Frequently Asked Questions & Answers
A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer. The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.
We can speak to you on the phone. However, we would prefer to come and meet you at home and discuss your mortgage requirements in an informal and relaxed setting. Alternatively, if time is of the essence, we can visit you at your place of work.
A face-to-face meeting ensures that we truly understand both your needs and aspirations, and enables us to identify the most suitable mortgage for you.
There are many different sorts of mortgage to choose from with varying features and benefits. Some of the more common types include:
•Standard variable rate (SVR) mortgages
•Fixed interest rate mortgages
•Tracker rate mortgages
This will depend on your circumstances and the mortgage provider. While ‘100% mortgages’ – where you can borrow 100% of the property’s value – have now almost entirely disappeared, it’s still possible to get a 95% mortgage, where you pay a low deposit of 5% of the property’s value.
Government schemes like Help to Buy, shared ownership and Right to Buy can also help you access a mortgage with lower up-front costs.
But many lenders ask for a 10% deposit or more, and many tend to save the best rates for borrowers with a deposit of 25%.
That means you’ll have to save for a deposit, as borrowing a deposit usually isn’t an option.
This is the most popular type of mortgage where the borrower pays the lender a monthly payment which covers the interest charged and repays the loan over a set term – usually between 20 and 30 years initially in the UK – until the capital and the interest is repaid.
With an interest-only product, the borrower repays the interest charged against the loan for the term but doesn’t repay the capital itself. At the end of the fixed term, the capital remains to be paid and it’s expected that methods such as savings or investment plans will have been put in place by the homeowner to cover the debt.
Interest-only mortgages are now far less common than they used to be for residential home purchases, although they’re still commonplace for buy-to-let mortgages.
Please note that Black Swan Financial Services Ltd does not offer investment advice, and should you require such advice you should consult an independent financial adviser or other suitably qualified professional.
LTV stands for loan to value and the ratio is the amount of the mortgage expressed as a percentage of the property’s value. The lower the LTV, the greater the equity in the property. The LTV is one of the considerations taken into account by lenders when you apply for a mortgage.
It’s important to consider all the fees and costs of buying a home before you apply for a mortgage.
Some lenders charge an arrangement fee to cover the cost of setting up a mortgage. On top of this, the lender may charge a booking fee upon application and this is usually non-refundable, even if the mortgage doesn’t go ahead.
You’ll sometimes have to pay a valuation fee and legal fees as well to cover the lender’s conveyancing costs – these will be in addition to paying for your own conveyancing work and any other surveys you get to assess the property’s value.
Other fees could be Early Repayment Charges, Broker fees and Stamp duty our adviser will take you through this at the first meeting.
Sometimes some or all of these fees can be added to your mortgage debt, but this will work out more expensive in the long run than paying up front, due to the interest charged on the fees.
Low-fee or fee-free mortgages include these costs in the overall cost of the mortgage, so it might work out cheaper to take a low-fee mortgage with a slightly higher interest rate.
Some mortgages can be ported if you want to move house, meaning you can take your mortgage deal and its remaining term with you and use it on your new property. However, you may have your affordability and credit score rechecked and the situation could be complicated if the new property is worth significantly more or less than your current home.
Our advice is to arrange a meeting with us before you even start looking at properties. We will discuss your individual circumstances and aspirations with you and advise how much you may be able to borrow, how much it is likely to cost you per month, the likely deposit you will need to provide, and the other costs associated with buying a house. You will then know your budget and be in an informed position to start looking at houses.
It could be, so speak to your lender as soon as possible if you aren’t able to make your mortgage repayments. They’ll be able to tell you the options that might be available depending on your circumstances and their policy, such as a short repayment holiday or a new repayment plan that could help you get back on your feet.
It depends what type of product you have. If you’re on a fixed rate deal, your repayments will stay the same until the fixed rate term ends, regardless of how much the Bank of England base rate or your lender’s SVR fluctuate.
If you’re on variable rate mortgage, including tracker rates and SVRs, your monthly repayments will increase if your lender increases its SVR – which is likely to happen as a result of the Bank of England Base rate rising.
Mortgage providers will usually insist on appropriate buildings insurance being in place on the mortgaged property as a condition of taking out the mortgage. We recommend that we complete a full assessment conducted by one of our qualified advisors to identify which insurance would be best for your situation.
We can meet you either in the day or early evening to fit in with your lifestyle or even at the weekend.
Once we have all your details from our first meeting, we will research the mortgage market for you. we will then contact you to arrange a second meeting to discuss the various options we believe meet you specific requirements.
No, the initial consultation is free of charge.
Black Swan’s standard fee for advising and arranging a mortgage is £345. This fee may rise if your mortgage application is particularly challenging and time-consuming but you will be advised of this before we undertake the work.
A bespoke face-to-face service with a personal touch. Black Swan will provide you with advice and arrange your mortgage for you. We will handle all the relevant paperwork and submit your mortgage application to the lender. Where relevant, we will also liaise with estate agents, solicitors and surveyors on your behalf. Our aim is to provide you with a simple, effective and straightforward mortgage service.
Mortgages are ‘serious finance’. As a Financial Conduct Authority registered mortgage broker we have a professional duty to discuss with you the different ways you can protect your mortgage – your home – from death, critical illness or loss of income. You are not obliged to take any mortgage protection advice we give you, but we always advise clients to think seriously about the impact on them, their home and their families should their circumstances change radically.
Black Swan will carry out a thorough fact find when we first meet. Alternatively, you can streamline the process by giving us a call before meeting a designated adviser and we can start looking at mortgage options for you straight away. we will leave you with a list of documents you will need to get together after our initial meeting.