Mortgage frequently asked questions (FAQs)

Frequently asked questions (FAQs) about mortgages. If you have further questions please don't hesitate to ask your friendly Reeds Rains mortgage adviser - ring us today free on 0800 470 1182 ^ and we'll explain - in plain English - how the appropriate mortgages work and what they mean in your circumstances.


Our initial mortgage consultation is free. We will charge a fee between £349 and £699 on application. The amount we will charge is dependent on the amount of research and administration required.

What is a mortgage?

A mortgage is the loan that you take out which is secured against your property that enables you to purchase your home.

The mortgage lender has the option of taking possession of the property and selling it on if the mortgage repayments aren’t made to try and recoup any losses it has suffered.

The lender will charge you 'interest' in return for lending you the money. Therefore over the term of the mortgage you will need to pay the lender interest, and repay the amount you originally borrowed fully before the mortgage ends.

How much can I borrow?

Every lender will be different in their approach to what you can borrow and unfortunately there is no set calculation. The actual amount you’re eligible to borrow will be determined by the cost of the property you wish to purchase, the size of deposit you have, how much money you make and affordability (taking into account your monthly financial commitments and any future commitments). Refer to our Mortgage Calculator for a guide but the best thing to do is make an appointment to see one of our specialists who will be able to guide you further and give you some figures that match your circumstances. 

What is a remortgage?

This is simply swapping the mortgage you have on your current property for another mortgage with a different lender. You may consider this option if your existing mortgage deal has expired and you wanted to see if a more competitive deal was available. You could also consider this if your circumstances have changed and you want to borrow more. There are many reasons why you would remortgage but this does not involve moving home. 

What is conveyancing?

Conveyancing refers to the legal work completed by the solicitor or conveyancer you choose when buying or selling a property. It’s important to have either a conveyancer or a solicitor already lined up because as a buyer or a seller, you will need this in place to start and complete your transaction. Reeds Rains can help with your selection should you require some assistance. 

How do I prove what income I have?

If you are employed, you will need to provide at least your last 3 months payslips as a guide and sometimes your P60.

If you are self employed, the easiest way to prove your income is via SA302s which can be obtained from HMRC. Alternatively at least 2 years' trading accounts may also be acceptable to lenders. Some lenders may have other requirements.

You will also be required to provide your bank statements for the last 3 months. 

If you have any other form of income, eg tax credits, then written evidence from the provider will be required. 

How long do I take my mortgage out for?

The answer to this is simply down to what you can afford. We would always advise speaking to a Reeds Rains Mortgage Adviser to ascertain what term is suitable to your circumstances. 

How do I choose the most suitable mortgage for me?

One of the most difficult aspects of organising a mortgage is sorting through the hundreds of mortgage deals currently available. Different mortgage schemes will often cater for different needs. To establish what is suitable for you it is important to take into account your current circumstances as well as your priorities and long term plans. We recommend speaking to one of our Mortgage Advisers as soon as possible as they will be able to guide you.

What fees might I incur when taking out a mortgage?

Typically the list of fees could include:

Valuation fee – charged by the lender to value the property and generally paid up front with your application

Solicitors fees – charged by the solicitor to complete the conveyancing transactions on the property. Part of this is paid up front when the solicitors are instruction but the remainder is paid upon completion.

Stamp duty land tax – a tax levied by the government on any property purchase above £125,000.

Lender arrangement fees – charged by the lender for arranging the loan. This can be added to the loan in most circumstances but will therefore increase the size of the loan.

Booking fee – charged by the lender for booking the funds for your mortgage and typically charged up front with your application

Broker fees – may be charged if you are using a broker and payable either up front or on completion

Do I have to repay my Mortgage by a certain age?

The answer to this is simply down to what you can afford, although in some cases it might be a lender's condition for the loan. We would advise speaking to a Reeds Rains Mortgage Adviser to ascertain what term is suitable to your circumstances.

What is the difference between a Standard Variable Rate and a Tracker Rate?

Both of these rates are variable which means that they may change as the Bank of England changes the base rate. A standard variable rate is the lenders normal mortgage rate, ie does not include any discounts or deals. It tends to follow the Bank of England rate, but not exactly. A tracker mortgage is linked to a particular base rate, which it moves up and down with ('tracks'). Two of the most common rates that may be tracked are the Bank of England Base Rate, and LIBOR (London Interbank Offered Rate).

What is a Higher Lending Charge?

The higher lending charge, formerly known as a mortgage indemnity guarantee (MIG), is a fee charged by a mortgage lender where the amount borrowed exceeds a given percentage of the value of the property. This fee may be used by the lender to purchase an insurance policy designed to protect it (the mortgagee) against loss in the event of you defaulting and ceasing to repay your mortgage. 

What is an Early Repayment Charge?

When you take out a mortgage with an initial deal on an e.g. fixed, tracker or discounted rate basis, should you repay the mortgage in full or part before the deal ends, you usually will have to pay an Early Repayment Charge which, in most cases, is charged as a percentage of the loan.  Some mortgages will offer a ‘portability’ option which means that if you move house when you are still tied into your deal, you can ‘port’ the mortgage to the new property and avoid the Early Repayment Charge. 

What if I want to rent out my property?

In the first instance you should seek permission from your Mortgage Lender. Your lender may increase the interest rate to reflect the change in risk. Reeds Rains can provide you with advice on your mortgage and insurance options. Remember that you may also need to change the type of building insurance you hold on the property to ensure it is appropriate for this purpose.

What if I lose my job or I am having difficulty paying my mortgage?

The first and most important thing to do is contact your lender as soon as possible. Lenders are required to treat borrowers in this position "sympathetically and positively".

Some lenders also have telephone helplines and debt counselling facilities which may be able to help you.

Do I need insurances with my Mortgage?

We would always recommend that when you take out a large debt, you should consider protecting it against the unthinkable like death and serious illness, even long term illness. There is Buildings and Contents insurance to consider as well and Building Insurance will be a policy that your Mortgage Lender insists is in place as you move into your new home. Your Reeds Rains Mortgage and Protection adviser will be able to talk you through insurance options and guide you in the right direction. 

If I do an Agreement in Principle (AIP) with this lender what will I do if a better product comes up before my application?

An AIP will tell you whether your credit scoring is good enough to be accepted or whether there are issues which you can address sooner or later arising from that. It does not oblige you to go to a particular lender any more than it obliges them to provide you with a mortgage offer but it does enable you to get an early indication of what value properties you can be looking at.

Is there a particular mortgage term I will be stuck with or do I have a choice about that?

The most important thing is affordability. If you have a stated budget we will recommend going up to that to keep the term short enough that you do not have to pay more interest than you should. If your payments would take you over your budget we will recommend a longer term as over time you will have various other options as the amount owed goes down, you owe less, earn more, or the LTV adjusts over time as well over paying options available on most mortgages. The important thing is to know that your obligations over a fixed period will remain and it may cost you to come out of such an arrangement, but you can revise your arrangements when you re-mortgage so the important thing is to keep your affordability manageable.

How much can I raise as a mortgage?

This would be based on income and expenditure which would need to be assessed with you based on payslips and bank statements.

When are fees payable and are they refundable?

Some fees will be payable on application and some when you complete on the property, and some will be refundable. At your appointment your adviser will go over all fees that could be payable and explain when they would be due and if they are refundable or not. Your adviser will always provide you with an illustration for any mortgage they talk to you about and this will show you the breakdown of any fees and when they are due.


How much deposit do I need?

Depending on circumstances we can look at mortgages from 0% deposit

My bank is only lending so much, but we need more than they are offering. Can we still buy the house we like?

We have exclusive deals from lenders that will offer more money than others; we need to sit down and discuss affordability to see which lenders criteria you meet and how much you can borrow.

Do I have to take out protection?

It’s not a legal requirement, however, we strongly advise this is something we look at with you because this will protect your asset for the mortgage term and will give you the peace of mind that your family would be left with a debt free estate.

I have had problems with credit in the past, can I get a mortgage?

We have a comprehensive range of products from across the market; this includes products to help people that may have had issues with credit in the past. 

Can you help with the Help to Buy Scheme?

We can help with all the Help to Buy scheme mortgages.

Can I buy at auction with a mortgage?

Consideration prior to purchasing at Auction:

  1. Ensure mortgage approved in principle prior to bidding.
  2. Seek advice from a mortgage broker who access to lenders service standards for quick mortgage offers.
  3. Be aware that you will need to provide deposit at auction, not at mortgage completion.
  4. Obtain a copy of the property legal pack at earliest opportunity, prior to bidding.
Do I have to have a survey?

You have to have a valuation if you are buying with a mortgage but do not need to have a survey. However, in most situations it is advisable. Your adviser can talk you through when you would and wouldn’t be recommended to have a survey

What’s a repayment mortgage? 

A repayment mortgage is where you pay the interest as well as the capital borrowed, so your mortgage balance is reduced every time you make a payment. In the early years you will pay mostly the interest and a little towards your capital but in the later years you pay more towards the capital.


Talk to us about mortgages

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