PROPERTY PURCHASE

Q. What types of mortgage are available to me?

Most lenders offer a range of fixed and capped rates, discounts and flexible mortgages. Some offer base rate tracker mortgages, and some will give cash-backs. Chat through which deals are available for first-time buyers, and which will best suit your needs.

Q. What would my monthly payments be?

Get quotes on a number of deals too see what your payments would be and whether they fit your budget. Ask one of our brokers for a quote on what your monthly repayments would be.

Q. Are there any redemption penalties?

Fixed, capped and discounted deals may carry redemption penalties tying you to the lender after the end of the fixed, capped or discounted period. If there are penalties, find out how long they run for, and how much your monthly payments will be on the lender's standard variable rate.

Q. What will happen after a fixed, capped or discounted period?

Some lenders will automatically write to offer you new products. Others will just put you on their standard variable rate and hope you don't notice. In the latter case, you need to be positive and go out and look for a new deal when your first one runs out. We offer a great free of charge remortgage service that may be of interest to you.


Q. Are there any incentives?

Because the market is competitive, some lenders offer special incentives to get your business. They might pay for your valuation and/or legal fee, or waive the arrangement fee, for example.

Q. Is there an arrangement fee?

Many lenders charge an 'arrangement fee' of a three to six hundred pounds. But some special deals might waive the arrangement fee to tempt you.

Q. Are there any tie-in insurances

A few lenders may offer mortgage deals that come with the condition that you take you their buildings and/or contents insurance, for example? Mortgage lenders are not insurance specialist and may not offer the cheapest rates (or best products) on the market.

So you will save money by shopping around for insurance separately. Pressure is being brought to bear to outlaw compulsory insurances altogether.

If you would like an independent life cover quote we can provide one sourced from 18 of the top UK life insurers. This will be via one of the UK’s biggest and best UK on-line life insurance providers, Grosvenor-Insurance.

Q. How will interest be charged?

Some lenders charge and apply interest annually, so your monthly payments are only totted up at the end of the year and taken off your debt. This means that you have been paying interest on the initial sum all year. A fairer method is to calculate and apply interest daily. Some lenders automatically apply daily interest, but with others you have to request it.

Q. Is there a Mortgage Indemnity Guarantee (MIG) premium to pay?

A MIG, also known as a Higher Lending Fee, is charged by many lenders, on mortgages over 85% or 90% of the property's value. So it hits many first-time buyers. It is an insurance that protects the lender against you defaulting on your mortgage payments, but you the borrower pay for it, and it offers you no protection at all.