7 Essential Questions to Ask a Mortgage Adviser in First Meeting
Your mortgage will most likely be your largest financial commitment. The average UK mortgage was £117,162 in 2016; according to the Independent, you must make the best selection for yourself when taking out a new mortgage. Here are some mortgage process questions that you should ask in the first meeting with a mortgage advisor if you’re looking for a new loan.
7 Mortgage Process Questions You Should Ask a Mortgage Advisor in the First Meeting:
What is the maximum amount I can borrow?
Every mortgage lender has its way of determining how much it will lend. Some mortgage lenders use income multiples together with income and expenditure calculation to determine your borrowing capacity, while others rely on complicated budget calculations. The way mortgage lenders handle any current loan commitments differs from one bank to another. Check out how your credit score is calculated in this article.
Therefore, talk with your mortgage adviser and ensure they are familiar with your specific circumstances, such as your income and outgoings. They’ll be able to give you a better sense of how much you can borrow this way.
Also Read: Reasons You Should Hire a Mortgage Advisor
What documents are required?
Banks and building societies will require proof of income, and you will be required to verify your name to comply with money laundering rules. If you’re employed, you’ll most likely be required to provide pay stubs and a P60, while if you’re self-employed, you’ll almost definitely be required to create tax returns or accounts. Ask your mortgage advisor exactly what they require of you so that you can get all of the necessary paperwork.
What types of mortgages do you have available?
There are many different types of mortgages. The majority of the new mortgages are advanced on a repayment basis, which means that your monthly payment includes both interest and the amount you borrowed. Interest-only mortgages are available from some lenders, while others provide offset or current account mortgages. When speaking with your adviser, find out what options you have to be advised on the best course of action for you.
A discounted variable rate is lower than your lender’s standard variable rate (SVR). It will generally rise and fall in lockstep with interest rates, but because mortgage lenders have control over their SVRs, it may rise or fall faster than the overall rate.
What are the costs of the arrangement?
The majority of mortgages have a one-time arrangement fee. The average arrangement charge for a fixed-rate plan is now £1,018. You may be required to pay additional fees to your mortgage lender on top of the ‘product charge.’ Make sure you’re well aware of any costs that may apply. Booking costs, valuation fees, and other arranging fees are examples.
Also Read: Ultimate Guide of Mortgage Guarantee Scheme
What are the penalties for paying off a loan early?
If you take out a special product with your lender, such as a fixed, discounted, or tracker rate loan, you may be subject to ‘early repayment charges.’ If you pay off a portion or all of your mortgage within a certain time frame, you will be charged these costs.
If you take out a two-year fixed-rate loan, for example, you may be charged a 1% to 2% early repayment fee if you repay the loan before the two years are up. However, this depends on the terms of the transaction that’s been recommended to you. Inquire with your mortgage lender about the early repayment penalty and make sure they are suitable for your situation.
Is it possible for me to overpay?
While many mortgages include early repayment penalties, most of them will allow you to make a minor overpayment. Many lenders will let you pay back up to 10% of your remaining balance without paying any fees each year.
If you want to pay more than the minimum, check with your lender to see if it’s doable. You should also discuss how your overpayments will be handled and whether they’ll be immediately applied to your mortgage debt.
Is it essential for me to purchase insurance?
As your mortgage is likely to be your largest financial commitment, you must be properly insured. Your lender will need you to get building insurance for your property, but inquire whether this should be done via them or if you can get insurance elsewhere.
These questions might help you understand and be prepared for what could be the biggest financial commitment of your life when you apply for a mortgage. If you are looking for a mortgage lender in London, consult Mountview Financial Service that serves financial solutions for a decade.