Frequently Asked Questions
What does an Independent FCA regulated Mortgage Adviser do?
An independent FCA regulated mortgage advisor will find the best deal for you from the whole of the market, not a mortgage from a limited selection that suits them or the lender. Having assessed your needs and circumstances, they will paint a picture for the potential providers, so that you get the best mortgage deal for you and your family.
What kind of mortgage is best for you?
There are many types of mortgages that you can choose from, picking the best one is based on a number of factors:
- How much deposit do you have?
- What monthly payments can you afford?
- How long do you want the mortgage for?
- Have you got a good credit score?
- Do you want to be able to take payment holidays?
- Do you want to be able to over pay on occasion?
The answers to these questions will guide you to an option that best suits your needs. The core options include:
Variable – The simplest type of mortgage deal where the interest rate changes at the discretion of the lender.
Fixed – Your mortgage interest rate is fixed for a defined period so you can budget accordingly.
Discounted – The mortgage interest rate is lower than the lenders variable rate for a defined period but can change at the discretion of the lender.
Tracker – The mortgage interest rate will ‘track’ the interest rate set by the Bank of England.
Offset – Your savings will be taken into account when calculating your mortgage interest payment (if you draw on your savings, your mortgage payments will increase and visa versa).
What are my chances of getting a mortgage deal?
The better your financial circumstances, the better the chance you’ll have of getting a mortgage. To qualify for the very best mortgage deals, you would be well advised to let the mortgage advisor present your case for you.
Use our Mortgage Checklist Service to get a feel for what mortgage deal you could get. It’s free and easy to use.
How do mortgage deals differ?
As there are so many different mortgage deals out there, it’s difficult to know which is best for your needs. With some products, if interest rates rise, even marginally, your mortgage payments will increase. With others, if interest rates fall you may not benefit from the lower interest rate. This is where your independent FCA regulated mortgage advisor can help. They will analyse your needs against your circumstances to provide you with the most suitable mortgage deal.
Here’s a brief guide to what deals are available:
- Variable Interest Rate Mortgage: Interest rates can change at the discretion of the lender. Normally high mortgage interest rates. Avoid.
- Fixed Interest Rate Mortgage: Interest rate is fixed for a certain period. Good if you want to be sure of what your payments are going to be.
- Tracker Interest Rate Mortgage: Interest rate ‘tracks’ the Bank of England base rate at a pre-determined level. Great for people who want to take a chance on rates being low.
- Discounted Interest Rate Mortgage: A discount on the lenders Standard Variable Rate (SVR). Unpredictable as they are linked to the lenders SVR but can mean low rates and therefore lower mortgage payments compared to the lenders SVR. There is also the added benefit of mortgage payment reductions if rates fall which would not apply to fixed mortgage deals.
- Offset interest rate mortgage: A mortgage that takes into account your savings to calculate your mortgage interest payment. Ideal for people will unpredictable incomes, for example, self employed/high commission based sales people.
How do you choose the best mortgage?
This comes down to what type of mortgage best suits your circumstances. Your advisor will assess this by asking you a series of questions designed to establish what deal will suit your needs, so be open about what it is you want and what you have.
It normally boils down to what property you want to buy and what kind of mortgage is best for you.
What is a mortgage?
A mortgage is an agreement between you and a lender (normally a bank or building society) to borrow a sum of money in order to purchase a property. The amount you pay back depends on what mortgage deal you decide on but will usually include interest payments and fees.
Most mortgage deals will last between two and five years. When the term expires, most borrowers will ‘remortgage’ to a new deal otherwise they will default to the lender’s Standard Variable Rate (SVR), which normally means a higher mortgage interest rate.
How do I get the best mortgage deal?
This is where the independent FCA regulated mortgage advisor comes into the equation. The best mortgage deal for you will depend on a number of factors which the advisor will establish with you. This will include how much deposit you have, your attitude to risk, your credit score, the property you want, your income, your savings, your employment status, your age, your health…..the list goes on. The advisor will take all this information and legally obliged to offer you only the most suitable mortgage deal for you. This is why Whole of Market access is crucial.
Mortgage set up costs?
There are a number of aspects to taking our a mortgage with a lender. Most of thses aspects carry a fee. Your independent FCA regulated mortgage advisor can guide you through this and help you avoid unnecessary costs in the process.
Arrangement Fees: The cost of arranging the mortgage deal. This can vary depending on what sort of deal you have.
Valuation Fees: A mandatory process by the lender to establish that the price paid for the property is reasonable.
Product/Completion Fees: This is a charge for securing the mortgage deal you want.
Your independent FCA regulated mortgage advisor will help you mitigate, reduce or avoid these costs where possible.
What other types of mortgages are available?
Mortgages can be arranged for any type of property purchase. Depending on the circumstances, the rates and terms can vary tremendously so it’s always worth consulting with an independent FCA regulated mortgage advisor to get the best mortgage deal.
Residential mortgages: Where you are buying a home to live. Most mortgages are for residential purposes. Typically they can be repayment (interest and capital payments) or interest only (no capital so often an alternative repayment vehicle would need to be arranged).
Commercial mortgages: This is where you are buying a property to rent (buy to let mortgage) or buying a property for the purpose on carrying out a trade.
What amount can I borrow?
The amount you can borrow is based on a number of factors, such as your deposit, your income, your age, your health, the property you want to buy amongst others. This is where an independent FCA regulated mortgage advisor can help you tailor your application for the best mortgage interest rate deal.
What amount of interest will I pay?
This will depend on the type of deal that you agree to. Your independent FCA regulated mortgage advisor will be able to help you tailor a mortgage deal that best suits you.