Mortgages FAQS

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Q What is a credit score?
A

A credit score is a tool used by lenders to determine whether you qualify for their particular products. The better your score, the less ‘risk’ there is in lending you money i.e. lenders will have more confidence that their money will be repaid on time.

Your score is determined by the information held within your credit file. It’s definitely worth getting a copy of your Experian or Equifax credit report and going over it with an adviser to look at your options. Both Experian and Equifax offer free reports for the first 30 days, and then it’s about £15 a month after that.

Please see the links below for both websites.
https://www.equifax.co.uk/ , https://www.experian.co.uk/

Q Can I get a mortgage with a bad credit history?
A

That depends how bad it is; if you were made bankrupt yesterday, then it’s highly unlikely. However, if you’ve got defaults or county court judgements, then there are specialist lenders out there who may consider you.

Q How can I improve my credit score?
A

There are several ways to start improving your score today:

  • Register on the electoral roll: If you’re not registered, you’ll find it much harder to get credit.
  • Check your file for any errors: Simple errors such as your address being slightly wrong can impact your score. Report any incorrect information immediately.
  • Pay your bills on time: Prove to lenders that you’re capable of managing your finances effectively by ensuring bills are paid on time. Late/missed payments will damage your score.
  • Reduce your existing debt: Lenders will be hesitant to lend money to you if you already have a lot of existing debt. Try to clear as much as possible before applying for mortgage.
  • Check your financial associations: Your credit report will detail anyone that you have financial links to i.e. someone you share a joint account with. Your personal score could be affected if they have a poor score.
Q Can I get an interest only mortgage?
A

Yes, surprisingly, interest only mortgages are still available, as long as you meet the lender’s criteria, and of course, this varies from lender to lender.

Q What type of mortgage can I get for an investment property?
A

These are more commonly known as buy to let mortgages, and are usually taken out on an interest only basis. They can be set up on a capital repayment basis, but most borrowers opt for interest only.

Q How much stamp duty will I pay?
A

This can vary depending on if you are buying your first home, any subsequent home, or an investment property. To make things easier, have a look at the link below for a handy stamp duty calculator. https://www.stampdutycalculator.org.uk/

Q What interest rates are available?
A

There are loads; some rates start with a 1, some start with a 5. It completely depends on how much you are borrowing against the value of the property. The more equity you have, the better the rate will be.

Q How long can I fix my mortgage for?
A

You can generally fix your interest rate from anywhere between 2 and 10 years, although there has been the odd exception to this rule. The shorter term fixed rates tend to be lower, but your decision should always be based on your personal circumstances. Also bear in mind that whilst in your fixed period, most lenders will apply a penalty if you wanted to redeem the mortgage.

Q How long does it take to get a mortgage?
A

We have known mortgage offers to be produced within 7 days, but the average is anywhere between 2-4 weeks. As long as the correct information is given, and the right supporting documents are supplied, then the process should be straight forward, smooth, and speedy.

Q Do I have to pay for a valuation?
A

Not necessarily! Some lenders offer a free valuation. If you’re looking to save on upfront costs, then make your adviser aware that this is something you want to look into. If you don’t mind paying, the price varies from lender to lender, and is based on the value of the property.

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