A mortgage is a loan taken out to buy property or land normally over a 25 year period but but the term can be shorter or longer. The loan is secured’ against the value of the property until it’s paid off.
Almost all mortgage products require you to put down a Deposit. The mortgage makes up the difference and is expressed as the percentage ‘loan-to-value’.
The loan is made up of two elements:
The Capital– the amount of money you borrowed to buy your property
The Interest – the amount the mortgage lender charges for lending you the money
The amount you can borrow is dependent on a number of factors: the price of the house; your personal circumstances, such as income and credit rating; and the lender and mortgage deal you choose. In most cases, you cannot borrow one hundred percent of the property's asking price, which means that you are usually required to save a considerable amount before you apply for a mortgage.
There are numerous types of mortgage. Which mortgage deal you choose will affect the way in which you make repayments, and how interest is charged and calculated.
A beginners guide to mortgages is available at MoneyHelper or uswitch.
Choosing a Mortgage
Choosing which mortgage to opt for can be confusing, so you may wish to use a mortgage broker who can compare the different deals and choose one that best suits your needs. Unbiased and qualified advice on mortgages can be obtained from Independent Financial Advisers (IFAs) who specialise in this market. They are the only source legally obliged to offer independent advice that is not on a commission basis, and are not affiliated or tied to any company or product.
To help you choose a Financial Adviser click here
The Financial Conduct Authority (FCA) is a regulatory body in the United Kingdom that regulates the conduct of financial firms providing services to consumers including the regulation of consumer credit and maintains the integrity of the UK’s financial markets.
Almost all firms offering financial services in the UK must be authorised byThe Financial Conduct Authority (FCA) .
You should only deal with a financial services firm that is authorised.
If you deal with an authorised firm you will be covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.
You can check whether a firm is authorised by searching the FCA authorised register.
Unfortunately there are firms that operate without authorisation and some knowingly run scams like share fraud and other investment scams. If you are unsure check the FCA List of unauthorised companies.
To acces a step by step guide to make sure you are dealing with an authorised firm, and to protect yourself from fraud and unauthorised activity click here.
The FCA have brought in new rules, known as the Consumer Duty, which set a higher standard of consumer protection in financial services. The Duty means you should get: the support you need, when you need it. communications you understand. products and services that meet your needs and offer fair value.
Further information on the Consumer Duty is available at the following links:
When you obtain a mortgage with a lender or through a mortgage broker they may try and sell you a range of additional insurances. By shopping around you may be able to get the same or better level of cover at a cheaper price.
Mortgage Tools
For a range of mortgage tools and calculators on mortgages, follow this link and select "Homes" .
Mortgage repayment calculators are available at the following links:
Help with a Mortgage
If you’re a homeowner getting certain income related benefits you might be able to get help towards interest payments on:
- your mortgage
- loans you’ve taken out for certain repairs and improvements to your home
This help is paid as part of your benefit and is called Support for Mortgage Interest.
A guide to help paying your mortgage is available from AdviserBook.
Divorce/Separation
When divorcing, dissolving your civil partnership or separating and you have a mortgage on a property, you need to decide what to do in the long term while keeping up the mortgage payments in the short term. For more information click here.
Paying off a Mortgage
When mortgage interest rates are at a low level you might think about paying your mortgage off early. To help you decide whether this is right for you, follow this link.
Mortgage Guides
A series of guides on all aspects of Mortgages are available from Which?
Help to find the right mortgage tailored to your needs is available at Compare the Market.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The Mortgage Rescue Scheme provides homeowners with the information they need to prevent their home being repossessed.
MoneyMagpie offer advice on what yo can do if you are struggling to pay your mortgage.
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