"Khalid was recommended by a friend and he did not disappoint. He helped us secure a good deal with our mortgage and took his time to explain the pros and cons of each product. I would recommend using Khalid for his professionalism and his great knowledge of the market. We will use his services again."
At Blackstone Financial Solutions we provide a quality advice and recommendation service, ensuring that we always find the best mortgage for you.
An experienced professional mortgage adviser is invaluable when it comes to finding you the right mortgage. At Blackstone Financial Solutions we have access to over 65 lenders and 4,000 mortgages so we are able to advise on a wide range of mortgages to suit each of our client’s individual needs. Our extensive network of lenders coupled with our in depth market knowledge means we can offer the best mortgage deals for your circumstances and make sure you are in the best possible position to proceed successfully with an application.
Secure the house of your dreams
Expertise and Efficiency
We pride ourselves on the high quality and personal service we offer our clients. Your adviser will clearly explain the different types of mortgages and your options. After reviewing all your documentation we will be able to offer truly individual advice as to the best mortgage solution for you. We will then support your application process, keeping you fully informed throughout.
Some Mortgage Basics
In the section below, we introduce some basic facts about mortgages that you need to know before making any choices.
What is a mortgage?
A mortgage is a loan made to you by a lender so you can purchase a property. You’ll pay interest on the mortgage and your lender will use your home as security for the loan. This means that your lender may repossess your home if you do not keep up repayments.
At its most basic level, a mortgage has two parts – the loan (the money you borrow) and the interest (the charge made by the lender until the loan is paid back).
The most important points are how you pay back the loan you borrow and how you pay the interest on it. You can either pay interest plus a little of the loan each month (a repayment mortgage) or just pay interest each month and pay all the loan off at the end of the mortgage term (an interest only mortgage). A repayment mortgage is the most widely available and provided you maintain the required payments, you also have the certainty that your mortgage will be repaid at the end of the term.
With a capital repayment mortgage, your monthly payments pay off the interest due each month plus a little of the loan you owe. With this type of mortgage, you have the benefit of seeing your mortgage amount get smaller over time. Plus, when the mortgage comes to an end, you’ll have paid off everything you owe in full and have nothing left to pay (which wouldn’t be the case if you’d opted for an interest only mortgage).
Of course, you should remember that in the first few years of paying a repayment mortgage, you’ll be mainly paying off interest. So if you want to repay the mortgage early or move house, you’ll find the amount you owe won’t have gone down by very much. You can expect to receive an annual statement with the mortgage balance.
Interest only mortgages
With an interest only mortgage, your monthly payments only pay the interest on the amount you’ve borrowed; you won’t actually be reducing the loan balance. An interest only mortgage is higher risk than a repayment mortgage and you will need an acceptable plan in place to repay the loan balance in full at the end of the term, otherwise you could lose your home. For further details, please see Interest only mortgages.
Types of mortgages
When you apply for a mortgage, your adviser will help you choose from several different types of deals. Most lenders offer a range of options on their mortgages. The main interest rate options are:
Your interest rate will stay the same for a set period. Many lenders offer fixed rates for two, three or five years, sometimes longer. The benefit of a fixed-rate mortgage is that it helps you to budget more easily, because your interest rate will stay the same for the length of the deal. Early repayment charges will almost always apply if you switch away from the mortgage before the fixed rate period ends.
With this type of mortgage, the interest rate tracks a rate that is outside the control of the lender, such as the Bank of England bank rate (also known as the Base Rate). Every time that rate goes up or down, so does the interest rate on your mortgage. Naturally, you will be better off whenever the interest rates drop and your monthly payments will be less. But, you should make sure your budget will allow you to make higher monthly payments if interest rates were to go back up. Early repayment charges will sometimes apply if you switch away from the mortgage before the tracker deal period ends.
Standard Variable Rate (SVR) mortgages
Many mortgages will begin with an introductory offer rate of interest but once that term ends the lender will charge a rate of interest known as the lender’s Standard Variable Rate (SVR). This is an interest rate determined by your bank or building society and if you don’t change your mortgage you could easily pay this rate for 20+ years. Often, to remain competitive with other lenders, this rate will rise or fall at similar times to the Bank of England’s Base Rate – but the two are not necessarily linked. As well as looking at the introductory offer of a mortgage it is a good idea to look at the lender’s SVR as it is likely you will pay this at some point unless you choose to re-mortgage. Early repayment charges will not usually apply if you switch away from the mortgage.
Discounted Rate mortgages
A discounted rate mortgage is one in which the rate can vary, similar to a tracker mortgage. However, the difference is that instead of being linked to the Bank of England Base Rate, the amount you pay will be less than (i.e. discounted from) the lender’s Standard Variable Rate. Lenders can change their SVR whenever they want, regardless of the movements of the base rate. Rates on discount mortgages tend to be lower than with fixed or tracker mortgages, however in theory the lender could vary their rate at any time which needs to be taken into account when considering this option. Early repayment charges will sometimes apply if you switch away from the mortgage before the discounted period ends.
How much can I borrow?
The amount you can borrow will be based on your annual income and personal circumstances – and on the property you’re buying. Ultimately, the mortgage amount will come down to what the mortgage lender thinks is a sensible amount to lend to you and what you think you can afford.
To help your broker give you guidance and for a lender to make a decision about how much you can borrow, you will need to provide information about the following:
You will need to show pay slips and bank statements to confirm your income and to help make a decision on what size mortgage is sensible for you to take on.
Even though two people may have exactly the same income, their outgoings can be very different. So, as well as taking your income into consideration, it’s also important to tell your broker and lender about your other financial commitments, and to discuss what effect possible changes in your personal circumstances and future interest rate rises could have on your finances. This is to help guard against your mortgage becoming unmanageable. Again, you may be asked to show bank statements and other items showing your outgoings since a mortgage will not be agreed if there is any indication that you cannot afford the payments.
When considering how much to borrow or how you would like to repay your mortgage, please remember that changes to your personal circumstances can alter your financial circumstances as well.
The value of the property
When you apply for a mortgage the amount of money you want to borrow is compared with the value of the property, and often referred to as the ‘loan to value ratio’. It is used as a percentage. For example, if you want to borrow £270,000 and the property is worth £300,000, the loan to value is 90% (£270,000 divided by £300,000). This means that you will need to raise a 10% deposit (£30,000) in order to buy the property.
The loan to value (LTV) is one of the key factors a lender will consider before agreeing a mortgage. The lower the percentage, the more favourable your interest rate might be. To achieve a better rate, you’ll need to reduce the amount you want to borrow by increasing the amount of money you put into buying your home (i.e. your deposit).
The lender will usually complete a basic valuation to determine the value of the property. You will generally have to pay a fee for the valuation however your broker may be able to select products with a free valuation or cash-back incentives.
If you’re considering a new-build home you may have to come up with a bigger deposit as lenders have different lending limits.
Type of property
It’s important to check whether your property is Freehold or Leasehold.
• Leasehold means you have the right to use the property for a set period of time (the length of the lease), often in return for paying ground rent to the freeholder. It's common for flats to be leasehold.
• Freehold means that you’re buying the property and the land on which it is built. There will be no ground rent to pay.
Our website is divided into easy to navigate sections to help you get to the information you require.
In this section you’ll find more information about mortgages for differing needs, please speak with an adviser to discuss yours.
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Did you know?
The term mortgage comes from the French words mort, "dead," and gage, "pledge". But despite the ominous-sounding name, mortgages are the lifeblood of property ownership in this country.
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