Hot Topics
- What Are The Different Ways You Can Pay Off a Mortgage?
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Capital & Interest - otherwise known as a repayment loan. The borrower pays an amount each month to cover the amount borrowed and the interest charged on that.
- How Do I Know If I Should Switch Mortgages?
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The mortgage market changes on a regular basis – and it is quite possible that just a few years after taking out your mortgage there will be plenty of better deals out there with more favourable interest rates.
- I Have Been Turned Down For A Loan Or Credit Card, Will I Still Be Able To Get A Mortgage?
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If you have been turned down for a credit card or loan, then you need to find out why your application was rejected before you apply for a mortgage.
- What if I have mortgage arrears?
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If you have mortgage payments that have not been made by the due date in accordance with the mortgage deeds, you will have gained a bad credit history on your credit report. This may hinder you when trying to obtain further credit such as a credit card, loan, or another mortgage.
- What Happens If I Have Bank Defaults?
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If you have failed to meet payments on a credit agreement such as secured loans, unsecured/personal loans, credit cards, store cards or car finances etc, or you have failed to comply with your lender’s requirements, you will be described as having 'defaulted'.
What Will The Initial Costs Of Buying A House Be?
Before you actually move into your new property – you will have to pay a series of initial costs to cover the following:
- Deposit
When contracts are exchanged you will pay your deposit through your solicitor – this is a pre-agreed percentage of the purchase price – usually between 5% and 10%.
- Valuation / Surveys
The lender will always inspect the property to ensure it’s an acceptable security for a loan. This may or may not cost you anything depending on which lender you choose – if you have to pay it will probably cost around £200.
- Legal Costs / Conveyancing
A solicitor or licensed conveyancer will deal with the legal aspects of purchasing a property for you, and this will incur costs. Ask for an estimate of these costs before you choose a solicitor.
- Stamp Duty
The government taxes you based on the property's purchase price and is calculated as follows: Up to £60K - Nil, £60K - £250K - 1%, £250K - £500K - 3%, £500K+ - 4%.
- Arrangement Fee
The Arrangement fee is the lender’s fee for administering a mortgage. You may be allowed to add this fee to the mortgage and the fee varies depending on the lender chosen and the mortgage offer.
- Mortgage Indemnity Guarantee
If the value of the property is not much more than the requested value of the loan (high LTV ratio) you may be required to take out an insurance policy to protect the lender against losses incurred if the property needs to be taken into possession because of arrears. It is important to remember that this is insurance for the lender, not the borrower, but it is you that will have to pay it.
- Insurance
You will have to take out a Buildings Insurance policy to cover your home against the usual risks – because if your home is destroyed in a hurricane you will still have to pay the mortgage! In addition to this you will need contents insurance to cover theft, fire, damage etc. It is also considered wise to take out a mortgage payment protection plan that will provide you with income protection against unemployment, sickness and redundancy.
- Life Assurance
Most lenders require Life Assurance to be taken out to cover the value of the loan if you die. See our home page for more details on which type of Life Insurance to choose.
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