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What Exactly is a Mortgage?: A mortgage is basically a loan – a loan that is secured on the value of a property which you pay back over a given period of time.
How Does A Joint Mortgage Work?: When you decide to get a mortgage with another person – both your incomes can be taken into account. The general rule is that you can borrow three times the first income plus half of the second income, or two-and-a-half times the joint income.
What Is Conveyancing?: Conveyancing is the name of the legal process of transferring ownership from the seller to the buyer.
What Happens If I Have No Proof Of Income?: If you are self-employed and cannot provide any proof of income – you will have to self-certify your income. In most cases you will need to provide an accountant’s certificate as proof of income.
How Do I Know If I Should Switch Mortgages?: 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.

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.