Mortgage Lenders

Mortgages – a beginner’s guide. Buying a home is the largest purchase you’re likely to make. Before you arrange your mortgage, make sure you know what you can afford to borrow. Find out where to get a mortgage, the different types and how the process works.

What is a mortgage? A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer.

The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.

Working out what you can afford

Don’t stretch yourself if you think you’ll struggle to keep up repayments. Also, think about the running costs of owning a home such as household bills, council tax, insurance and maintenance.

Lenders will want to see proof of your income and certain expenditure, and if you have any debts. They may ask for information about household bills, child maintenance and personal expenses.

Lenders want proof that you will be able to keep up repayments if interest rates rise. They may refuse to offer you a mortgage if they don’t think you’ll be able to afford it.

To find out how much you could borrow use our Affordability calculator.

How much can you afford to borrow?

Where to get a mortgage

You can apply for a mortgage directly from a bank or building society, choosing from their product range.

You can also use a mortgage broker or independent financial adviser (IFA) who can compare different mortgages on the market, as well as mortgages which are not offered directly to customers.

Some brokers look at mortgages from the ‘whole market’ while others look at products from a number of lenders. They’ll tell you all about this, and whether they have any charges, when you first contact them.

Taking advice will almost certainly be best unless you are very experienced in financial matters in general, and mortgages in particular.

It is sometimes possible to choose a mortgage without receiving advice – this is called an execution-only mortgage. These are offered under limited circumstances.

You’d be expected to know exactly what property you want to buy, how much you want to borrow and for how long, what type of mortgage you want and the type of interest and rate that you want to borrow at.

The lender will write to confirm that you haven’t received any advice, and that the mortgage hasn’t been assessed to see if it’s suitable for you.

In some cases you may need to confirm that you are aware of the consequences of taking out a mortgage without receiving advice, and that you are happy to go ahead.

If for some reason the mortgage turns out to be unsuitable for you later on, it will be very difficult for you to make a complaint.

If you go down the execution-only route, the lender will still carry out detailed affordability checks of your finances and assess your ability to continue to make repayments in certain circumstances.