Things to think about
Before meeting with your adviser, here is a list of things to consider:
How long are you likely to remain in your property?
The length of time you intend to live in your chosen house might affect the option that is most suitable for you. If you are planning to move to a bigger property, to another area or even abroad, the most appropriate mortgage might be different to the most suitable in other circumstances.
What is your budget likely to be over the foreseeable future?
Mortgage payments are based on your current financial situation. If you anticipate that this will change over the coming years, it might be that a mortgage is available to meet these circumstances. Reasons for change could be promotion, maternity/paternity leave or retirement.
How much will it cost?
Your adviser will agree with you the charge for advice and whether this will be paid by way of a fee or, if appropriate, paid by the lender (or a combination of both). The costs of the mortgage will be clearly laid out in a Key Facts document. If applicable, take particular care in understanding the monthly costs after any initial discounted rate, as these are the ‘real’ costs of the mortgage. Also, unless fixed throughout the whole term of the mortgage, the interest rate charged will vary, up and down, according to market conditions.
How much can you borrow?
This varies between lenders and the availability of money. It is generally linked to your income and that of your partner. Most lenders will agree to a multiple of your joint salary with deductions for any regular outgoings such as loan repayments. In setting your own budget, consider important outgoings such as grocery bills, council tax, running a car, fuel bills, pension contributions and insurance policies.
The costs of stamp duty and conveyancing and arrangement fees also need to be set aside in your budgeting.
What insurance should you have?
Depending on your circumstances, your adviser might recommend taking out life and critical illness cover to clear the mortgage in the event of death or contracting a serious illness. Also, in uncertain times, it is useful to take out a mortgage protection plan that covers the repayments in the event of accidents, sickness or unemployment. Consideration should be given to state and occupational benefits and their limits.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The precise amount will depend on your circumstances and/or amount of borrowing. We will notify you of any costs before any advice is provided.
