find a lower rate of interest, but remortgaging also enables you to release equity in your property, as chances are your loan to value (LTV) will be lower than when you originally took out your mortgage. In other words, the value of your home in proportion to your mortgage debt will probably have increased.

This could be as a result of either the value of your property rising or that some of your mortgage has been paid back or indeed both.

Here is a Remortgaging Example: -

If you originally borrowed £95,000 on a property, which cost say £100,000, your loan to value (LTV) would have been 95%.

If you repay £5,000, leaving you with a mortgage of £90,000 and the value of your property has increased to £150,000, your loan to value (LTV) will now be 60%.

Therefore, your mortgage lender may be willing to allow you to release equity up to a certain loan to value (LTV) say 90%. So should you decide to fit a new bathroom or kitchen for the cost of say £10,000, and a conservatory for £15,000 you could increase your mortgage to £115,000, giving you a LTV of 76%. Although the main advantage of remortgaging is to release equity it is allowing you to repay your debt at a lower rate of interest than if you were to take out a personal loan, you should be aware that the extra money borrowed for home improvements will be repaid over the term of your mortgage, which may be longer than that of a personal loan. You may however have the chance to repay the loan off quicker if the mortgage product allows it and therefore eventually make up on the time and cost originally expected.

You should also remember to check that you are not tied into an existing deal, otherwise, you will have to pay that dreaded Early repayment Charge to switch your mortgage.

Finally some lenders are quite prepared to pay for or absorb the legal and valuation costs for you to move your mortgage to them therefore there can be advantages made at limited expense.

Give us a call today 08704 10 11 12 and allow us to simply assess the prospects your mortgage has for your future plans and ambitions for your property