Introduction To Mortgages

Understanding Mortgages

A mortgage is a loan that helps you buy a home. Like any loan, you’ll pay interest on the money you borrow and repay it over an agreed period.

The mortgage is secured against the property, which means the lender has a legal claim over the home until the mortgage is repaid in full. Mortgages are available from a range of lenders, including banks, building societies, and specialist mortgage providers.

Your mortgage adviser will help you understand your options and find a solution that’s suitable for your circumstances.

What Do Lenders Look At?

Every lender has its own criteria, but there are some common factors they consider when deciding how much they are prepared to lend.

Affordability

Lenders want to be confident that you can comfortably afford your mortgage payments, both now and in the future.

As part of the application process, they’ll assess your income, outgoings, and existing commitments. They’ll also carry out affordability checks to see how your finances would cope if interest rates were to increase.

Borrowing within your means can provide greater financial flexibility if your circumstances change in the future. During your consultation, we’ll explain how affordability assessments work and help you understand your borrowing options.

Deposit

Most home buyers will need a deposit when applying for a mortgage. A deposit is your contribution towards the property’s purchase price.

While many mortgage products require a deposit, some lenders now offer 100% mortgages for qualifying applicants, particularly where there is evidence of a consistent rental payment history.

Generally, the more deposit you can put down, the more mortgage options you may have available and the better the rates you may be able to secure.

Property Valuations and Surveys

Before approving a mortgage, the lender will arrange a valuation to confirm that the property is worth the amount being paid for it.

It’s important to remember that this valuation is carried out for the lender’s benefit and is not a detailed assessment of the property’s condition.

Many buyers choose to arrange a RICS HomeBuyer Report, which provides an independent assessment of the property’s overall condition and highlights any significant defects or issues that may require further investigation.

For older properties, properties that have been extensively altered, or homes showing signs of significant wear and tear, a more detailed building survey may be worth considering.

Not sure which survey is right for you? Your adviser can explain the options and help you choose the most appropriate survey for the property you’re buying. We can also arrange fixed-price HomePlus Level 2 and Level 3 surveys, giving you additional peace of mind before you commit to your purchase.

HomePlus surveys offer:

• A simple, hassle-free process
• Digital reports, usually delivered within two days of the survey
• Easy-to-use interactive reports and PDF copies
• Pre- and post-survey support from the surveyor
• Access to over 600 RICS-registered surveyors across the UK

Read more about the different types of survey on our Independent Survey Services page.