Nurturing Your Future
Frequently Asked Questions (FAQ's)
Answers to all the most frequently asked questions about mortgages, insurance and our services at Beechwood mortgages.
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If there are any questions you may have about the services offered here at Beechwood Mortgages, look no further as we have provided answers to all of our most frequently asked questions below.
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Frequently Asked Questions (FAQ's)
General / Process:
You can either engage with a mortgage broker or speak with your bank / building society if that is your preferred route. Click here for full details on how a mortgage broker operates and the benefits they can provide.
Purchasing a property will take you anywhere from 8 to 16 weeks to complete. This is merely a guide, could be quicker – could also be much longer!
Typically a lender will issue a mortgage offer within 2 to 4 weeks, some are quicker and some, unfortunately, can take much longer. Your mortgage broker will be in a position to set your expectations in line with the lenders current turnaround times.
You need to establish how much you can borrow so you have a good idea of what type of properties you can consider before you start looking. Then secure your mortgage Agreement in Principle as this will demonstrate you are a serious buyer and with the necessary funds preliminary approved.
An AIP is an indication from a lender of how much you can borrow.
Your mortgage AIP will generally be valid for around 30 to 90 days.
Over the years lenders have consistently supported mortgages with 5% deposit. Increasing your deposit will result in better rates being offered to you – lenders improve their rates when your deposit increases incrementally by 5% - so 10%, 15% and so on.
You should start considering your options six months in advance. It’s important to remember that by doing so doesn’t lock you into anything, so you will still be in a position to take advantage of any better deals if applicable.
You can do but working with a mortgage broker has many benefits. Whether the right advice is to stick with your current lender or not, a broker will consider all options whilst, more importantly, offering you a reliable / accessible single point of contact throughout your move.
Most lenders will require a deposit. However, from time to time some lenders will offer a mortgage if you have a family member in the background who wants to help you where they can – this could be via a small charge over their property. In this instance the lender may agree to support you without a physical deposit being provided.
You will need to ensure that your deposit is available and with your solicitor when you exchange contracts. For most purchases this would around 8-12 weeks from the moment your offer was accepted.
Yes, depending on your overall circumstances and the extent of your bad credit, it is likely that there will be lenders willing to support you.
Yes, providing you are employed on a permanent basis then most lenders will be fine with this. Some will also ignore any probation period.
Whilst most lenders can consider using your second income towards your mortgage affordability the majority like to see that you’ve been in that role for at least 6 months.
There’s no easy answer to this one! Read our ‘How Much Can I Borrow’ page for more information and details on how lenders will view your individual situation.
Although the majority of lenders will need to see upwards of two years trading, there are a few lenders that will consider your application with just the one years finalised accounts.
Yes, whilst the majority of lenders will be happy to consider your application most will require a minimum of 12 months history of you contracting. Your mortgage affordability will vary greatly from one lender to the next so you could do a lot worse than speak with an experienced mortgage broker to discuss your options.
Yes, some lenders will consider supporting you, although this will depend on a few factors including the time you have been in the UK, the time remaining on your VISA and the level of deposit you have available.
Fees & Costs
Firstly, although many mortgage brokers will charge an additional fee, it’s important to remember that not all brokers charge a fee. With so many different costs / fees to save for you should shop around for advice and support that you can trust.
Most lenders now offer their valuation free of charge. This not a survey, it is simply required to check that the property’s valuation / selling price is an accurate reflection of the current market before they approve your mortgage.
This is entirely up to you and the type of property you are purchasing. Buying a property is likely to be your biggest investment so it is generally advisable to organise a survey before finalising your purchase.
This will depend on your circumstances – generally yes but if you are a First Time Buyer you will not pay any Stamp Duty on a property up to £425,000*. For more details take a look at our What Fees Will I Pay And When page.
*as of 2023
This will vary from one solicitor to the next – however, as a general rule of thumb you should expect to pay around £1200-1500 to purchase a property and then £1000 or so if you are selling your current home.
When you sign up to most special deals (fixed / discounted rates) your lender will lock you into early repayment charges – this usually runs for the special period you’ve signed up to and means there will be a penalty charge if you exit the deal early.
Mortgage Types / Products
This is the traditional and most commonly method of repaying a mortgage as your monthly payment will include both the capital and interest. Therefore, providing you meet your monthly repayments for the duration of your agreed term your mortgage will be repaid in full.
This is where you pay just the interest and none of the original amount borrowed. You will need to consider the final repayment of your mortgage and your ability to do so – methods of repayment are typically a pension / stocks & shares / investments / sale of property.
With a fixed rate mortgage, you can sit back and relax knowing that your interest payments will stay the same throughout the 'fixed period'. This provides financial stability compared to other loan products where rates and therefore monthly payments may change.
A tracker mortgage follows the Bank of England base rate. Unlike fixed-rate home loan agreements, which have a consistent payment structure throughout their duration, the amount you pay on your tracker mortgage could either decrease or increase each month depending upon changes in the BoE base rate. This could be an ideal choice if you want your mortgage to remain flexible over time.
A discount mortgage is a type of variable rate mortgage where the lender offers you a discount on their standard variable rate (SVR) for a set period of time. Once you come to the end of that period, you start paying the more costly SVR, unless you remortgage onto a better deal.
A standard variable rate (SVR) is a variable rate mortgage which you usually move onto once your incentivised deal ends. This is generally the highest rate charged by a lender so it is advisable to consider your options well in advance of your current deal expiring.
The Annual Percentage Rate of Charge (APRC) shows you, as a percentage, the annual cost of a secured loan or mortgage over its lifetime. It brings together all charges (such as fees and variable interest rates) calculated over the full term without changing it. It assumes you never change your mortgage.
Generally speaking, most lenders will allow you to make ‘overpayments’ – although this varies from lender to lender, the majority allow you to repay up to 10% of the outstanding loan each year without incurring the early repayment charge.
Although it is advised that you pay fees separately where you can afford to do so, some lenders will allow you to add their main arrangement fee to your mortgage. Doing so will result in additional interest being charged, your mortgage broker will explain this in more detail.
This is often paid by lenders as part of their introductory offer and is generally paid out on completion. Many lenders also offer a cash back towards legal costs when re-mortgaging.
Protection & Insurance
Although it is generally advisable to protect yourself and your mortgage, taking out life insurance is no longer a condition within your mortgage offer.
Life Insurance is used to ensure that your mortgage is repaid in the event of death. It is typically put in place to protect a mortgage, yourself & your dependents.
If you are taking on a mortgage you MUST have adequate buildings insurance, this will be a condition of your mortgage offer. You can then protect your home contents under the same policy.
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Contact
0118 9455 477
enquiries@beechwoodmortgages.com
68 School Road, Tilehurst,
Reading, Berkshire, RG31 5AW
Reading, Berkshire, RG31 5AW
