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What Is A Mortgage - What Do You Need To Know About Mortgages

There are technically no limitations to how much you can borrow with a mortgage.
Eligibility and limitations are determined by the income, financial status and credit history of the borrower. The stronger your financial position at the time of application, the more likely you are to qualify for a larger mortgage. Your financial position will also influence the rate of interest you’re quoted and all other borrowing costs.

What Is Income Protection for Your Mortgage?

Income protection is an insurance policy, which protects the borrower in the event that they lose their primary source of income.
For example, if you have income protection and are made redundant or unable to work due to an injury or illness, your mortgage payments will be covered for you.

What Is Loan to Value?

Loan to value (or LTV) refers to how much a mortgage provider is willing to lend against the value of a property. For example, if a property was valued at £200,000 and a lender offered a maximum LTV of 75%, this would amount to a maximum loan of £150,000. The other £50,000 would therefore need to be offered in the form of a deposit.

Can I Make Mortgage Overpayments?

It depends on the terms of your agreement. Some mortgage loans can be overpaid and repaid early, saving significant sums on the overall costs of the loan.
However, some loans (and lenders in general) penalise early repayment with additional charges. If you’d like to repay your loan early should your financial situation allow it, you’ll need to make sure it’s possible at the time you apply for your loan.

Who Are the Best Lenders?

It depends entirely on the type of loan you need and your financial circumstances at the time. In all instances, however, it’s advisable to speak to an independent broker to help you find the best-value lender for your case.

How Can I Get the Best Deal?

The first step is to use a mortgage calculator to work out how much you can afford and what kinds of monthly repayments you can expect.

After which, it’s advisable to have an independent broker conduct a whole-of- market comparison on your behalf. Not every great mortgage deal can be found on the High Street – it often pays to set your sights beyond the usual lenders.

Why Do You Need to Keep Up Repayments?

If you fall behind on your payments, you could face heavy penalties. At best, your lender may impose additional fees for late payments and your credit score will be damaged. At worst, they may begin repossession proceedings and you could lose your home. Always contact your lender the moment you anticipate payment difficulties, in order to discuss a mutually beneficial resolution.

What Is a House Energy Rating?

The house energy rating (HER) of a property provides a broad indication of how energy efficient it is. It’s primarily used by potential buyers to get an idea of how much their energy bills will cost, if they move into the property.

What Are Property Surveys?

Property surveys are considered mandatory, as you yourself may lack the knowledge and expertise to fully assess a home for sale. A formal property survey will ensure that any major issues or discrepancies are identified and brought to the attention of the buyer.