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Standard Mortgages
Just because you own or have owned a property before, doesn’t mean you don’t need help when arranging your mortgage. In some cases there is even more to consider and we are here to help you.

As well as finding the best deal you need to think about any penalties that may apply to your existing mortgage – Is it better to transfer or ‘port’ your existing mortgage or is it better to pay this off and start over from scratch? If you do stay with your existing lender, do you need additional funds by ‘topping up’ your mortgage? If so, this will normally be from rates available from the lender’s current range.

Affordability and Eligibility

Another thing to consider is whether your existing lender will still accept you or will lend you enough to buy your next property. There can be a big difference between the affordability calculations of different lenders and some may not be willing to lend on the new property you are buying or you may have become ineligible e.g. because you now have poor credit or more commitments.

Contact us today or book an appointment online

Deposit

As prices have increased in value in many areas in recent years many customers have more equity in their homes and this equity can be used as a deposit for your forthcoming purchase. You can of course add in savings or a gift from close family members to increase your deposit but you normally need to prove the sources of other deposit monies you intend to use.

Being Part of a Chain

Often you will find yourself within a chain when selling and buying a home. The shortest chain will generally be three transactions:- A first time buyer or someone with nothing to sell at the bottom of the chain, buying from you and then you buying from someone else but there is no maximum to the number for parties than can be in a chain.
In England and Wales, any one of those parties can pull out of their sale or purchase or both, for any reason up to exchange of contracts without penalty. In such cases, a new buyer is needed or you will need to find another property. In such cases you will normally have to pay for a survey and any disbursements although most conveyances only charge for their time if the case completes.

Buy to Let Agreement

Many people ask if they can rent their property out and buy another property. This can be an option and is known as a ‘let to buy’ scenario but there are many facts to consider. It needs to seem plausible to the lender, the rental margins need to be acceptable and you will normally have to enhanced Stamp Duty – see below.

Transfer of Equity

Some customers ask if they can take on the mortgage on their own e.g. if another party is moving out? This can happen and normally involves a ‘transfer of equity’. The remaining borrower needs to be able to afford the mortgage on their own and in most cases the other parties need to obtain independent legal advice. We can help you to arrange this.

Types of Mortgages

Standard Variable Rate

This is a standard interest rate, which a lender will set and can go up or down in line with market rates (such as the Bank of England’s base rate).

Advantages:

• You have more flexibility and can usually repay your mortgage without any early repayment charges.

Disadvantages:

• Your monthly payments can go up and down and this can make budgeting difficult.

• Standard variable rate mortgages are not usually the lowest interest rates lenders offer.

Discounted/Tracker Rates

Some lenders offer mortgages where the initial interest rate is set at an amount below their standard variable rate for a set period of time or tracks the Bank of England base rate. At the end of your discounted rate period, your lender will usually change your interest rate to their standard variable rate (SVR). It’s a good idea to review your mortgage at this stage because the lender’s SVR may not be the best deal around.

Advantages:

• Your payments should cost you less in the early years, when money may be tight. But you must be confident you can afford the payments when the discount ends. These types of mortgages are more likely to have no early repayment charges if you want to be able to make large over payments without penalty – but not always.

Disadvantages:

• Your monthly payments can go up or down which can make budgeting difficult.

• If you want to repay the loan early, there could be early repayment charges.

Fixed Rates

With a fixed rate mortgage, your monthly payment won’t change for a set period. At the end of your fixed rate, your lender will usually change your interest rate to their standard variable rate (SVR). It’s a good idea to review your mortgage at this stage because the lender’s SVR may not be the best deal around.

Advantages:

• You know the exact amount you’ll need to pay each month, which makes budgeting easier.

• Your monthly payment will stay the same during the fixed period, even if other interest rates increase.

Disadvantages:

• Your monthly payment will stay the same during the fixed period, even if other interest rates decrease.

• If you want to repay your loan early, there could be early repayment charges. Most lenders will allow some overpayments without penalty.  

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Stamp Duty

You normally have to pay stamp duty land tax (often called just stamp duty) on your purchase. This can add thousands of pounds to your purchasing costs, so factor it in. It also increases in line with the value of the property

Rate of Stamp Duty

  • £0 – £125,000 – 0%
  • £125,001 – £250,000 – 2%
  • £250,001 – £925,000 – 5%
  • £925,001 – £1.5 million -10%*
Be aware that if you’re buying a second home, your stamp duty will be 3 per cent higher. The same is true if you live overseas. *Subject to change
In Wales and Scotland the rules are different. In Wales the tax is called Land Transition Tax (LTT) and in Scotland it’s called Land and Buildings Transition Tax (LBTT). If you don’t sell your main residence before buying your new property, you can normally claim any additional enhanced SDLT you pay back if you sell your previous home within three years of buying the new one.

Estate Agent Fees

Most people will normally use an Estate Agent to sell their home and depending on the type of agent and service you choose this will normally cost between 0.75% and 2% of the value of your home (plus VAT). Some agents now offer a fixed fee service payable in advance and not based on a percentage of the sale price but you generally have to pay this if they sell your home or not.
Estate Agent Fees
House Survey

Conveyancing

You will need to use a solicitor or conveyancer when you move. Normally they will work for the lender as well but occasionally you may need to have separate representation, e.g. if your chosen conveyancer is not on the lender’s panel. Standard conveyancing costs on a sale and purchase of an average house are often in excess of £3,000 or £4,000 plus VAT although that tends to include disbursements (local authority searches etc).

Valuations and Surveys

There are three types of valuations and surveys – valuation reports,

homebuyer’s reports and building surveys:

• Basic valuation report – This is a basic report paid for by you but completed by the valuer for your lender. Your lender will use this report to help them decide whether they’ll lend you the amount of money you need to buy your property. 

• Homebuyer’s report – This is a more detailed report that a surveyor completes for you. There’s an important difference between a basic valuation report and a homebuyer’s report. The valuation report belongs to the lender and the valuer completes the report for them. With a homebuyer’s report, the surveyor works for you and they’re responsible to you if they fail to spot things. Whilst this costs more than a basic valuation, you should consider asking for a homebuyer’s report as it will give you a lot more information about your property. It’s particularly useful if you’re buying an older property. Your lender will normally use the homebuyer’s report to help them decide whether to lend on your property, so you won’t normally need more than one report. Your lender can arrange this.

• Building survey previously known as a full structural survey – This is the most detailed type of survey that’s completed by a surveyor working for you. 

The surveyor is responsible to you if they fail to spot things. Building surveys are normally asked for by those who are looking to buy:

• an older property or

• one which needs substantial refurbishment or

• where there have been structural problems in the past.

A mortgage valuation is often paid for by the lender whereas a homebuyer’s report could cost in the region of £300 to £800 depending on the value of the property. A building survey will cost more again.

Additional surveys or reports may be needed by your lender before they’ll make you a mortgage offer.

Removal Firms

These can range from a few hundred pounds for a small property using a man and van to several thousand pounds for a larger property or a managed service. Once you get potential exchange and completion dates, try to book them as early as you can so as not to delay completion.

Contact us today or book an appointment online

Contact us today for any questions and a free initial consultation or book
an appointment online. We can help to guide you through every aspect of buying a home.

Your Data

Financial Web Ltd Trading As Clifton Mortgages will be what is known as the ‘controller’ of the personal data you provide to us. We only collect basic personal data about you which does not include any special types of information or location-based information.

Why do you need my data and what will it be used for?

We need to know your basic personal data so we can make contact with you and respond to your message, request or query. All the personal data we process is processed by our staff in the UK.

Who is my data shared with?

Your data will only be shared with third parties if this is necessary to respond to your request. If this is the case, we will seek your permission before passing on your details.

How long do you keep my data for?

We may store your data for up to six years past the end of any business relationship, after which time it will be securely destroyed. If you would no longer like us to process your data at any time, you have the right to object to processing of your data. To do this, please contact [email protected]

What are my rights?

You have the right to object to the processing of your data. You also have the right to request access to your data at any time. You have the right to rectification and/or erasure of personal data or restriction of processing. If you wish to raise a concern related to how we have handled your personal data, you can contact us to have the matter investigated at [email protected]. If you are not satisfied with our response or believe we are processing your personal data not in accordance with the law, you can complain to the information commissioner’s office: https://ico.org.uk