Frequently Asked Questions

An Agreement in Principle (AIP), also known as a Decision in Principle (DIP) or Mortgage in Principle, is a document or confirmation from a lender that they are willing to lend you a certain amount of money based on your financial situation, before you formally apply for a mortgage. It’s an informal offer, and while it’s not a guarantee, it provides you with an idea of how much you can borrow and helps show sellers and estate agents that you are a serious buyer. It’s an important step in the home-buying process, as it gives you an indication of your mortgage eligibility before you start house hunting.

A mortgage broker is a professional who acts as an intermediary between you (the borrower) and potential mortgage lenders. Instead of going directly to banks or other financial institutions, a mortgage broker helps you find the best mortgage deal for your specific needs by comparing products from a range of lenders.

A mortgage is a loan used to buy property or land, where the property itself serves as collateral for the loan. The borrower agrees to repay the loan amount (called the principal) plus interest over a set period of time. If the borrower fails to make the required payments, the lender has the right to repossess the property.

Your mortgage deal typically reverts to the lender's Standard Variable Rate (SVR) which is at a higher rate unless you take action to switch to a new deal.

A remortgage is the process of switching your existing mortgage to a new deal, either with the same lender or a different one. It usually involves either changing the interest rate, extending or shortening the term, or borrowing additional money against your property. People typically remortgage to get a better deal, save money on interest, release equity from their property, or switch from one type of mortgage product to another.

Conveyancing is the legal process involved in transferring property ownership from one party to another. A conveyancer is also called a solicitor. It encompasses various essential tasks to ensure that the transaction is carried out legally and correctly. Whether you're buying or selling a property, conveyancing is crucial to meet all legal requirements and ensure the transfer of ownership is properly executed.

In short, Freehold: You own both the property and the land it sits on indefinitely. You have full control and responsibility for the property. Leasehold: You own the property for a set number of years (e.g., 99, 125 years), but the land is owned by a freeholder. You may pay ground rent or service charge (a cost to cover communal areas upkeep), and need the freeholder's permission for certain changes.

Stamp Duty (formally known as Stamp Duty Land Tax, or SDLT) is a tax paid when you purchase a property or land in the UK. It is calculated as a percentage of the purchase price or market value of the property, whichever is higher, and it applies to both freehold and leasehold property purchases. The amount of Stamp Duty you pay depends on several factors, such as: The price of the property. Whether you’re a first-time buyer. The type of property (residential or non-residential). The region (as different rates may apply in Scotland and Wales).

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 tax calculations and overviews, typically a two year period but there are some exceptions to this, these documents can be obtained from HMRC or your accountant. 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, e.g. benefit income, then written evidence from the provider maybe required.

Yes, it is possible to get a mortgage in the UK with credit issues, but it can be more difficult and may come with higher costs and stricter conditions. Lenders typically assess your credit history to gauge the level of risk they’re taking on, and a poor credit score can make them hesitant to approve your application. However, there are still options available, especially with specialist lenders.

An Early Repayment Charge (ERC) is a fee that lenders charge when you pay off all or part of your mortgage earlier than the agreed-upon term. This is typically applicable during a fixed-rate or certain types of variable-rate mortgage products. The rationale behind an ERC is that when you repay your mortgage early, the lender loses out on the interest payments they would have received over the remaining term of the loan. The ERC compensates the lender for this loss.

When taking out a mortgage, the lender will typically require a valuation of the property to assess its market value. This ensures that the property is worth the amount you are borrowing. The valuation is usually carried out by an independent surveyor on behalf of the lender. A lot of lenders now cover the cost of this, dependent on the property you are purchasing it is advisable to have a more in depth survey, this would be at a cost to you.

An EPC (Energy Performance Certificate) is a document that provides information about the energy efficiency of a property in the UK. It shows how energy-efficient the property is, which can affect the running costs (e.g., heating and electricity). An EPC is required when you sell or let a property. Some mortgage lenders offer better interest rates with EPC ratings of A-B.

Although not the most popular route it is possible, it is best to ensure that the mortgage is approved prior to bidding, you would need to pay your deposit at the auction, rather than at mortgage completion. Also ensure you obtain a copy of the property legal pack at your earliest opportunity, prior to making your bid.