Moving Home?

How to find a lender to get the best mortgage deal for your move

All lenders now use a Mortgage Market Review (MMR) to work out your affordability calculations so they can work out what they will lend to you. They want to know as you do, what you can afford to pay back. They examine your income and outgoings. A quick rule of thumb is that they will lend up to 5 times your income. Remember you will need at least 5% of your purchase price as a deposit and a further 5% to budget for your purchase costs. The most important question is ‘Can you afford the loan payments if the interest rate goes up?’ Your MMR-Mortgages adviser will be able to offer professional independent advice. They will also search the whole of market lending and explore which mortgage deal is best for you.

What is Loan to Value – LTV?

The Loan to value (LTV) is the amount you are borrowing against the purchase price. For example if the property was £125,000 and the LTV was 95% then the amount you can borrow is £125,000 x 95% = £118,750 . The difference between the £125,000 and £118,750 is the deposit that you will need to find which in this case is £6,250 Your savings will determine the size of property you can buy. Your mortgage adviser / broker will help you to understand what size of property you can afford.

The Council of Mortgage Lending

The Council of Mortgage lending website has some very helpful guides in the consumer section. http://www.cml.org.uk/cml/consumers  They also have a fantastic homebuyer guide – Working out a realistic budget when buying a property. http://www.cml.org.uk/cml/consumers/homebuy/homebuy2#1

Getting Advice

Under new rules introduced in April 2014, lenders and brokers must offer advice by recommending the most suitable mortgage for you. 

Mortgage Advice: Where to go for the best mortgage deal

Another great source of information is from the Money Advice Service https://www.moneyadviceservice.org.uk/en/articles/choosing-a-mortgage-shop-around-or-get-advice

Complexity made easy