Why do I need a broker, can’t I just go to my bank?
The main advantage of using a broker as opposed to your own bank is the access to a wider choice of lenders, independent advisers can access the whole of the market where as banks will only offer their own products which may not necessarily be the best suited to you.
What is a capital and repayment mortgage?
A repayment mortgage is a term generally used in the UK to describe a mortgage in which the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest, so that the amount borrowed decreases throughout the term and by the end of the loan term has been fully repaid.
How do I arrange a Decision in Principle?
The initial stage in mortgage application process can be known as; Decision In Principle (DIP), Agreement In Principle (AIP) or a Mortgage Promise… they are all the exact same thing.
Your broker will be able to arrange a DIP for you. They will learn about you and your requirements and apply on your behalf to a suitable mortgage lender. All being well the lender will provide you with a certificate which you can present to Estate Agents to prove you have been accepted in principle for a mortgage.
How much can I borrow for a Mortgage?
‘How much can I borrow?’ is the most common question asked by people looking to raise a mortgage.
The answer is not simple, it involves multiple personal factors on income and expenditure as well as varying lender criteria. In April 2014 the F.C.A released new regulation called the Mortgage Market Review (MMR). This regulation tightened up affordability checks and put more responsibility on mortgage lenders to ensure borrowers could afford the mortgages they were taking out. Since MMR lenders hide behind affordability calculators which ask a range of questions relevant to their criteria and then produce a maximum mortgage amount.
Your brokers job is to find out all they can about your income and expenditure and research the market to find a mortgage suitable for your needs. We have a handy affordability calculator on this site (click here) which will give you a very rough idea of what could be a reasonable expectation but please ask your broker for a more accurate figure as this is just to be used as a ball park guide.
Every lender has their own criteria when it comes to what they will and will not accept for income. Some lenders will look at and take 100% of your bonuses, overtime and commissions into consideration while others may only take 50%. It is also common for lenders to have varying opinions on your expenditure, some will take pension payments and child care costs into their calculations while others will ignore them and have built it into their calculations already.
Due to the complex nature of affordability we would always recommend taking Independent Advice on your situation.