Your home may be repossessed if you do not keep up repayments on your mortgage.
How Much Will It All Cost?
Whilst you can use the equity you have in your current home, you may also need to use some of your own money to put towards a deposit on your next one. There are many factors on affordability, but you typically need to stump up at least 10% of the purchase price, preferably more if you can.
As well as your deposit, there are other costs associated with buying a property and taking out a mortgage. Typical ones that apply to most buyers include:
Conveyancing fees, typically between £850 – £1500
Stamp Duty Land Tax/Land, which is upwards of 2% of a property valued above £125,000
Valuation fees, which are often between £200 – £600
Land Registry fees, which are between £20 – £900 depending on the value of your property.
If you hire removal men, the typical cost is £50 – 60/hr.
There are often unexpected costs that crop up in buying a property so it makes sense to have some money aside as a contingency.
These are example prices and may vary.
How Much Can I Borrow?
To get an indication, we can simply have a chat to discuss your circumstances, your income, basic salary and any regular overtime and bonuses, to gain a better understanding of your affordability.
We'll chat to you about your regular outgoings, like credit cards or personal loan repayments and we'll deduct these from your income. This allows us to see how much you can afford each month.
Lenders also use credit scoring to help them decide whether to lend you money
Things To Consider Before Getting A Mortgage
Mortgages can last for a long time, so it’s important you get one that’s right for you – and we can help you find it. We will help you find what type of loan you want, how long you want it for and what type of product you’d like.
There are many different types of mortgage product nowadays, but the most common are fixed rate, tracker and Standard Variable Rate (SVR).
Fixed rate locks you in for a rate over 2-6 years (sometimes more) and doesn’t fluctuate, regardless of the Bank of England base rate.
Tracker rates literally track the BoE base rate, with the lender applying a set % on top. So if the base rate was 0.75%, the lender may add 1.25% so you pay 2% on your mortgage. Should the base rate go up to 1%, your rate would increase in line to 2.25%.
SVR changes on the lender’s discretion. It doesn’t track the base rate like a Tracker mortgage, but it is a factor, amongst other things, in determining the rate.
You will also have to consider the mortgage term too. There are mortgage terms of up to 40 years available:
A longer term reduces your monthly payments, but increases the cost of credit as interest is applied over time, so you pay more overall.
A shorter term increases your monthly payments, but as you’re paying over a shorter period, you pay less overall on your cost of credit.
Loan To Value
Loan to Value – (LTV) is expressed as a percentage of the purchase price being covered by a mortgage. Assuming you’re moving to a £200,000 house and have £50,000 to put down, that’s a 25% deposit and 75% LTV. LTV is important as the lower it is, the better the interest rate you will be offered.
What Insurance Will I Need
It’s a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar, fixtures and fittings. It’s also a good idea to take out contents insurance as well – this protects all your possessions in your home, from furniture to jewellery.
You may want to look into insurance to protect your mortgage with Life Cover and Critical Illness Cover, which we can help provide.
Why Choose Us
We pride ourselves in delivering the best mortgage and protection advice in the clearest and accurate way, so all our clients understand the process they are transacting with absolutely no grey areas.
We have access to thousands of mortgages and will search the market to ensure we find you the most suitable mortgage to match your circumstances.