Mortgages F.A.Q. What is a mortgage?
A mortgage is a loan, from a bank or building society, that is secured against your property. How do I get one?
In order to take out a mortgage you need to approach a bank or building society. Many home-buyers use mortgage brokers such as the Best Deal 4 U to help them find the best deal to suit their circumstances. I'm self-employed, can I get a mortgage?
In the past many high-street lenders spurned the self-employed who cannot provide a full set of accounts. However, there are now lenders who specialise in this type of business. The overall cost for comparison is 9.0% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 17/12/2008 I have a bad credit rating, will anyone lend to me?
The same lenders that provide mortgages to the self-employed may also lend to people who have suffered financial problems in the past. However, beware, these mortgages may not be as competitive as for those with no credit problems and it’s important to seek independent advice from a broker such as the Best Deal 4 U. The overall cost for comparison is 10.0% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration. Rate correct as of 17/12/2008 How much can I borrow?
This varies from lender to lender and is based on your individual circumstances. Traditional methods used by most lenders include a multiple of between 3 and 4 times your annual gross salary but it also depends upon other financial commitments you may already have. Must I visit every bank and building society myself?
You may find the perfect mortgage for you at your local bank orbuilding society. However, shopping around could land you with a much better deal. One way to do this is to check out websites such as www.thebestdeal4u.com or the mortgage tables of Sunday newspapers. However, be aware that headling rates may not be all they appear to be so it’s best to get independent advice. What does a mortgage broker do for me?
Mortgage brokers source the market to find the most suitable deal for you. A good mortgage broker saves your shoe leather and can save you money. They should take time to find out about your individual circumstances. Some mortgage brokers may only have a restricted panel of lenders so make sure you speak to one who covers the whole of the market, such as Best Deal 4 U. How do mortgage brokers get paid?
Some of them charge you an up-front fee or a completion fee. Some lenders also pay arrangement fees to mortgage brokers to encourage business. Any fees you will be charged will be fully outlined on a Key Features Illustration (KFI) document prior to any agreement from you to proceed. If you do decide to do business with us we will provide you with an Initial Disclosure Document What is the standard variable mortgage rate?
The standard variable rate is just that: the lender's standard rate. It goes up and down in line with economic conditions. The advantage of taking out a standard variable mortgage is that you are not tied in to the mortgage for any time and will not be charged redemption penalties if you sell up or remortgage. What are discounted, capped and fixed-rate mortgages?
Many first time buyers don't want the uncertainty of the standard variable mortgage rate and choose an offer fixing their mortgage to a certain rate for a number of years. Other variations on this theme include the discounted mortgage option where mortgage lenders offer a discount off the standard variable rate. Some lenders also offer capped rate mortgages where your interest is guaranteed not to rise above a certain pre-set level. What are cashbacks?
Cashbacks are lump-sum payouts by banks and building societies to borrowers as sweeteners to get their custom. A cashback, which is usually paid at the start of the mortgage, can be useful to pay for legal fees, stamp duty, moving costs, etc. But the lender will recoup the payout over the term of the loan and remortgaging can be difficult due to redemption penalties so again you need to seek independent advice to ensure any deal is suitable to your individual needs. I keep reading about redemption penalties. What are they? These will be charged if you cash in a fixed, discounted or capped-rate mortgage in the first few years. Redemption penalties are usually a few months' interest, which can run into thousands of pounds. Redemption penalties can also be charged if you try to pay off a portion of the loan early. What are application and valuation fees?
These are fees many lenders charge at the beginning of a mortgage. The application fee is a sum of money charged by the lender to consider your application and the valuation fee is usually the cost to the lender of having your house or flat valued before offering a mortgage. What are Higher Lending Charges?
These are fees, often demanded by lenders if you borrow close to the value of the property you wish to purchase or remortgage. They guarantee the lender against a loss if the property is repossessed. But they give the borrower no insurance cover whatsoever. Higher Lending Charges are required by most lenders on loans of more than 75 per cent of the value of the home. Many lenders allow borrowers to add this fee to the cost of the loan. Unlike other insurance policies, the house buyer cannot shop around for a low-price Higher Lending Charge Fee, because this is a contract between the lender and the insurance company. Do I need life insurance?
It is not mandatory but most people do take it out so that their mortgage is paid off if they die. It can prove very helpful for your family in the event of the worse happening. Do I need Critical Illness Insurance?
It is not mandatory but most people consider taking it out so that their mortgage is paid off if they suffer from a specified list of critical illnesses such as Cancer, Stroke, Heart Attacks etc.. It can prove an extremely helpful contract if you do fall critically ill. Must I buy the lender's buildings and contents insurance?
Not always, so check the fine print. If you are forced to take buildings and/or contents insurance it is often only for one or two years - after which time you can switch to a cheaper insurer. I'm no longer happy with my mortgage, can I remortgage?
Yes and it can be easier than changing bank accounts. There is some legal work involved, but many mortgage brokers package the remortgage process. Beware if you've had a fixed, capped or discounted mortgage in the last five years. You may still be subject to redemption penalties. | 
