Frequently Asked Qs
There are 4 main categories of fees to be aware of.
The first is the lender’s fees. The majority of lenders charge a product fee, which in most cases can be added to or incorporated within the loan, rather than paid upfront. Product fees may be a set amount , eg. £999, or a percentage of the loan, eg. 2%. Some lenders offer incentives such as a free standard (Level 1) valuation, whereas others charge a valuation fee. Where a valuation fee is charged, the fee is typically linked to the property value (the higher the value, the higher the valuation fee). Some lenders charge an application fee, although this is less common.
Brokers often charge a fee for their services, namely positioning a mortgage application and achieving a mortgage offer. Some will charge a fixed fee, others a percentage of the loan amount. This may be payable on application or offer, or structured in a bespoke manner. A broker should clearly state their fee structure from the outset.
Solicitors or conveyancers will charge fees for their services. Some lenders handling remortgage applications may offer free basic legals, saving you this expense. For all purchase applications, the applicant(s) will need to instruct a solicitor / conveyancer and they will be responsible for these legal costs.
Lastly, Stamp Duty and Land Tax (SDLT) is payable on the vast majority of property transactions in the UK. Your solicitor will be able to provide an estimate of your SDLT costs. First time buyers may qualify for SDLT relief. The SDLT calculator can be located here: https://www.gov.uk/stamp-duty-land-tax
Much depends on the complexity of the case and the lender’s service levels, but standard residential purchases and remortgages are often around 2-3 weeks. Specialist cases, including expat, may take 4-6 weeks to achieve an offer from the point of application.
There are many factors determining this, including loan amount, interest rate, term (how many years the mortgage is over), whether you are on a repayment or interest only mortgage etc.
Lenders typically allow up to 10% of overpayments per year without incurring fees. This is calculated against the loan balance at the start of the year, ie. if your loan was £100,000, you’d be allowed up to £10,000 of annual overpayments. If you exceed this amount or repay the loan in full, early repayment charges (ERCs) are payable. If you wish to make overpayments, you might opt for a single lump sum overpayment or alternatively a regular monthly overpayment by adjusting your direct debit. Most lenders will then give the option of reducing your future monthly repayments / keeping the mortgage term the same or keeping the monthly repayments the same / reducing the mortgage term.
A significant number of lenders now take employed / self-employed income on residential mortgages up to the age of 70. Some can consider a maximum age of 75 for those in non-manual roles. If you have strong evidence of other income in to retirement, eg. pensions, property income or managed investment funds, some lenders will go higher still. For investment properties, some lenders do not have maximum ages.
Following a regulatory review of post-2008 lending rules, many lenders now offer enhanced income multipliers to support first time buyers, with some offering loans at up to 5.5 or 6x income. Some stipulate longer term fixed rate products, eg. 5 year fix.
Proof of ID (passport or driving license)
Proof of Address (utility bill, credit card statement)
Bank Statements (1-3 months)
Evidence of Income (1-3 months payslips, employment contract, tax returns)
Proof of Deposit (savings statements, gifted deposit letter)
Proof of ID (passport or driving license)
Proof of Address (utility bill, credit card statement)Bank Statements
Bank Statements (1-3 months)
Evidence of Income (1-3 months payslips, employment contract, tax returns)
Proof of Deposit (savings statements)
Proof of Lettings Income (tenancy agreement, rental appraisal)
Company accounts (if limited company application)
Portfolio information
This is entirely your call, but unless you have a strict deadline you are working to, it may make sense to hold off on formally instructing solicitors until you have a formal mortgage offer. You will otherwise be liable for the costs of any legal work that has taken place.
Most mortgages require at least a 5% deposit, but there are some lenders currently offering 100% loan to value (LTV) mortgages. With this type of mortgage, your guarantor is often jointly liable for the loan. They may be required to deposit money – typically 10 to 20% of the property value – in a desginated savings account, which cannot be withdrawn until the end of a set period, often 5 years. The rates are often higher, there may be a risk of negative equity if house prices fall (property is worth less than the amount you’ve borrowed against it) and the friend or family member may find it harder to secure future credit. A Joint Borrower Sole Proprietor (JBSP) mortgage may be the right solution if a family member or friend wishes to support you in securing a mortgage, but does not intend to be a legal owner of the property. Independent legal advice is required to proceed with a JBSP mortgage as both applicants are jointly liable for the mortgage, however only one party has legal ownership. Discussing your requirements with a mortgage broker that has knowledge and experience of this type of lending is advantageous.
With most lenders, the biggest factor is the rental income – either received at present or projected on completion. For buy to let (BTL) properties, lenders will want to see a copy of the Assured Shorthold Tenancy (AST) agreement, or alternatively, a letter of rental appraisal from an ARLA approved letting agent, to determine loan capacity. You are often able to borrow a larger sum if electing for a 5 year fixed rate product over a shorter fixed or discount rate product. Personal income can sometimes be used to achieve a greater loan through “top-slicing”. Most lenders calculate loan potential on holiday lets by means of a short term lettings appraisal, again from an approved agent. This will need to state the average weekly rate in the low, mid and high seasons.
Yes you can attain a mortgage if you are self-employed. Many lenders want to see a minimium of 2 years of self-assessed tax returns, from which they will take the lower or the average of the two years. There are some lenders who can consider just one year of accounts, but they may wish to see the application supported by an Accountant Reference or projection of the current year.
There are a number of sub-prime lenders that support clients with aspects of adverse credit. A mortgage broker will be able to assess your latest credit report to determine the lending options available to you, which may be at higher rates of interest.
This comes down to personal preference. If you want stability and predictable payments, fixed may be best. If you are willing to accept the interest rate payable may move up or down, a variable rate deal may be more suitable. Much depends on your risk tolerance and plans in the years ahead. A skilled mortgage broker will be able to talk you through the pros and cons of both.
Subject to affordability and loan to value limits, this is possible. Additional funds may be used for the purchase of property, home improvements, debt consolidation or gifting.
Yes, there are a number of lenders who welcome applications from UK nationals resident overseas.
Yes, there are a number of lenders who welcome applications from foreign nationals with no indefinite leave to remain.