Mortgages

A mortgage is quite simply, a loan that is secured against a property. The lender has a “legal charge” which is registered against the property and this gives them additional rights should you (the borrower) default on the loan. For example if you are unable to make your monthly payments on the mortgage then the lender has the right to apply to the court to repossess the property (if all else has failed) and sell it to recover the amount that you owe against the mortgage.

We hope that it never comes down to this and as well as giving you advice on your mortgage, we will be able to explain to you how to protect yourself against any unforeseen circumstances.

Life cover is designed to repay the mortgage in the event of the death of a borrower and Critical Illness cover is designed to repay the mortgage on the diagnosis of one of a specified number of illnesses. The benefits speak for themselves. How would you be able to pay your mortgage payments if you had to give up your job due to ill health and you did not have any cover? What would happen to your partner if the main bread earner died? Could they keep up the mortgage payments if you did not have any life cover?

It is also worth considering Mortgage Payment Protection Cover which is designed to help you make your monthly mortgage payments if you were unable to work through illness or being made redundant.

We will be able to provide you with a full breakdown in costs and give advice to help you decide which types of cover will be beneficial to you.

Subject to status & the value of the property, the majority of lenders now use an affordability assessment which takes into consideration any committed expenditure (secured loans, unsecured loans, hire purchase, lease agreements, credit cards, student loans and any other debt repayments) as well as day to day living expenditure (council tax, gas, electric, water, TV, broadband, insurances, travel and shopping expenditure). Depending on the product term taken, the lender may use a ‘stressed’ rate to calculate your affordable monthly payment and this will equate to the maximum advance offered which is specific to the term of mortgage that you select. For instance, taking a longer term will typically increase the amount of borrowing available.

Firstly the lender will look at your income but this can take into account many different factors:

• Gross annual basic salary
• Guaranteed overtime, bonuses & commission
• Regular overtime, bonuses & commission
• Allowances
• Net Profit
• Drawings
• Dividends
• Investment income
• Maintenance received
• State Benefits received
• Cash earnings
• Income from a second job

Finally, many lenders have a background ‘Loan to Income’ calculation of 4-5 times your income although some lenders will even offer up to 6 X income subject to status.

We will be able to seek out the lender that will be able to offer you the most suitable loan for your specific circumstances. Click here for one of our advisors to contact you to discuss your specific circumstances.

Mortgages are a mystery to the majority of people and many do not have the most suitable product for their circumstances. Many are under the misconception that they will not be able to get a mortgage for one reason or another.

Whether you do not feel that you are earning enough, have no deposit monies available, have adverse credit registered against you, are self employed, a director, or on a fixed employment contract, Mosaic Mortgages will be able to find a mortgage to suit your individual circumstances.

Find out all you need to know about getting a mortgage by selecting one of the links on the navigation panel on the left hand side of the home page. The First Time Buyer guide contains a lot of useful information for home owners moving house as well.

This is a fee charged by the lender should the borrower want to remortgage elsewhere or pay off the mortgage in full before the end of a special rate period (pre-determined at the outset). This is designed to ensure that the borrower stays with the lender for the specified period of time.

There is generally a balance between the rate that is offered to the borrower and the length of time that the borrower will be tied in to that lender with a penalty. If the rate is exceptionally low, the lender will tie the borrower in for longer than the offered rate.

How the lender calculates the penalty does vary from a number of months interest penalty (usually calculated at the lender’s variable rate) to a percentage of the amount of mortgage redeemed.

There is a misconception usually amongst the self employed or Company Directors that they will not be able to get a mortgage. This is not true.

However, a lender will always take into account the stability of an applicant’s employment when making a decision whether to lend.

Typically, for the self employed, there is a minimum trading requirement with mainstream lenders of 2-3 years but there are those lenders who will lend to you after the first trading year or some will even lend when you have only been trading for just 6 months.

For those in employment, the applicant must have been in their current job for at least 6 months or have been in continuous employment for 6 months but there still lenders who will go outside these guidelines and Mosaic Mortgages will be able to source from the entire mortgage market to find a lender who is sympathetic to your individual circumstances.

If you are concerned that your employment status will cause you a problem obtaining a mortgage then click here for one of our specialists to contact you to discuss your individual circumstances.