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Mortgage FAQ's

Here we have further information regarding:

First Time Buyers Questions

I haven't found a house yet, but I want to arrange a mortgage so they're ready at the same time - is this possible?

It is a good idea to find out how much you can borrow and be sure that a lender is prepared to lend money to you before you find a house. We can help you to apply for an AIP (application in principle) where the lender will check your income and credit history etc and provide you with a certificate confirming how much they are prepared to lend to you. It is not possible to obtain a formal mortgage offer without property details, though, as the lender will need to check that the property is a sound mortgage investment - they will do a valuation for mortgage purposes when you find a property.

What personal debts will be taken in to account when working out my eligibility - will my student loan count against me for instance?

Lenders need to make sure that you can afford your monthly mortgage repayments before they will give you a mortgage. Some lenders base your mortgage on your income less any regular commitments (loans, maintenance payments etc) whilst others lend on an affordability basis - taking into account your net monthly income and regular commitments. Not all lenders take student debt into account and when you come to Efit we will ensure that we find the best lender for you. WE have excellent relationships with lenders who will be sympathetic to graduates - understanding that they will have not only student loans but bank overdrafts and credit card debt too. The most important thing, is to ensure that you always make your repayments as lenders do not like to see missed payments and defaults on your credit file.

My income doesn't stretch to a very large property, can I use a parent as a guarantor?

Sometimes it is possible to have a close relative as a guarantor, however they can be other options available, all of which we can discuss with you. The most important thing we need to do is to make sure that the mortgage will be affordable to you, both now and in the future.

I'm thinking of buying a house with three friends - what informationcan you give us?

Think very seriously about it. You are all friends now, but what will happen when you receive a very large bill and you disagree about who is going to pay it, what happens if one of you becomes unemployed and can't afford their part of the rent, what happens if one of you wants to leave or worse still what would happen if one of you was to die? When you sign a mortgage as a group, or even as a couple, you are each responsible for the whole debt, not just 'your percentage' of the house. These things all need to be agreed in advance, that way you all know where you stand.

Will you recommend Solicitors to me, and if not, where do I find them?

We do not normally recommend individual solicitors for conveyancing (the name for the legal work), it may be better to talk to your friends or to your Estate Agent for a recommendation. It is usually better to use a local solicitor, or Licensed Conveyencer, as they will have a particular knowledge of your area. It is always a good idea to get quotes from several local firms, as some are more competitive than others.

We can recommend a very competitive firm of solicitors to you for Will writing and we would be pleased to pass your details to them upon request.

Is there any financial advantage to being married as opposed to living together, when it comes to applying?

Mortgage lenders do not treat married couples and couples who are living together any differently - they will usually lend based on both incomes combined or if one partner earns significantly more than the other, they may lend a multiple of each income.

When the mortgage is set up, your solicitor will advise you whether to set up the mortgage on a joint tenancy (where in the event of either death, the other partner inherits the property and the mortgage debt) or on a tenants in common basis (where you each own a share of the property and debt and on death, your share will fall into your estate).

I mainly do contract work - will this affect my offer?

If you work on contract then we will recommend lenders who are happy to lend based on contract income and are not concerned about you being in permanent employment. It is important to seek informationas some lenders do not like lending to people on contract.

What other costs will I incur whilst taking out my mortgage?

If you are buying a property, here are the costs you are likely to incur:

  • Estate agency costs for selling your current property
  • Solicitors costs for selling your current property
  • Solicitors costs for purchasing your new property
  • Stamp duty on purchase
  • Valuation costs for new property
  • Arrangement fees - some mortgages require you to pay a booking or arrangement fee.
  • Removal costs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Endsleigh Financial Independent Tailoring is a trading name of Endsleigh Independent Financial Services Limited which is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Independent Financial Services Limited. Company No: 4132605 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.