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Mortgage · The Basics

The Mortgage 100.
The Basics

Focus: Definitions, core concepts, and suitability.

20+Questions
100%Expert Answers
FCARegulated
What should first-time buyers know about mortgage approvals?
TL;DR Essential guide for UK first-time buyers navigating mortgage approvals. Learn about Decision in Principle (DIP), affordability checks, credit scoring, and required documentation.
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Do first-time buyers get better mortgage rates?
TL;DR First-time buyers often access special mortgage deals, but are the rates better? We analyze specific products, stamp duty breaks, deposit requirements, and factors affecting FTB rates. (159 chars)
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How much can I borrow as a first-time buyer?
TL;DR Discover how much you can borrow as a first-time buyer in the UK. We explain the 4.5x salary rule, deposit requirements, credit checks, and affordability assessments used by lenders to determine your mortgage limit.
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How much should I save for a mortgage deposit as a first-time buyer?
TL;DR Discover how much you need to save for a mortgage deposit as a first-time buyer in the UK. We explain minimum deposits (5-10%), average costs, and saving strategies.
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How do mortgage interest rates change over time?
TL;DR Understand how mortgage interest rates change over time. Learn about the Bank of England Base Rate, fixed vs variable rates, and the factors influencing your monthly payments.
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What happens if I can’t pay my mortgage?
TL;DR Worried about missing mortgage payments? Learn the immediate steps to take, the importance of contacting your lender, and the potential consequences, including repossession, if you can’t pay your mortgage in the UK.
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Can I get help with my mortgage payments if I lose my job?
TL;DR Losing your job is stressful, but help is available for mortgage payments. Learn about Government support (SMI), income protection insurance, and lender forbearance options in the UK.
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How long does it take to get approved for a mortgage?
TL;DR Discover the timeline for mortgage approval in the UK. We break down the stages, from application submission to final offer, covering factors like documentation, underwriting, and property valuation.
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What documents do I need to apply for a mortgage?
TL;DR Applying for a mortgage requires careful preparation. Learn exactly what documents you need, including proof of ID, income, address, and deposit statements, to ensure a smooth application process in the UK.
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How much deposit do I need for a mortgage?
TL;DR Learn how much deposit you typically need for a mortgage in the UK. We explain minimum requirements, LTV ratios, and schemes that can help first-time buyers.
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Are there penalties for paying off my mortgage early?
TL;DR Paying off your UK mortgage early often incurs early repayment charges (ERCs). Learn how ERCs are calculated, when they apply, and the potential impact on your finances.
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Are there any fees involved in remortgaging?
TL;DR Remortgaging often involves several key fees, including product arrangement, valuation, and legal costs. Understand exactly which fees apply and how to minimise your overall expenses.
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How much equity do I need to remortgage?
TL;DR Understanding how much equity you need to remortgage your UK property is crucial. Learn about LTV ratios, minimum equity requirements, and why more equity means better rates.
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Is it a good idea to remortgage to pay off debt?
TL;DR Remortgaging to consolidate debt can lower monthly payments and simplify finances, but it extends the debt term and risks your home. Learn the pros, cons, and alternatives.
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How do I calculate my home equity before remortgaging?
TL;DR Learn how to calculate your home equity accurately before remortgaging. We explain valuation, outstanding mortgage debt, and Loan-to-Value (LTV) ratios. Understand your borrowing power.
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What affects mortgage interest rates in the UK?
TL;DR Understand what affects mortgage interest rates in the UK, from the Bank of England Base Rate and inflation to your personal credit profile and deposit size.
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Can I negotiate my mortgage rate with a lender?
TL;DR Can you negotiate your mortgage rate? Yes. Discover expert tips on how to negotiate effectively with UK lenders, when the best time is to switch deals, and how comparing offers can save you thousands.
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How do early repayment charges work?
TL;DR Understanding how early repayment charges (ERCs) work is crucial when taking out a UK mortgage or loan. Learn how ERCs are calculated and when you might face them.
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Are there mortgage options with no deposit?
TL;DR Zero-deposit mortgages are rare but not impossible in the UK. Learn about 100% LTV options like guarantor mortgages and Joint Borrower Sole Proprietor schemes. Understand the risks and requirements.
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How do lenders determine my mortgage interest rate?
TL;DR Learn precisely how UK lenders determine your mortgage interest rate. We break down the key factors including your credit score, LTV ratio, the BoE base rate, and the chosen product type. Understand your costs better.
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Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.

More than 50% of borrowers receive offers better than our representative examples

The %APR rate you will be offered is dependent on your personal circumstances.

Mortgages and Remortgages

Representative example

Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

Secured / Second Charge Loans

Representative example

Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

Unsecured Loans

Representative example

Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

Authorised and regulated by the Financial Conduct Authority – Number 681423
The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

Website www.promisemoney.co.uk