Purchasing Your Home
Buying a new property is exciting and you will want to ensure that you get the property you have made an offer on. Putting together a quality team of property professionals can help to ensure that nothing goes wrong with the house buying process.
You should work with a mortgage broker and a solicitor that you know will get the job done efficiently and that will always be available to answer any questions you have. Fox davidson are that mortgage broker.
We provide independent mortgage advice which is important as it means we offer mortgages from the whole of the market.
The initial consultation with a broker at Fox Davidson is free. We want to be able to show you how we work, what service you will receive and ultimately the terms we can secure for you, before you commit to using our services.
If you choose to use Fox davidson we will handle everything from the completion of the application forms to the instruction of the property valuation and we will chase the estate agents, surveyors and solicitors on your behalf to bring about a swift completion.
You will benefit from one to one mortgage broker and administration support with happy people that are always contactable and have a can-do attitude.
What is a remortgage?
A remortgage is when you change your mortgage lender without moving home. The reason you may remortgage are usually to raise more money, secure a better rate of interest or to repay some debt.
Whatever your reason for wishing to remortgage Fox Davidson can help you to secure the best mortgage deals for your situation. We are an independent broker which means we access the whole of the market including second charge mortgage lenders.
It doesn’t have to cost you anything either… If you wish to remortgage we can usually secure mortgage deals with the mortgage lender meeting the cost of the property valuation and paying the solicitors costs.
Which mortgage am I eligible for?
- Home purchase mortgage – A mortgage secured on a house or flat for the occupation by yourself and/or your family.
- Re-mortgage – Changing mortgage lender usually to secure a better rate of interest. You might also remortgage to raise more funds for various reasons. See our remortgage guide for more details.
- First time buyer mortgage – If you have not previously owned a property you are classed as a first time buyer. Some lenders offer discounts on the fees and rates to first time buyers.
- Buy to Let mortgage – A mortgage on a property that you will let out to unrelated tenants, usually let on a 6 or 12 months assured shorthold tenancy (AST) agreement.
- Commercial mortgage – A mortgage for business purposes, this can either be for your business occupation or purchased as an investment and let to a separate business on a longer term lease.
- Second charge mortgage – Most lenders only lend on a 1st charge basis. A 2nd charge is possible for additional borrowing where you do not wish to remortgage.
The type of rate that you choose will depend on your attitude to risk and your future plans. These details and more will be considered by your mortgage adviser.
- Fixed rate mortgage – The rate of intertest is fixed. The terms lenders will offer vary from 2, 3 and 5 years with some lenders offering 10 year fixed rates.
The obvious advantage of a fixed rate is that your payments will be fixed each month. The disadvantage is that in a falling interest rate environment you will not benefit from the fall in rate.
Most fixed rates have an early repayment charge during the fixed rate period although lenders usually allow you to make additional payments of up to 10% each year without paying the early repayment charge.
- Tracker rate mortgage – A tracker rate mortgage will track either the Bank of England base rate (BBR) or the London Inter Bank Offering Rate (LIBOR). A rate that tracks one of these rates may go up as well as down.
- Variable rate mortgages – A variable mortgage is one that tracks the lenders standard variable rate. The lenders standard variable rate can be set independently by the lender.
- Discounted mortgage – A discounted mortgage will be a discount from the lenders variable rate for set period. After the discount, the rate will usually revert to the lenders variable rate.
- Offset mortgage – An offset mortgage is a sophisticated product. This will appeal to those with excess cash such as tax savings, bonus payments, inheritance which may be due, or money being kept aside for future home improvements to name but a few reasons. Your savings will offset against the mortgage balance and you will only pay interest on the net balance.
- Cashback mortgage – Lenders often add incentives to attract business and a cash back mortgage is one of those incentives. Cashback is usually paid on completion and can be used for any purpose. Your mortgage broker will work out the true cost of the cashback by also considering the interest you will pay over a set period and any fees you will pay.
- Flexible mortgages – Not as flexible as they used to be but flexible mortgages usually come with no early repayment charges and allow you to make lump sum payments into the mortgage without penalty. Some lenders will offer payment holidays in light of any overpayments. Offset mortgages are typically flexible mortgages.
Methods of repaying the mortgage
- Repayment (capital & interest) – This is the standard way of repaying any loan. You pay back the capital each month along with interest and at the end of the mortgage term the loan is repaid in full. This is a low risk way of repaying a mortgage.
- Interest only – Some lenders will allow you to only pay the interest each month. At the end of the mortgage term the initial loan amount will still be outstanding. Interest only mortgages are now harder to come by after a crackdown by the Financial Conduct Authority who were concerned that many homeowners would reach the end of their mortgage term and have no means to repay their loan other than to sell their main residence. Loan to value is normally restricted on this repayment type to under 75%.
- Part & part mortgage – This is a hybrid of the above 2 methods and can be utilised to gain a higher loan to value than simply having an interest only mortgage. Part and Part mortgages work well in the right situation and for the right client.
Using a mortgage broker has many benefits:
- Instant access to 1,000’s of mortgage products
- Advice from qualified, experienced mortgage advisers
- No time wasted applying to lenders that will eventually say No. We Apply to the right lender, first time.
- You get Access to Mortgage protection through Fox Davidson Protect at no additional cost.
The Mortgage Application Process.
- Application made to the mortgage lender
- Documents uploaded to the lender to support the application
- Application agreed subject to a survey
- Survey received back from the surveyors and assuming no essential repairs and the property valuation is acceptable
- Mortgage offer produced
- Solicitors work to draw down the funds and complete on the purchase or remortgage
Typically, Lenders will require:
- Proof of ID
- Proof of Address
- 3 Months Bank Statements
- 3 Months Payslips or 2 years Accounts/tax Computations And Tax Overview Forms for the self-employed
- Proof of Deposit for Purchases
Why Should I Remortgage?
To Secure a Better Rate of Interest
It is important to ensure that your finances are in order and ensuring you always have the best mortgage deal for your situation will save you money. You can look at remortgage option around 3 months before your current deal ends.
To Raise Additional Money
Lenders will lend additional money for many reasons including; money for a deposit on a second home or a buy to let, money for a new car or caravan, for weddings and for holidays.
To Repay Debt
If you wish to consolidate your loans into one mortgage then you can remortgage to repay debt including credit cards, loans and hire purchase. Your adviser will discuss substituting short term debt for long term debt and will ensure it is the right option for you.
Second Charge Mortgages
It is not always best advice to remortgage. If you are on a very low rate or have early repayment charges that make remortganing more expensive then you should consider a second charge mortgage.
What is a second charge mortgage?
A second charge mortgage is a loan secured on your property which sits behind the first mortgage lender. Second charge mortgage rates will be higher because in the event or repossession they take second place to the main mortgage lender. Second charges can be useful where the first mortgage lender will not lend you additional funds.
If you would like to discuss your mortgage options please call or email one of our qualified, experienced mortgage brokers. For face to face mortgage advice we have offices in Bath, Bristol & London or we can deal by phone, post and email.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.